UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): July 29, 2015

VTV THERAPEUTICS INC.
(Exact name of registrant as specified in its charter)

 

Delaware

(State or other jurisdiction

of incorporation)

001-37524

(Commission File No.)

47-3916571
(IRS Employer
Identification No.)

 

4170 Mendenhall Oaks Pkwy

High Point, NC 27265

(Address of principal executive offices)

 

(336) 841-0300

(Registrant’s telephone number, including area code)

 

NOT APPLICABLE

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 

 

Item 1.01 Entry into a Material Definitive Agreement

 

Underwriting Agreement

 

On July 29, 2015, vTv Therapeutics Inc. (the “ Company ”) entered into an underwriting agreement (the “ Underwriting Agreement ”) with Piper Jaffray & Co. and Stifel, Nicolaus & Company, Incorporated, as representatives for the underwriters set forth on Schedule I thereto (collectively, the “ Underwriters ”), relating to the Company’s initial public offering (the “ Offering ”) of its Class A common stock, par value $0.01 per share (the “ Class A Common Stock ”). Under the Underwriting Agreement, the Company agreed to sell 7,812,500 shares of Class A Common Stock to the Underwriters at a purchase price per share of $13.95 (the offering price to the public of $15.00 per share minus the underwriters’ discount). The Company also provided the Underwriters with an option to purchase up to an additional 1,171,875 shares of Class A Common Stock to cover over allotments.

 

The Underwriting Agreement includes customary representations, warranties and covenants by the Company. It also provides that the Company will indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “ Securities Act ”), or contribute to payments the Underwriters may be required to make because of any of those liabilities.

 

Certain of the Underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various investment banking services for the Company for which they received or will receive customary fees and expenses.

 

The foregoing summary is qualified in its entirety by reference to the form of the Underwriting Agreement, which is filed as Exhibit 1.1 to the Company’s Registration Statement on Form S-1 (File No. 333-204951) (as amended, the “ Registration Statement ”), and is incorporated herein by reference.

 

Reorganization Transactions

 

In connection with the Offering, the Company completed a series of transactions on July 29, 2015 (the “ Reorganization Transactions ”) pursuant to a Reorganization Agreement, dated as of July 29, 2015 (the “ Reorganization Agreement ”), among the Company, vTv Therapeutics LLC (“ vTv Therapeutics LLC ”), vTvx I Holdings I LLC (“ vTvx I ”), vTvx Holdings II LLC (“ vTvx II ”) and vTv Therapeutics Holdings LLC (“ Holdings ”). The Reorganization Agreement governs the terms of the Reorganization Transactions, which are described in the Registration Statement.

 

In connection with the Reorganization Transactions, as previously reported in the Registration Statement, the Company amended and restated its Certificate of Incorporation and amended and restated its By-Laws. The amended and restated Certificate of Incorporation was filed with the Delaware Secretary of State on July 29, 2015.

 

In the Reorganization Transactions:

 

· vTvx I and vTvx II contributed substantially all of their assets, including all of their personnel and operations (the “ Contributed Assets ”) to Holdings, in return for interests of Holdings. Assets that were not contributed included restricted cash, certain receivables unrelated to the Company’s operations and land included in property and equipment, net, and liabilities that were not assumed included debt, a contingent distribution payable and other related party liabilities. All assets and liabilities that were not contributed or assumed remained with vTvx I and vTvx II;

 

· Holdings contributed the Contributed Assets to vTv Therapeutics LLC, and, for administrative convenience, Holdings directed that the assets be transferred directly to vTv Therapeutics LLC on behalf of Holdings;

 

· the Company amended and restated its Certificate of Incorporation and By-laws to provide for two classes of common stock:

 

o Class A Common Stock, which represent economic interests and have one vote per share, and

 

o Class B common stock, par value $0.01 per share (“ Class B Common Stock ”), which represent no economic interests and have one vote per share;

 

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· vTv Therapeutics LLC amended and restated its limited liability company agreement (the “ Amended and Restated LLC Agreement ”) to provide for two classes of membership units:

 

o a managing member unit, which represents no economic interests and represents 100% of the voting power of vTv Therapeutics LLC, and

 

o non-voting membership units (“ vTv Therapeutics LLC Units ”), which represent economic interests.

 

· vTv Therapeutics LLC issued the managing member unit to the Company;

 

· vTv Therapeutics LLC issued 25,000,000 vTv Therapeutics LLC Units to Holdings; and

 

· the Company issued 25,000,000 shares of Class B Common Stock, which represents no economic interests in the Company but has the right to cast one vote per share, to Holdings, which correspond to each vTv Therapeutics LLC Unit held by Holdings.

 

After the Reorganization Transactions, the Company completed the Offering, in which 7,812,500 shares of Class A Common Stock were issued (assuming no exercise of the underwriters’ over-allotment option). Of those 7,812,500 shares of Class A Common Stock, 1,666,666 shares were issued to an affiliate of MacAndrews & Forbes Incorporated (“MacAndrews”), which agreed to purchase such shares at the time the Underwriting Agreement was signed. Holdings, vTvx I and vTvx II are also affiliates of MacAndrews.

 

Immediately following the consummation of the Reorganization Transactions and the Offering (assuming no exercise of the underwriters’ over-allotment option):

 

· the only members of vTv Therapeutics LLC are the Company and Holdings;

 

· the Company used the net proceeds from the Offering to purchase 7,812,500 vTv Therapeutics LLC Units, which represent a total of 23.8% of the economic interests in vTv Therapeutics LLC;

 

· Holdings holds 25,000,000 shares of Class B Common Stock (and the same number of corresponding vTv Therapeutics LLC Units, which represent a total of 76.2% of the economic interests in vTv Therapeutics LLC);

 

· as a result of their purchase of shares of Class A Common Stock in the Offering, an affiliate of MacAndrews holds 1,666,666 shares of Class A Common Stock; and

 

· affiliates of MacAndrews beneficially own an aggregate of 81.3% of the total voting power of the Company’s outstanding common stock.

 

The only asset of the Company is its direct interest in vTv Therapeutics LLC. Each share of Class A Common Stock corresponds to a vTv Therapeutics LLC Unit that represents an economic interest held by the Company in vTv Therapeutics LLC, whereas the shares of Class B Common Stock have voting rights only in the Company and represent no economic interests of any kind. Shares of Class B Common Stock are initially owned solely by Holdings and cannot be transferred except in connection with an exchange or transfer of a corresponding vTv Therapeutics LLC Unit.

 

Exchange Agreement

 

On July 29, 2015, the Company entered into an Exchange Agreement with Holdings under which, subject to the terms of the Exchange Agreement and the Amended and Restated LLC Agreement of vTv Therapeutics LLC, vTv Therapeutics LLC Units (along with a corresponding number of shares of the Class B Common Stock) are exchangeable for (i) shares of Class A Common Stock on a one-for-one basis or (ii) cash (based on the market price of the shares of Class A Common Stock), at the Company’s option (as the managing member of vTv Therapeutics LLC), subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. Any decision to require an exchange for cash rather than shares of Class A Common Stock will ultimately be determined by the entire board of directors of the Company (the “ Board of Directors ”).

 

Tax Receivable Agreement

 

On July 29, 2015, the Company entered into a Tax Receivable Agreement with Holdings and M&F TTP Holdings LLC (the “ Tax Receivable Agreement ”) that provides for the payment by the Company to Holdings (or certain of its transferees or other assignees) of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that the Company actually realizes (or, in some circumstances, the Company is deemed to realize) as a result of (a) the exchange of Class B Common Stock, together with the corresponding number of vTv Therapeutics LLC Units, for shares of Class A Common Stock (or for cash), (b) tax benefits related to imputed interest deemed to be paid by the Company as a result of the Tax Receivable Agreement and (c) certain tax benefits attributable to payments under the Tax Receivable Agreement.

 

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Investor Rights Agreement

 

On July 29, 2015, the Company entered into an investor rights agreement with Holdings (the “ Investor Rights Agreement ”). The Investor Rights Agreement provides Holdings with certain demand, shelf and piggyback registration rights with respect to its shares of Class A Common Stock and also provides Holdings with certain governance rights, depending on the size of its holdings of Class A Common Stock.

 

Under the registration rights provisions of the Investor Rights Agreement:

 

· Holdings and its affiliates have the right to cause the Company to conduct an unlimited number of demand registrations, subject to certain customary restrictions, which demand registrations may take the form of a shelf registration;

 

· once the Company is eligible to do so, Holdings and its affiliates have the right to cause the Company to file and have declared effective a shelf registration statement on Form S-3 with respect to all of their shares of Class A Common Stock; and

 

· Holdings and its affiliates have the right to participate in certain registered offerings by the Company.

 

The registration rights provisions also contain customary provisions relating to cooperation with the registration process, black-out periods and customary securities law indemnity provisions in favor of the selling stockholders. With certain customary exceptions, the Company will be required to bear all registration expenses, other than underwriting discounts and commissions and transfer taxes, associated with any registration of shares pursuant to the Investor Rights Agreement. Registration rights may be transferred by Holdings and its affiliates, subject to certain restrictions. No predetermined penalties or liquidated damages will be payable by the Company if the Company fails to comply with the registration rights provisions of the Investor Rights Agreement.

 

The Company’s Board of Directors has six members. The Investor Rights Agreement also provides that Holdings, subject to applicable corporate governance rules of the SEC and the stock exchange on which the Company is listed (which may require Holdings to designate independent directors), has the right to designate: (i) a majority of the directors (and if the number of directors is even, one director more than 50% of the number of directors) if it beneficially owns more than 50% of the outstanding Company’s common stock, (ii) one less than a majority of the directors (and if the number of directors is even, 50% of the number of directors) if Holdings beneficially owns more than 25% but 50% or less and (iii) one-third of the directors (rounded down to the nearest whole number) if it beneficially owns more than 10% but 25% or less. Holdings loses the right to designate directors at 10% or less. So long as Holdings beneficially owns 25% or more of the outstanding Company’s common stock, it will have the right, subject to applicable corporate governance rules of the SEC and the exchange on which the Company is listed, to designate the members of the committees of the Board of Directors.

 

The Investor Rights Agreement will terminate when MacAndrews & Forbes Incorporated (“ MacAndrews ”) and its permitted transferees hold less than 2.5% of the Company’s outstanding common equity. To the extent that Holdings is dissolved or liquidated, MacAndrews and/or its affiliates will succeed to Holdings’ rights and obligations under the Investor Rights Agreement.

 

Indemnification Agreements

 

On July 29, 2015, the Company entered into indemnification agreements with each of its executive officers and directors. These agreements provided, in general, that the Company indemnifies the applicable executive officer and director to the fullest extent permitted by law in connection with their service to the Company or on the Company’s behalf. The summary of the indemnification agreements is qualified in its entirety by reference to the form of the indemnification agreement, which is filed as Exhibit 10.7 to the Registration Statement, and is incorporated herein by reference.

 

The foregoing summaries are qualified in their entirety by reference to the Reorganization Agreement, Amended and Restated LLC Agreement, Investor Rights Agreement, Exchange Agreement and Tax Receivable Agreement, which are filed herewith as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5, respectively, and are incorporated herein by reference.

 

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Item 3.02 Unregistered Sales of Equity Securities

 

On July 29, 2015, in connection with the Reorganization Transactions, the Company issued an aggregate of 25,000,000 shares of Class B Common Stock to Holdings in consideration for the Contributed Assets. The shares of Class B Common Stock were issued in reliance on the registration exemption contained in Section 4(a)(2) of the Securities Act, on the basis that the transaction did not involve a public offering. No underwriters were involved in the transaction.

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On July 29, 2015, in connection with the Reorganization Transactions, the Company adopted the vTv Therapeutics Inc. 2015 Omnibus Equity Incentive Plan (the “ Plan ”), including the form of option award agreement (“ Form of Option Award ”), as described in the Registration Statement.

 

The foregoing summary is qualified in its entirety by reference to the Plan and the Form of Option Award, which are filed herewith as Exhibits 10.6 and 10.7, respectively, and is incorporated herein by reference.

 

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

 

On July 29, 2015, in connection with the Reorganization Transactions, the Company amended and restated its certificate of incorporation and amended and restated its by-laws as described in Item 1.01 above.

 

The amended and restated certificate of incorporation is filed herewith as Exhibit 3.1 and incorporated by reference herein, and the amended and restated by-laws are filed herewith as Exhibit 3.2 and incorporated by reference herein.

 

Item 9.01 Financial Statements and Exhibits

 

(d)                  Exhibits

 

Exhibit No. Description
3.1 Amended and Restated Certificate of Incorporation.
3.2 Amended and Restated By-laws.
10.1 Reorganization Agreement, dated as of July 29, 2015, among vTv Therapeutics Inc., vTv Therapeutics LLC, vTvx Holdings I LLC, vTvx Holdings II LLC and vTv Therapeutics Holdings LLC.
10.2 Amended and Restated Limited Liability Company Agreement of vTv Therapeutics LLC, dated July 29, 2015.
10.3 Investor Rights Agreement, dated as of July 29, 2015, among vTv Therapeutics Inc., vTv Therapeutics Holdings LLC and other stockholders party thereto from time to time.
10.4 Exchange Agreement, dated as of July 29, 2015, among vTv Therapeutics LLC, vTv Therapeutics Inc. and vTv Therapeutics Holdings LLC.
10.5 Tax Receivable Agreement, dated as of July 29, 2015, among vTv Therapeutics Inc. and the other persons named therein.
10.6 vTv Therapeutics Inc. 2015 Omnibus Equity Incentive Plan.
10.7 vTv Therapeutics Inc. Form of Nonqualified Option Award Agreement.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

  VTV THERAPEUTICS INC.
     
  By: /s/ Rudy C. Howard
  Name: Rudy C. Howard
  Title: Chief Financial Officer and Secretary

 

Dated: August 4, 2015

 

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EXHIBIT INDEX

 

Exhibit No. Description
3.1 Amended and Restated Certificate of Incorporation.
3.2 Amended and Restated By-laws.
10.1 Reorganization Agreement, dated as of July 29, 2015, among vTv Therapeutics Inc., vTv Therapeutics LLC, vTvx Holdings I LLC, vTvx Holdings II LLC and vTv Therapeutics Holdings LLC.
10.2 Amended and Restated Limited Liability Company Agreement of vTv Therapeutics LLC, dated July 29, 2015.
10.3 Investor Rights Agreement, dated as of July 29, 2015, among vTv Therapeutics Inc., vTv Therapeutics Holdings LLC and other stockholders party thereto from time to time.
10.4 Exchange Agreement, dated as of July 29, 2015, among vTv Therapeutics LLC, vTv Therapeutics Inc. and vTv Therapeutics Holdings LLC.
10.5 Tax Receivable Agreement, dated as of July 29, 2015, among vTv Therapeutics Inc. and the other persons named therein.
10.6 vTv Therapeutics Inc. 2015 Omnibus Equity Incentive Plan.
10.7 vTv Therapeutics Inc. Form of Nonqualified Option Award Agreement.

 

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Exhibit 3.1

 

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

of

VTV THERAPEUTICS INC.

 

(Pursuant to Sections 242 and 245 of
the General Corporation Law of the State of Delaware)

 

vTv Therapeutics Inc., a corporation organized and existing under the laws of the State of Delaware (the “ Corporation ”), hereby certifies as follows:

 

FIRST: The name of the Corporation is vTv Therapeutics Inc. The date of filing of its original certificate of incorporation (the “ Original Certificate of Incorporation ”) with the Secretary of State of the State of Delaware was April 2, 2015.

 

SECOND: This Amended and Restated Certificate of Incorporation (this “ Amended Certificate of Incorporation ”) amends and restates in its entirety the Corporation’s certificate of incorporation as currently in effect and has been duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware (as from time to time in effect, the “ General Corporation Law ”), by written consent of the holders of all of the outstanding stock entitled to vote thereon in accordance with the provisions of Section 228 of the General Corporation Law.

 

THIRD: This Amended Certificate of Incorporation amends and restates in its entirety the Original Certificate of Incorporation of the Corporation to read as follows:

 

1.                   Name . The name of the Corporation is vTv Therapeutics Inc.

 

2.                   Address; Registered Office and Agent . The address of the Corporation’s registered office in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle, State of Delaware 19808; and the name of its registered agent at such address is Corporation Service Company.

 

3.                   Purposes . The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law.

 

4.                   Number of Shares .

 

4.1               The total number of shares of all classes of stock that the Corporation shall have authority to issue is 250,000,000 shares, consisting of: (i) 200,000,000 shares of common stock, divided into (a) 100,000,000 shares of Class A common stock, with the par value of $0.01 per share (the “ Class A Common Stock ”) and (b) 100,000,000 shares of Class B common stock, with the par value of $0.01 per share (the “ Class B Common Stock ” and, together with Class A Common Stock, the “ Common Stock ”); and (ii) 50,000,000 shares of preferred stock, with the par value of $0.01 per share (the “ Preferred Stock ”).

 

 
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4.2               Subject to the rights of the holders of any one or more series of Preferred Stock then outstanding, the number of authorized shares of any class of the Common Stock or the Preferred Stock may be increased or decreased, in each case by the affirmative vote of the holders of a majority of the total voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon, voting together as a single class, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law, and no vote of the holders of any class of the Common Stock or the Preferred Stock voting separately as a class will be required therefor. Notwithstanding the immediately preceding sentence, the number of authorized shares of any particular class may not be decreased below the number of shares of such class then outstanding, plus:

 

(i)                  in the case of Class A Common Stock, the number of shares of Class A Common Stock issuable in connection with (x) the exchange of all outstanding shares of Class B Common Stock and all shares of Class B Common Stock issuable as described in clause (ii) below, together with the corresponding Nonvoting Common Units constituting the remainder of any Paired Interests in which such shares are included, pursuant to Section 2.01 of the Exchange Agreement and (y) the exercise of outstanding options, warrants, exchange rights, conversion rights or similar rights for Class A Common Stock; and

 

(ii)                in the case of Class B Common Stock, the number of shares of Class B Common Stock issuable in connection with the exercise of outstanding options, warrants, exchange rights, conversion rights or similar rights for Class B Common Stock.

 

5.                   Classes of Shares . The designation, relative rights, preferences and limitations of the shares of each class of stock are as follows:

 

5.1               Common Stock .

 

(i)                  Voting Rights .

 

(1)                Each holder of Class A Common Stock will be entitled to one vote for each share of Class A Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote, and each holder of Class B Common Stock will be entitled to one vote for each share of Class B Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote.

 

(2)                The holders of the outstanding shares of Class A Common Stock and Class B Common Stock shall each be entitled to vote separately upon any amendment to this Amended Certificate of Incorporation (including by merger, consolidation, reorganization or similar event) that would alter or change the powers, preferences, or special rights of the shares of such class of Common Stock in a manner that affects them adversely.

 

 
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(3)                Except as otherwise required in this Amended Certificate of Incorporation or by applicable law, the holders of Common Stock will vote together as a single class on all matters (or, if any holders of Preferred Stock are entitled to vote together with the holders of Common Stock, as a single class with the holders of Preferred Stock).

 

(ii)                Dividends; Stock Splits or Combinations .

 

(1)                Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock or any class or series of stock having a preference senior to or the right to participate with the Class A Common Stock with respect to the payment of dividends, dividends of cash or property may be declared and paid on the Class A Common Stock out of the assets of the Corporation that are by law available therefor, at the times and in the amounts as the board of directors of the Corporation (the “ Board ”) in its discretion may determine.

 

(2)                Except as provided in Section 5.1(ii)(3) with respect to stock dividends, dividends of cash or property may not be declared or paid on the Class B Common Stock.

 

(3)                In no event will any stock dividend, stock split, reverse stock split, combination of stock, reclassification or recapitalization be declared or made on any class of Common Stock (each, a “ Stock Adjustment ”) unless (a) a corresponding Stock Adjustment for all other classes of Common Stock not so adjusted at the time outstanding is made in the same proportion and the same manner and (b) the Stock Adjustment has been reflected in the same economically equivalent manner on all Nonvoting Common Units. Stock dividends with respect to each class of Common Stock may only be paid with shares of stock of the same class of Common Stock.

 

(iii)              Liquidation . In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation and of the preferential and other amounts, if any, to which the holders of Preferred Stock are entitled, if any, the holders of all outstanding shares of Common Stock will be entitled to receive, pari passu , an amount per share equal to the par value thereof, and thereafter the holders of all outstanding shares of Class A Common Stock will be entitled to receive the remaining assets of the Corporation available for distribution ratably in proportion to the number of shares of Class A Common Stock. Without limiting the rights of the holders of Class B Common Stock to exchange their shares of Class B Common Stock, together with the corresponding Nonvoting Common Units constituting the remainder of any Paired Interests in which such shares are included, for shares of Class A Common Stock in accordance with Section 2.01 of the Exchange Agreement (or for the consideration payable in respect of shares of Class A Common Stock in such voluntary or involuntary liquidation, dissolution or winding up), the holders of shares of Class B Common Stock, as such, will not be entitled to receive, with respect to such shares, any assets of the Corporation in excess of the par value thereof, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation.

 

 
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5.2               Preferred Stock . Shares of Preferred Stock may be issued from time to time in one or more series of any number of shares, provided that the aggregate number of shares issued and not retired of any and all such series shall not exceed the total number of shares of Preferred Stock hereinabove authorized, and with such powers, including voting powers, if any, and the designations, preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, all as shall hereafter be stated and expressed in the resolution or resolutions providing for the designation and issue of such shares of Preferred Stock from time to time adopted by the Board pursuant to authority so to do which is hereby expressly vested in the Board. The powers, including voting powers, if any, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. Each series of shares of Preferred Stock: (i) may have such voting rights or powers, full or limited, if any; (ii) may be subject to redemption at such time or times and at such prices, if any; (iii) may be entitled to receive dividends (which may be cumulative or non-cumulative) at such rate or rates, on such conditions and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or series of stock, if any; (iv) may have such rights upon the voluntary or involuntary liquidation, winding up or dissolution of, upon any distribution of the assets of, or in the event of any merger, sale or consolidation of, the Corporation, if any; (v) may be made convertible into or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of stock of the Corporation (or any other securities of the Corporation or any other Person) at such price or prices or at such rates of exchange and with such adjustments, if any; (vi) may be entitled to the benefit of a sinking fund to be applied to the purchase or redemption of shares of such series in such amount or amounts, if any; (vii) may be entitled to the benefit of conditions and restrictions upon the creation of indebtedness of the Corporation or any subsidiary, upon the issue of any additional shares (including additional shares of such series or of any other series) and upon the payment of dividends or the making of other distributions on, and the purchase, redemption or other acquisition by the Corporation or any subsidiary of, any outstanding shares of the Corporation, if any; (viii) may be subject to restrictions on transfer or registration of transfer, or on the amount of shares that may be owned by any Person or group of Persons; and (ix) may have such other relative, participating, optional or other special rights, qualifications, limitations or restrictions thereof, if any; all as shall be stated in said resolution or resolutions of the Board providing for the designation and issue of such shares of Preferred Stock.

 

6.                   Exchange of Shares .

 

6.1               Exchange of Class B Common Stock . Shares of Class B Common Stock may be exchanged, together with the corresponding Nonvoting Common Units constituting the remainder of any Paired Interests in which such shares are included, as applicable, at any time and from time to time for shares of Class A Common Stock, in accordance with Section 2.01 of the Exchange Agreement.

 

 
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6.2               Taxes . The issuance of shares of Class A Common Stock upon the exercise by holders of shares of Class B Common Stock of their right under Section 2.01 of the Exchange Agreement to exchange Paired Interests will be made without charge to the holders of the shares of Class B Common Stock for any transfer taxes, stamp taxes or duties or other similar tax in respect of the issuance; provided , however , that if any such shares of Class A Common Stock are to be issued in a name other than that of the then record holder of the shares of Class B Common Stock being exchanged (or The Depository Trust Company or its nominee for the account of a participant of The Depository Trust Company that will hold the shares for the account of such holder), then such holder and/or the Person in whose name such shares are to be delivered, shall pay to the Corporation the amount of any tax that may be payable in respect of any transfer involved in the issuance or shall establish to the reasonable satisfaction of the Corporation that the tax has been paid or is not payable.

 

7.                   Meetings of Stockholders .

 

7.1               Action by Written Consent . From and after the Triggering Event, any action required or permitted to be taken by the stockholders of the Corporation may be effected only at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders. Prior to the Triggering Event, any action required or permitted to be taken by the stockholders of the Corporation may be effected by the consent in writing of the holders of a majority of the total voting power of the Corporation entitled to vote thereon, voting together as a single class in lieu of a duly called annual or special meeting of stockholders.

 

7.2               Election of Directors by Written Ballot . Unless and except to the extent that the Amended and Restated By-laws of the Corporation (as such By-laws may be amended from time to time, the “ By-laws ”) shall so require, the election of the directors of the Corporation (the “ Directors ”) need not be by written ballot.

 

8.                   Business Combinations .

 

8.1               Section 203 of the General Corporation Law . The Corporation will not be subject to the provisions of Section 203 of the General Corporation Law.

 

8.2               Limitations on Business Combinations . Notwithstanding Section 8.1, the Corporation shall not engage in any business combination (as defined below), at any point in time at which the Corporation’s Class A Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, with any interested stockholder (as defined below) for a period of three years following the time that such stockholder became an interested stockholder, unless:

 

(i)                  prior to such time, the Board approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder, or

 

(ii)                upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least eighty-five (85)% of the voting stock (as defined below) of the Corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned by (i) persons who are Directors and also officers or (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer, or

 

 
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(iii)              at or subsequent to such time, the business combination is approved by the Board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two thirds of the outstanding voting stock of the Corporation which is not owned by the interested stockholder.

 

8.3               Definitions . For purposes of this Article 8:

 

(i)                  affiliate ” means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another person.

 

(ii)                associate ,” when used to indicate a relationship with any person, means: (i) any corporation, partnership, unincorporated association or other entity of which such person is a director, officer or partner or is, directly or indirectly, the owner of 20% or more of any class of voting stock; (ii) any trust or other estate in which such person has at least a 20% beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity; and (iii) any relative or spouse of such person, or any relative of such spouse, who has the same residence as such person.

 

(iii)              business combination ,” when used in reference to the Corporation and any interested stockholder, means:

 

(1)                any merger or consolidation of the Corporation or any direct or indirect majority-owned subsidiary of the Corporation (a) with the interested stockholder, or (b) with any other corporation, partnership, unincorporated association or other entity if the merger or consolidation is caused by the interested stockholder and as a result of such merger or consolidation Section 8.2 is not applicable to the surviving entity;

 

(2)                any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately as a stockholder of the Corporation, to or with the interested stockholder, whether as part of a dissolution or otherwise, of assets of the Corporation or of any direct or indirect majority-owned subsidiary of the Corporation which assets have an aggregate market value equal to 10% or more of either the aggregate market value of all the assets of the Corporation determined on a consolidated basis or the aggregate market value of all the outstanding stock of the Corporation;

 

 
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(3)                any transaction which results in the issuance or transfer by the Corporation or by any direct or indirect majority-owned subsidiary of the Corporation of any stock of the Corporation or of such subsidiary to the interested stockholder, except: (a) pursuant to the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which securities were outstanding prior to the time that the interested stockholder became such; (b) pursuant to a merger under Section 251(g) of the General Corporation Law; (c) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which security is distributed, pro rata to all holders of a class or series of stock of the Corporation subsequent to the time the interested stockholder became such; (d) pursuant to an exchange offer by the Corporation to purchase stock made on the same terms to all holders of said stock; or (e) any issuance or transfer of stock by the Corporation; provided , however , that in no case under items (c)-(e) of this subsection (3) shall there be an increase in the interested stockholder’s proportionate share of the stock of any class or series of the Corporation or of the voting stock of the Corporation (except as a result of immaterial changes due to fractional share adjustments);

 

(4)                any transaction involving the Corporation or any direct or indirect majority-owned subsidiary of the Corporation which has the effect, directly or indirectly, of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the Corporation or of any such subsidiary which is owned by the interested stockholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of stock not caused, directly or indirectly, by the interested stockholder; or

 

(5)                any receipt by the interested stockholder of the benefit, directly or indirectly (except proportionately as a stockholder of the Corporation), of any loans, advances, guarantees, pledges, or other financial benefits (other than those expressly permitted in subsections (1)-(4) above) provided by or through the Corporation or any direct or indirect majority-owned subsidiary.

 

(iv)              control ,” including the terms “ controlling ,” “ controlled by ” and “ under common control with ,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting stock, by contract, or otherwise. A person who is the owner of 20% or more of the outstanding voting stock of the Corporation, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such person holds voting stock, in good faith and not for the purpose of circumventing this Article 8, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such entity.

 

 
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(v)                interested stockholder ” means any person (other than the Corporation or any direct or indirect majority-owned subsidiary of the Corporation) that (i) is the owner of 15% or more of the outstanding voting stock of the Corporation, or (ii) is an affiliate or associate of the Corporation and was the owner of 15% or more of the outstanding voting stock of the Corporation at any time within the three year period immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder, and the affiliates and associates of such person; provided , however , that the term “interested stockholder” shall not include (a) the Principal Stockholders or Principal Stockholder transferees, or any affiliates of any of the foregoing, or (b) any person whose ownership of shares in excess of the 15% limitation set forth herein is the result of any action taken solely by the Corporation; provided that such person specified in this clause (b) shall be an interested stockholder if thereafter such person acquires additional shares of voting stock of the Corporation, except as a result of further corporate action not caused, directly or indirectly, by such person. For the purpose of determining whether a person is an interested stockholder, the voting stock of the Corporation deemed to be outstanding shall include stock deemed to be owned by the person through application of the definition of “owner” below but shall not include any other unissued stock of the Corporation which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.

 

(vi)              owner ,” including the terms “ own ” and “ owned ,” when used with respect to any stock, means a person that individually or with or through any of its affiliates or associates:

 

(1)                beneficially owns such stock, directly or indirectly; or

 

(2)                has (a) the right to acquire such stock (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; provided , however , that a person shall not be deemed the owner of stock tendered pursuant to a tender or exchange offer made by such person or any of such person’s affiliates or associates until such tendered stock is accepted for purchase or exchange; or (b) the right to vote such stock pursuant to any agreement, arrangement or understanding; provided , however , that a person shall not be deemed the owner of any stock because of such person’s right to vote such stock if the agreement, arrangement or understanding to vote such stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to ten or more persons; or

 

(3)                has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent as described in item (b) of subsection (2) above), or disposing of such stock with any other person that beneficially owns, or whose affiliates or associates beneficially own, directly or indirectly, such stock.

 

(vii)            person ” means any individual, corporation, partnership, unincorporated association or other entity.

 

(viii)          stock ” means, with respect to any corporation, capital stock and, with respect to any other entity, any equity interest.

 

(ix)              Principal Stockholder transferee ” means any Person who acquires voting stock of the Corporation from a Principal Stockholder (other than in connection with a public offering) and who is designated in writing by such Principal Stockholder as a “Principal Stockholder transferee.”

 

(x)                voting stock ” means stock of any class or series entitled to vote generally in the election of directors.

 

 
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9.                   Corporate Opportunities .

 

9.1               Certain Acknowledgement . In recognition and anticipation that, subject to certain contractual commitments entered into with the Corporation and/or its subsidiaries, (i) certain directors, principals, officers, employees and/or other representatives of investment funds or vehicles affiliated with the Principal Stockholders and their respective Affiliates may serve as directors, officers or agents of the Corporation or any of its subsidiaries, (ii) the Principal Stockholders and their Affiliates may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Corporation, directly or indirectly, may engage, and (iii) certain members of the Board who are not officers or employees of the Corporation and/or any of its subsidiaries, but including consultants to the Principal Stockholders (“ Non-Employee Directors ”) and their respective Affiliates may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Corporation, directly or indirectly, may engage, the provisions of this Article 9 are set forth to regulate and define the conduct of certain affairs of the Corporation with respect to certain classes or categories of business opportunities as they may involve any of the Principal Stockholders, certain of the Non-Employee Directors or their respective Affiliates and the powers, rights, duties and liabilities of the Corporation and its Directors, officers and stockholders in connection therewith.

 

9.2               Scope . The Corporation waives, to the maximum extent permitted by law, the application of the doctrine of corporate opportunity, or any other analogous doctrine, with respect to the Corporation, to the Principal Stockholders, any Non-Employee Directors or any of their respective Affiliates; provided that, for the avoidance of doubt, the foregoing waiver shall not apply to Directors who are officers or employees of the Corporation but shall apply to Directors who are consultants to the Principal Stockholders (each Person entitled such waiver, an “ Exempted Person ”). To the maximum extent permitted by law, except to the extent otherwise provided in any agreement between an Exempted Person and the Corporation and/or any of its subsidiaries, no Exempted Person shall have any obligation to refrain from (i) engaging in the same or similar activities or lines of business as the Corporation or any of its Affiliates or developing or marketing any products or services that compete, directly or indirectly, with those of the Corporation or any of its Affiliates today or in which the Corporation or any of its Affiliates proposes to engage or develop, (ii) investing or owning any interest publicly or privately in, or developing a business relationship with, any Person engaged in the same or similar activities or lines of business as, or otherwise in competition with, the Corporation or any of its Affiliates or (iii) doing business with any client or customer of the Corporation or any of its Affiliates (each of the activities referred to in clauses (i)-(iii) above, a “ Specified Activity ”). The Corporation renounces any interest or expectancy in, or in being offered an opportunity to participate in, any Specified Activity that may be presented to or become known to any Exempted Person. Notwithstanding anything to the contrary in this Article 9, no Exempted Person shall be liable to the Corporation or its stockholders or to any Affiliate of the Corporation for breach of any fiduciary duty solely by reason of the fact that such Exempted Person engages in any of the Specified Activities. To the fullest extent permitted by law, the Corporation hereby renounces any interest or expectancy in, or right to be offered an opportunity to participate in, any business opportunity which may be a corporate opportunity for an Exempted Person and the Corporation or any of its Affiliates, except as provided in Section 9.3 hereof. Subject to Section 9.3, in the event that any Exempted Person acquires knowledge of a potential transaction or other business opportunity which may be a corporate opportunity for itself, herself or himself and the Corporation or any of its Affiliates, such Exempted Person shall, to the fullest extent permitted by law, have no duty to communicate or offer such transaction or other business opportunity to the Corporation or any of its Affiliates and, to the fullest extent permitted by law, shall not be liable to the Corporation or its stockholders or to any Affiliate of the Corporation for breach of any fiduciary duty as a stockholder, director or officer of the Corporation solely by reason of the fact that such Exempted Person pursues or acquires such corporate opportunity for itself, herself or himself, or offers or directs such corporate opportunity to another Person.

 

 
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9.3               Allocation of Corporate Opportunities . Notwithstanding anything in Section 9.2 to the contrary, the Corporation does not renounce its interest in any corporate opportunity offered to any Director who serves as an officer of the Corporation.

 

9.4               Certain Matters Deemed Not Corporate Opportunities . In addition to and notwithstanding the foregoing provisions of this Article 9, a corporate opportunity shall not be deemed to belong to the Corporation if it is a business opportunity that the Corporation is not financially able or contractually permitted or legally able to undertake, or that is, from its nature, not in the line of the Corporation’s business or is of no practical advantage to it or that is one in which the Corporation has no interest or reasonable expectancy.

 

9.5               Amendment of this Article . No amendment or repeal of this Article 9 in accordance with the provisions of Article 13 shall apply to or have any effect on the liability or alleged liability of any Exempted Person for or with respect to any activities or opportunities of which such Exempted Person becomes aware or otherwise relies on the protection afforded to such Exempted Person prior to such amendment or repeal. This Article 9 shall not limit any protections or defenses available to, or indemnification or advancement rights of, any Director or officer of the Corporation under this Amended Certificate of Incorporation, the By-laws or applicable law.

 

9.6               Notice of this Article . To the fullest extent permitted by law, any Person purchasing or otherwise acquiring any interest in any shares of capital stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article 9.

 

9.7               Certain Definitions . For purposes of this Article 9:

 

(i)                  Corporation ” means the Corporation, any of its subsidiaries (including vTv Therapeutics LLC and its subsidiaries) and/or any of its Affiliates; and

 

(ii)                Affiliate ” means (a) in respect of the Principal Stockholders, any Person that, directly or indirectly, is controlled by the Principal Stockholders, controls the Principal Stockholders or is under common control with the Principal Stockholders and shall include any principal, member, director, partner, stockholder, officer, employee or other representative of any of the foregoing (other than the Corporation and any entity that is controlled by the Corporation), (b) in respect of a Non-Employee Director, any Person that, directly or indirectly, is controlled by such Non-Employee Director (other than the Corporation and any entity that is controlled by the Corporation) and (c) in respect of the Corporation, any Person that, directly or indirectly, is controlled by the Corporation.

 

 
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10.               Limitation of Liability .

 

10.1           To the fullest extent permitted under the General Corporation Law, as amended from time to time, no Director shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director.

 

10.2           Any amendment or repeal of Section 10.1 shall not adversely affect any right or protection of a Director hereunder in respect of any act or omission occurring prior to the time of such amendment or repeal.

 

11.               Indemnification .

 

11.1           Right to Indemnification . The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any Person (a “ Covered Person ”) who was or is a party or is threatened to be made a party to or otherwise involved any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “ Proceeding ”), by reason of the fact that he or she, or a Person for whom he or she is the legal representative, is or was a Director or officer of the Corporation or, while a Director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, agent or trustee of another entity or enterprise, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including, without limitation, attorneys’ fees and expenses, judgments, fines, excise taxes or penalties under the Employee Retirement Income Security Act of 1974, as amended, and amounts paid or to be paid in settlement) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in Section 11.3, the Corporation shall be required to indemnify a Covered Person in connection with a Proceeding (or part thereof) commenced by such Covered Person only if the commencement of such Proceeding (or part thereof) by the Covered Person was authorized by the Board.

 

11.2           Prepayment of Expenses . To the extent not prohibited by applicable law, the Corporation shall pay the expenses (including attorneys’ fees) incurred by a Covered Person in defending any Proceeding in advance of its final disposition; provided , however , that to the extent required by applicable law, such payment of expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified under this Article 11 or otherwise.

 

 
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11.3           Claims . If a claim for indemnification or advancement of expenses under this Article 11 is not paid in full within thirty days after a written claim therefor by the Covered Person has been received by the Corporation, the Covered Person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In (i) any suit brought by a Covered Person to enforce a right to indemnification hereunder (but not in a suit brought by a Covered Person to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that, such Person has not met any applicable standard for indemnification set forth in the General Corporation Law. Neither the failure of the Corporation (including by its Directors who are not parties to such action, a committee of such Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the Covered Person is proper in the circumstances because the Covered Person has met the applicable standard of conduct set forth in the General Corporation Law, nor an actual determination by the Corporation (including by its Directors who are not parties to such action, a committee of such Directors, independent legal counsel, or its stockholders) that the Covered Person has not met such applicable standard of conduct, shall create a presumption that such Person has not met the applicable standard of conduct or, in the case of such a suit brought by the Covered Person, be a defense to such suit.

 

11.4           Nonexclusivity of Rights . The rights conferred on any Covered Person by this Article 11 shall not be exclusive of any other rights that such Covered Person may have or hereafter acquire under any statute, provision of this Amended Certificate of Incorporation, the By-laws, agreement, vote of stockholders or disinterested Directors or otherwise.

 

11.5           Other Sources . Subject to Section 11.6, the Corporation’s obligation, if any, to indemnify or to advance expenses to any Covered Person who was or is serving at its request as a director, officer, employee or agent of another entity or enterprise shall be reduced by any amount such Covered Person may collect as indemnification or advancement of expenses from such other entity or enterprise.

 

11.6           Indemnitor of First Resort . In all events, (i) the Corporation hereby agrees that it is the indemnitor of first resort (i.e. its obligation to a Covered Person to provide advancement and/or indemnification to such Covered Person are primary and any obligation of any Principal Stockholder (including any Affiliate thereof other than the Corporation) to provide advancement or indemnification hereunder or under any other indemnification agreement (whether pursuant to contract, by-laws or charter), or any obligation of any insurer of any Principal Stockholder to provide insurance coverage, for the same expenses, liabilities, judgments, penalties, fines and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such expenses, liabilities, judgments, penalties, fines and amounts paid in settlement) incurred by such Covered Person are secondary and (ii) if any Principal Stockholder (or any Affiliate thereof, other than the Corporation) pays or causes to be paid, for any reason, any amounts otherwise indemnifiable hereunder or under any other indemnification agreement (whether pursuant to contract, by-laws or charter) with such Covered Person, then (x) such Principal Stockholder (or such Affiliate, as the case may be), as the case may be, shall be fully subrogated to all rights of such Covered Person with respect to such payment and (y) the Corporation shall fully indemnify, reimburse and hold harmless such Principal Stockholder (or such other Affiliate), as the case may be, for all such payments actually made by such Principal Stockholder (or such other Affiliate).

 

 
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11.7           Amendment or Repeal . Any amendment or repeal of the foregoing provisions of this Article 11 shall not adversely affect any right or protection hereunder of any Covered Person in respect of any act or omission occurring prior to the time of such amendment or repeal.

 

11.8           Other Indemnification and Prepayment of Expenses . This Article 11 shall not limit the right of the Corporation, to the extent and in the manner permitted by applicable law, to indemnify and to advance expenses to Persons other than Covered Persons when and as authorized by appropriate corporate action.

 

11.9           Reliance . Covered Persons who after the date of the adoption of this provision become or remain a Covered Person described in Article 11 will be conclusively presumed to have relied on the rights to indemnity, advance of expenses and other rights contained in this Article 11 in entering into or continuing the service. The rights to indemnification and to the advance of expenses conferred in this Article 11 will apply to claims made against any Covered Person described in Article 11 arising out of acts or omissions in respect of the Corporation or one of its subsidiaries that occurred or occur both prior and subsequent to the adoption hereof. The rights conferred upon Covered Persons in this Article 11 shall be contract rights and such rights shall continue as to a Covered Person who has ceased to be a Director or officer and shall inure to the benefit of the Covered Person’s heirs, executors and administrators. Any amendment, alteration or repeal of this Article 11 that adversely affects any right of a Covered Person or its successors shall be prospective only and shall not limit, eliminate, or impair any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment or repeal.

 

11.10       Insurance . The Corporation may purchase and maintain insurance, at its expense, to protect itself and any Director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law.

 

12.               Adoption, Amendment or Repeal of By-Laws . In furtherance and not in limitation of the powers conferred by law, the Board is expressly authorized to make, alter, amend or repeal the By-laws subject to the power of the stockholders of the Corporation entitled to vote with respect thereto to make, alter, amend or repeal the By-laws.

 

13.               Adoption, Amendment and Repeal of Certificate . Subject to Article 5, the Corporation reserves the right to amend, alter, change or repeal any provision contained in this Amended Certificate of Incorporation, in the manner now or hereafter prescribed by the General Corporate Law, and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, Directors or any other Persons whomsoever by and pursuant to this Amended Certificate of Incorporation in its present form or as hereafter amended, are granted and held subject to this reservation.

 

 
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14.               Forum for Adjudication of Disputes . Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or the Certificate of Incorporation or these By-laws (as either may be amended from time to time, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be the Court of Chancery in the State of Delaware (or if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware). If any action the subject matter of which is within the scope of the preceding sentence is filed in a court other than a court located within the State of Delaware (a “ Foreign Action ”) in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce the preceding sentence and (ii) having service of process made upon such stockholder in any such action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.

 

15.               Severability . If any provision or provisions of this Amended Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Amended Certificate of Incorporation (including, without limitation, each portion of any paragraph of this Amended Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (ii) to the fullest extent possible, the provisions of this Amended Certificate of Incorporation (including, without limitation, each such portion of any paragraph of this Amended Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its Directors, officers, employees and agents from personal liability in respect of their good faith service to or for the benefit of the Corporation to the fullest extent permitted by law.

 

16.               Definitions . As used in this Amended Certificate of Incorporation, unless the context otherwise requires or as set forth in another Article or Section of this Amended Certificate of Incorporation, the term:

 

 
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(a)                 Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person; provided , that (i) neither the Corporation nor any of its subsidiaries will be deemed an Affiliate of any stockholder of the Corporation or any of such stockholders’ Affiliates and (ii) no stockholder of the Corporation will be deemed an Affiliate of any other stockholder of the Corporation, in each case, solely by reason of any investment in the Corporation or any rights conferred on such stockholder pursuant to the Investor Rights Agreement (including any representatives of such stockholder serving on the Board).

 

(b)                Amended Certificate of Incorporation ” is defined in the recitals.

 

(c)                 Board ” is defined in Section 5.1(ii)(1).

 

(d)                Business Day ” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in the City of New York.

 

(e)                By-laws ” is defined in Section 7.2.

 

(f)                 Chairman ” means the Chairman of the Board.

 

(g)                Chief Executive Officer ” means the Chief Executive Officer of the Corporation.

 

(h)                Class A Common Stock ” is defined in Section 4.1.

 

(i)                  Class B Common Stock ” is defined in Section 4.1.

 

(j)                  Common Stock ” is defined in Section 4.1.

 

 
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(k)                control ” (including the terms “ controlling ” and “ controlled ”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of such subject Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise.

 

(l)                  Corporation ” means vTv Therapeutics Inc.

 

(m)                Covered Person ” is defined in Section 11.1.

 

(n)                 Director ” is defined in Section 7.2.

 

(o)                 Exchange Act ” means the Securities Exchange Act of 1934, as amended, and any successor law or statute, together with the rules and regulations promulgated thereunder.

 

(p)                 Exchange Agreement ” means the Exchange Agreement, dated as of July 29, 2015, by and among vTv Therapeutics LLC, the Corporation and vTv Therapeutics Holdings LLC (and its successors and assigns), as the same may be amended, restated, supplemented and/or otherwise modified, from time to time.

 

(q)                 Exempted Person ” is defined in Section 9.2.

 

(r)                  Family Member ” shall mean with respect to any natural person, the spouse, parents, grandparents, lineal descendants, siblings of such person or such person's spouse, and lineal descendants of siblings of such person or such person's spouse. Lineal descendants shall include adopted persons, but only so long as they are adopted during minority.

 

(s)                 Foreign Action ” is defined in Section 14.

 

(t)                  General Corporation Law ” is defined in the recitals.

 

(u)                 Investor Rights Agreement ” means that certain Investor Rights Agreement, dated as of July 29, 2015, by and between the Corporation and vTv Therapeutics Holdings LLC (and its successors and assigns), as the same may be amended, restated, supplemented and/or otherwise modified, from time to time.

 

 
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(v)                Nonvoting Common Unit ” means a Nonvoting Common Unit of vTv Therapeutics LLC.

 

(w)               Paired Interest ” means one Nonvoting Common Unit together with one share of Class B Common Stock, subject to adjustment pursuant to Section 2.03(a) of the Exchange Agreement.

 

(x)                 Person ” means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity.

 

(y)                Preferred Stock ” is defined in Section 4.1.

 

(z)                 Principal Stockholders ” means vTv Therapeutics Holdings LLC (and its successors and assigns), vTvx I Holdings LLC, vTvx II Holdings LLC, M&F TTP Holdings LLC and any other Affiliates thereof or of MacAndrews & Forbes Incorporated.

 

(aa)              Proceeding ” is defined in Section 11.1.

 

(bb)             Specified Activity ” is defined in Section 9.2.

 

(cc)              Stock Adjustment ” is defined in Section 5.1(ii)(3).

 

(dd)             Triggering Event ” means the first date on which the Principal Stockholders cease to beneficially own (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act) shares representing at least 50% of the issued and outstanding shares of Common Stock.

 

(ee)             Vice Chairman ” means the Vice Chairman of the Board.

 

[Remainder of page intentionally left blank.]

 

 
 

 

IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation of vTv Therapeutics Inc. has been duly executed by the authorized officer below this 29 th day of July 2015.

 

By: /s/ Stephen L. Holcombe  
    Name: Stephen L. Holcombe  
    Title: President and Chief Executive Officer  

 

 

[Signature Page to Amended and Restated Certificate of Incorporation]

 

 
 

Exhibit 3.2

 

 

 

 

 

AMENDED AND RESTATED BY-LAWS

 

of

 

vtv therapeutics INC.

 

(A Delaware Corporation)

 

 

 

 

 

 

 

 
 

TABLE OF CONTENTS

 

Page

 

ARTICLE 1 DEFINITIONS 1
ARTICLE 2 STOCKHOLDERS 3
ARTICLE 3 DIRECTORS 11
ARTICLE 4 COMMITTEES OF THE BOARD 17
ARTICLE 5 OFFICERS 18
ARTICLE 6 GENERAL PROVISIONS 20

 

 
 

ARTICLE 1

 

DEFINITIONS

 

As used in these By-laws, unless the context otherwise requires, the term:

 

1.1               “Assistant Secretary” means an Assistant Secretary of the Corporation.

 

1.2               “Assistant Treasurer” means an Assistant Treasurer of the Corporation.

 

1.3               “Board” means the Board of Directors of the Corporation.

 

1.4               “By-laws” means the By-laws of the Corporation, as amended and restated.

 

1.5               “Certificate of Incorporation” means the Certificate of Incorporation of the Corporation, as amended and restated.

 

1.6               “Chairman” means the Chairman of the Board and includes any Executive Chairman.

 

1.7               “Chief Executive Officer” means the Chief Executive Officer of the Corporation.

 

1.8               “control” (including the terms “controlling” and “controlled”), with respect to the relationship between or among two or more persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of such subject person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise.

 

1.9               “Corporation” means vTv Therapeutics Inc.

 

1.10             “Derivative” is defined in Section 2.2(D)(iii).

 

1.11             “Directors” means the directors of the Corporation.

 

1.12             “Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor law or statute, and the rules and regulations promulgated thereunder.

 

1.13             “Executive Chairman” means the Executive Chairman of the Board.

 

1.14             “General Corporation Law” means the General Corporation Law of the State of Delaware, as amended.

 

1.15             “Investor Rights Agreement” means that certain Investor Rights Agreement, dated as of July 29, 2015, by and between the Corporation and vTv Therapeutics Holdings LLC (and its successors and assigns), as the same may be amended, restated, supplemented and/or otherwise modified, from time to time.

 

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1.16           “law” means any U.S. or non-U.S., federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a governmental authority (including any department, court, agency or official, or non-governmental self-regulatory organization, agency or authority and any political subdivision or instrumentality thereof).

 

1.17           “Nominating Stockholder” is defined in Section 3.3(B).

 

1.18           “Notice of Business” is defined in Section 2.2(C).

 

1.19           “Notice of Nomination” is defined in Section 3.3(C).

 

1.20           “Notice Record Date” is defined in Section 2.4(A).

 

1.21           “Office of the Corporation” means the principal executive offices of the Corporation, anything in Section 131 of the General Corporation Law to the contrary notwithstanding.

 

1.22           “President” means the President of the Corporation.

 

1.23           “Proponent” is defined in Section 2.2(D)(i).

 

1.24           “Public Disclosure” is defined in Section 2.2(I).

 

1.25           “Qualifying Shares” is defined in Section 3.4.

 

1.26           “SEC” means the Securities and Exchange Commission.

 

1.27           “Secretary” means the Secretary of the Corporation.

 

1.28           “Stockholder Associated Person” is defined in Section 2.2(J).

 

1.29           “Stockholder Business” is defined in Section 2.2(B).

 

1.30           “Stockholder Information” is defined in Section 2.2(D)(iii).

 

1.31           “Stockholder Nominees” is defined in Section 3.3(B).

 

1.32           “Stockholders” means the stockholders of the Corporation.

 

1.33           “Treasurer” means the Treasurer of the Corporation.

 

1.34           “Triggering Event” means shall have the meaning set forth in the Certificate of Incorporation.

 

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1.35           “Vice Chairman” means the Vice Chairman of the Board.

 

1.36           “Vice President” means a Vice President of the Corporation.

 

1.37           “Voting Commitment” is defined in Section 3.4.

 

1.38           “Voting Record Date” is defined in Section 2.4(A).

 

ARTICLE 2

 

STOCKHOLDERS

 

2.1              Place of Meetings . Meetings of Stockholders may be held within or without the State of Delaware, at such place or solely by means of remote communication or otherwise, as may be designated by the Board from time to time.

 

2.2              Annual Meetings; Stockholder Proposals .

 

(A)      A meeting of Stockholders for the election of Directors and other business shall be held annually at such date and time as may be designated by the Board from time to time.

 

(B)      At an annual meeting of the Stockholders, only business (other than business relating to the nomination or election of Directors, which is governed by Section 3.3) that has been properly brought before the Stockholder meeting in accordance with the procedures set forth in this Section 2.2 shall be conducted. To be properly brought before a meeting of Stockholders, such business must be brought before the meeting (i) by or at the direction of the Board or any committee thereof or (ii) by a Stockholder who (a) was a Stockholder of record of the Corporation when the notice required by this Section 2.2 is delivered to the Secretary and at the time of the meeting, (b) is entitled to vote at the meeting and (c) complies with the notice and other provisions of this Section 2.2. Subject to Section 2.2(K), and except with respect to nominations or elections of Directors, which are governed by Section 3.3, Section 2.2(B)(ii) is the exclusive means by which a Stockholder may bring business before a meeting of Stockholders; provided that if Rule 14a-8 of the Exchange Act (or any successor rule) is applicable, a Stockholder may not bring business before any meeting if the Stockholder fails to meet the requirements of such rule. Any business brought before a meeting in accordance with Section 2.2(B)(ii) is referred to as “ Stockholder Business .”

 

(C)      Subject to Section 2.2(K), at any annual meeting of Stockholders, all proposals of Stockholder Business must be made by timely written notice given by or on behalf of a Stockholder of record of the Corporation (the “ Notice of Business ”) and must otherwise be a proper matter for Stockholder action. To be timely, the Notice of Business must be delivered personally or mailed to, and received at the Office of the Corporation, addressed to the Secretary, by no earlier than 120 days and no later than 90 days before the first anniversary of the date of the prior year’s annual meeting of Stockholders; provided , however , that if (i) the annual meeting of Stockholders is advanced by more than 30 days, or delayed by more than 60 days, from the first anniversary of the prior year’s annual meeting of Stockholders, (ii) no annual meeting was held during the prior year or (iii) in the case of the Corporation’s first annual meeting of Stockholders as a corporation with a class of equity securities registered under the Exchange Act, the notice by the Stockholder to be timely must be received (a) no earlier than 120 days before such annual meeting and (b) no later than the later of 90 days before such annual meeting and the tenth day after the day on which the notice of such annual meeting was made by mail or Public Disclosure. In no event shall an adjournment, postponement or deferral, or Public Disclosure of an adjournment, postponement or deferral, of a Stockholder meeting commence a new time period (or extend any time period) for the giving of the Notice of Business.

 

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(D)      The Notice of Business must set forth:

 

(i)      the name and record address of each Stockholder proposing Stockholder Business (the “ Proponent ”), as they appear on the Corporation’s books;

 

(ii)      the name and address of any Stockholder Associated Person;

 

(iii)      as to each Proponent and any Stockholder Associated Person, (a) the class or series and number of shares of stock directly or indirectly held of record and beneficially by the Proponent or Stockholder Associated Person, (b) the date such shares of stock were acquired, (c) a description of any agreement, arrangement or understanding, direct or indirect, with respect to such Stockholder Business between or among the Proponent, any Stockholder Associated Person or any others (including their names) acting in concert with any of the foregoing, (d) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, hedging transactions, warrant, convertible security, stock appreciation right or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class of securities and/or borrowed or loaned shares) that has been entered into, directly or indirectly, as of the date of the Proponent’s notice by, or on behalf of, the Proponent or any Stockholder Associated Person, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of the Proponent or any Stockholder Associated Person with respect to shares of stock of the Corporation or with a value derived in whole or in part from the value or decrease in value of any class or series of stock of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of stock of the Corporation or otherwise (a “ Derivative ”), (e) a description in reasonable detail of any proxy (including revocable proxies), contract, arrangement, understanding or other relationship pursuant to which the Proponent or Stockholder Associated Person has a right to vote any shares of stock of the Corporation, (f) any rights to dividends on the stock of the Corporation owned beneficially by the Proponent or Stockholder Associated Person that are separated or separable from the underlying stock of the Corporation, (g) any proportionate interest in stock of the Corporation or Derivatives held, directly or indirectly, by a general or limited partnership in which the Proponent or Stockholder Associated Person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner and (h) any performance-related fees (other than an asset-based fee) that the Proponent or Stockholder Associated Person is entitled to based on any increase or decrease in the value of stock of the Corporation or Derivatives thereof, if any, as of the date of such notice. The information specified in Section 2.2(D)(i) to (iii) is referred to herein as “ Stockholder Information ”;

 

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(iv)      Stockholder Information with respect to any stock or other interests of the Corporation held by members of the Proponent’s or Stockholder Associated Person’s immediate family sharing the same household;

 

(v)       a representation to the Corporation that each Proponent is a holder of record of stock of the Corporation entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to propose such Stockholder Business;

 

(vi)      a brief description of the Stockholder Business desired to be brought before the annual meeting, the text of the proposal (including the text of any resolutions proposed for consideration and, if such business includes a proposal to amend the By-laws, the language of the proposed amendment) and the reasons for conducting such Stockholder Business at the meeting;

 

(vii)     any material interest of each Proponent and any Stockholder Associated Person in such Stockholder Business;

 

(viii)     a representation to the Corporation as to whether the Proponent intends (a) to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt such Stockholder Business or (b) otherwise to solicit proxies from the Stockholders in support of such Stockholder Business;

 

(ix)       all other information that would be required to be filed with the SEC if the Proponents or Stockholder Associated Persons were participants in a solicitation subject to Section 14 of the Exchange Act; and

 

(x)        a representation and covenant for the benefit of the Corporation that the Proponents shall provide any other information reasonably requested by the Corporation.

 

(E)      The Proponents shall also provide any other information reasonably requested by the Corporation within ten business days after such request.

 

(F)      In addition, the Proponent shall further update and supplement the information provided to the Corporation in the Notice of Business or upon the Corporation’s request pursuant to Section 2.2(E) as needed, so that such information shall be true and correct as of the record date for the meeting and as of the date that is the later of ten business days before the meeting or any adjournment or postponement thereof. Such update and supplement must be delivered personally or mailed to, and received at the Office of the Corporation, addressed to the Secretary, by no later than five business days after the record date for the meeting (in the case of the update and supplement required to be made as of the record date), and not later than seven business days before the date for the meeting (in the case of the update and supplement required to be made as of ten business days before the meeting or any adjournment or postponement thereof).

 

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(G)      The person presiding over the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the procedures set forth in this Section 2.2, and if he or she should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.

 

(H)      If the Proponent (or a qualified representative of the Proponent) does not appear at the meeting of Stockholders to present the Stockholder Business, such business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 2.2, to be considered a qualified representative of the Stockholder, a person must be a duly authorized officer, manager or partner of such Stockholder or must be authorized by a writing executed by such Stockholder or an electronic transmission delivered by such Stockholder to act for such Stockholder as proxy at the meeting of Stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of Stockholders.

 

(I)      “ Public Disclosure ” of any date or other information means disclosure thereof by a press release reported by the Dow Jones News Services, Associated Press or comparable U.S. national news service or in a document publicly filed by the Corporation with, or furnished by the Corporation to, the SEC pursuant to Sections 13, 14 or 15(d) of the Exchange Act.

 

(J)      “ Stockholder Associated Person ” means, with respect to any Stockholder, (i) any other beneficial owner of stock of the Corporation that is owned by such Stockholder and (ii) any person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Stockholder or such beneficial owner.

 

(K)      The notice requirements of this Section 2.2 shall be deemed satisfied with respect to Stockholder proposals that have been properly brought under Rule 14a-8 of the Exchange Act and that are included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting. Further, nothing in this Section 2.2 shall be deemed to affect any rights of the holders of any series of preferred stock of the Corporation pursuant to any applicable provision of the Certificate of Incorporation.

 

2.3              Special Meetings . Subject to any special rights of the holders of any series of preferred stock of the Corporation, and to the requirements of applicable law, special meetings of the stockholders of the Corporation may be called only (i) by or at the direction of the Board pursuant to a written resolution adopted by a majority of the total number of Directors that the Corporation would have it there were no vacancies or (ii) by or at the direction of the Chairman, the Vice Chairman or the Chief Executive officer. In addition, prior to a Triggering Event, special meeting of stockholders of the Corporation may be called by the Secretary of the Corporation at the request of the holders of a majority of the total voting power of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of Directors, voting together as a single class. Notice of every special meeting of the Stockholders shall state the purpose or purposes of such meeting. Except as otherwise required by law, the business conducted at a special meeting of Stockholders shall be limited exclusively to the business set forth in the Corporation’s notice of meeting, and the individual or group calling such meeting shall have exclusive authority to determine the business included in such notice.

 

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2.4              Record Date .

 

(A)      For the purpose of determining the Stockholders entitled to notice of any meeting of Stockholders or any adjournment thereof, unless otherwise required by the Certificate of Incorporation or applicable law, the Board may fix a record date (the “ Notice Record Date ”), which record date shall not precede the date on which the resolution fixing the record date was adopted by the Board and shall not be more than 60 or less than ten days before the date of such meeting. The Notice Record Date shall also be the record date for determining the Stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such Notice Record Date, that a later date on or before the date of the meeting shall be the date for making such determination (the “ Voting Record Date ”). For the purposes of determining the Stockholders entitled to express consent to corporate action in writing without a meeting, unless otherwise required by the Certificate of Incorporation or applicable law, the Board may fix a record date, which record date shall not precede the date on which the resolution fixing the record date was adopted by the Board and shall not be more than ten days after the date on which the record date was fixed by the Board. For the purposes of determining the Stockholders entitled to (i) receive payment of any dividend or other distribution or allotment of any rights, (ii) exercise any rights in respect of any change, conversion or exchange of stock or (iii) take any other lawful action, unless otherwise required by the Certificate of Incorporation or applicable law, the Board may fix a record date, which record date shall not precede the date on which the resolution fixing the record date was adopted by the Board and shall not be more than 60 days prior to such action.

 

(B)      If no such record date is fixed:

 

(i)      the record date for determining Stockholders entitled to notice of and to vote at a meeting of Stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held;

 

(ii)      the record date for determining Stockholders entitled to express consent to corporate action in writing without a meeting (unless otherwise provided in the Certificate of Incorporation), when no prior action by the Board is required by applicable law, shall be the first day on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law; and when prior action by the Board is required by applicable law, the record date for determining Stockholders entitled to express consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board takes such prior action; and

 

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(iii)      when a determination of Stockholders of record entitled to notice of or to vote at any meeting of Stockholders has been made as provided in this Section 2.4, such determination shall apply to any adjournment thereof, unless the Board fixes a new Voting Record Date for the adjourned meeting, in which case the Board shall also fix such Voting Record Date or a date earlier than such date as the new Notice Record Date for the adjourned meeting.

 

2.5              Notice of Meetings of Stockholders . Whenever, under the provisions of applicable law, the Certificate of Incorporation or these By-laws, Stockholders are required or permitted to take any action at a meeting, notice shall be given stating the place, if any, date and hour of the meeting, the means of remote communication, if any, by which Stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the Voting Record Date, if such date is different from the Notice Record Date, and, in the case of a special meeting, the purposes for which the meeting is called. Unless otherwise provided by these By-laws or applicable law, notice of any meeting shall be given, not less than ten nor more than 60 days before the date of the meeting, to each Stockholder entitled to vote at such meeting as of the Notice Record Date. If mailed, such notice shall be deemed to be given when deposited in the U.S. mail, with postage prepaid, and directed to the Stockholder at his or her address as it appears on the records of the Corporation. An affidavit of the Secretary, an Assistant Secretary or the transfer agent of the Corporation that the notice required by this Section 2.5 has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. If a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. Any business that might have been transacted at the meeting as originally called may be transacted at the adjourned meeting. If, however, the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each Stockholder of record entitled to vote at the meeting. If, after the adjournment, a new Voting Record Date is fixed for the adjourned meeting, the Board shall fix a new Notice Record Date in accordance with Section 2.4(B)(iii) hereof and shall give notice of such adjourned meeting to each Stockholder entitled to vote at such meeting as of the Notice Record Date.

 

2.6              Waivers of Notice . Whenever the giving of any notice to Stockholders is required by applicable law, the Certificate of Incorporation or these By-laws, a waiver thereof, given by the person entitled to said notice, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance by a Stockholder at a meeting shall constitute a waiver of notice of such meeting except when the Stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting has not been lawfully called or convened. Neither the business to be transacted at, nor the purposes of, any regular or special meeting of the Stockholders need be specified in any waiver of notice.

 

2.7              List of Stockholders . The Secretary shall prepare and make, at least ten days before every meeting of Stockholders, a complete, alphabetical list of the Stockholders entitled to vote at the meeting, and showing the address of each Stockholder and the number of shares registered in the name of each Stockholder. Such list may be examined by any Stockholder, the Stockholder’s agent, or attorney, at the Stockholder’s expense, for any purpose germane to the meeting, for a period of at least ten days prior to the meeting, during ordinary business hours at the principal place of business of the Corporation or on a reasonably accessible electronic network as provided by applicable law. If the meeting is to be held at a place, the list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any Stockholder who is present. If the meeting is held solely by means of remote communication, the list shall also be open for inspection as provided by applicable law. Except as provided by applicable law, the stock ledger shall be the only evidence as to who are the Stockholders entitled to examine the list of Stockholders or to vote in person or by proxy at any meeting of Stockholders.

 

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2.8              Quorum of Stockholders; Adjournment . Except as otherwise provided by these By-laws, at each meeting of Stockholders, the presence in person or by proxy of the holders of a majority of the voting power of all outstanding shares of stock entitled to vote at the meeting of Stockholders shall constitute a quorum for the transaction of any business at such meeting, except that, where a separate vote by a class or series of classes of shares is required, a quorum shall consist of no less than a majority of the voting power of all outstanding shares of stock of such class or series of classes, as applicable. In the absence of a quorum, the holders of a majority in voting power of the shares of stock present in person or represented by proxy at any meeting of Stockholders, including an adjourned meeting, may adjourn such meeting to another time and place. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of Directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided , however , that the foregoing shall not limit the right of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.

 

2.9              Voting; Proxies . Unless otherwise provided by the General Corporation Law or in the Certificate of Incorporation, every Stockholder entitled to vote at any meeting of Stockholders shall be entitled to one vote for each share of stock held by such Stockholder which has voting power upon the matter in question. At any meeting of Stockholders, all matters other than the election of Directors, except as otherwise provided by the Certificate of Incorporation, these By-laws or any applicable law, shall be decided by the affirmative vote of a majority in voting power of shares of stock present in person or represented by proxy and entitled to vote thereon. At all meetings of Stockholders for the election of Directors, a plurality of the votes cast shall be sufficient to elect Directors. Each Stockholder entitled to vote at a meeting of Stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such Stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy expressly provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only so long as, it is coupled with an interest sufficient in law to support an irrevocable power. A Stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary a revocation of the proxy or by delivering a new proxy bearing a later date.

 

2.10           Voting Procedures and Inspectors at Meetings of Stockholders . The Board, in advance of any meeting of Stockholders, shall appoint one or more inspectors, who may be employees of the Corporation, to act at the meeting and make a written report thereof. The Board may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall (A) ascertain the number of shares outstanding and the voting power of each, (B) determine the shares represented at the meeting and the validity of proxies and ballots, (C) count all votes and ballots, (D) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors and (E) certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of their duties. Unless otherwise provided by the Board, the date and time of the opening and the closing of the polls for each matter upon which the Stockholders will vote at a meeting shall be determined by the person presiding at the meeting and shall be announced at the meeting. No ballot, proxies, votes or any revocation thereof or change thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery of the State of Delaware upon application by a Stockholder shall determine otherwise. In determining the validity and counting of proxies and ballots cast at any meeting of Stockholders, the inspectors may consider such information as is permitted by applicable law. No person who is a candidate for office at an election may serve as an inspector at such election.

 

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2.11           Conduct of Meetings; Adjournment . The Board may adopt such rules and procedures for the conduct of Stockholder meetings as it deems appropriate. At each meeting of Stockholders, the Chairman or, in the absence of the Chairman, the Vice Chairman or, in the absence of or if there is no Vice Chairman, the Chief Executive Officer or, in the absence of the Chairman, the Vice Chairman and the Chief Executive Officer, the President or, if there is no Chairman, Vice Chairman, Chief Executive Officer or President or if they are absent, a Vice President and, in case more than one Vice President shall be present, that Vice President designated by the Board (or in the absence of any such designation, the most senior Vice President present), shall preside over the meeting. Except to the extent inconsistent with the rules and procedures as adopted by the Board, the person presiding over the meeting of Stockholders shall have the right and authority to convene, adjourn and reconvene the meeting from time to time, to prescribe such additional rules and procedures and to do all such acts as, in the judgment of such person, are appropriate for the proper conduct of the meeting. Such rules and procedures, whether adopted by the Board or prescribed by the person presiding over the meeting, may include, (A) the establishment of an agenda or order of business for the meeting, (B) rules and procedures for maintaining order at the meeting and the safety of those present, (C) limitations on attendance at or participation in the meeting to Stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the person presiding over the meeting shall determine, (D) restrictions on entry to the meeting after the time fixed for the commencement thereof and (E) limitations on the time allotted to questions or comments by participants. The person presiding over any meeting of Stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, may determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such presiding person should so determine, he or she shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board or the person presiding over the meeting, meetings of Stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. The Secretary or, in his or her absence, one of the Assistant Secretaries, shall act as secretary of the meeting. If none of the officers above designated to act as the person presiding over the meeting or as secretary of the meeting shall be present, a person presiding over the meeting or a secretary of the meeting, as the case may be, shall be designated by the Board and, if the Board has not so acted, in the case of the designation of a person to act as secretary of the meeting, designated by the person presiding over the meeting.

 

2.12           Order of Business . The order of business at all meetings of Stockholders shall be as determined by the person presiding over the meeting.

 

2.13           Written Consent of Stockholders Without a Meeting . If, and only if, the Certificate of Incorporation expressly permits action to be taken at any annual or special meeting of Stockholders without a meeting, without prior notice and without a vote, then a consent or consents in writing, setting forth the action to be so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered (by hand or by certified or registered mail, return receipt requested) to the Corporation by delivery to its registered office in the State of Delaware, the Office of the Corporation or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of Stockholders are recorded. Every written consent shall bear the date of signature of each Stockholder who signs the consent, and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered in the manner required by this Section 2.13, written consents signed by a sufficient number of holders to take action are delivered to the Corporation as aforesaid. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall, to the extent required by applicable law, be given to those Stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation.

 

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ARTICLE 3

 

DIRECTORS

 

3.1              General Powers . The business and affairs of the Corporation shall be managed by or under the direction of the Board. The Board may adopt such rules and procedures, not inconsistent with the Certificate of Incorporation, these By-laws or applicable law, as it may deem proper for the conduct of its meetings and the management of the Corporation.

 

3.2              Number; Term of Office . The Board shall consist of three to 20 members, with the then-authorized number being fixed from time to time by the Board. As of the date of these By-laws, the number of Directors shall be six. Subject to obtaining any required stockholder votes or consents under the Investor Rights Agreement (as long as such agreement is in effect), each Director shall hold office until a successor is duly elected and qualified or until the Director’s earlier death, resignation, disqualification or removal. During any period when the holders of any series of preferred stock of the Corporation have the right to elect one or more Directors in accordance with the Board’s designation for such series of preferred stock set forth in the Certificate of Incorporation, upon the commencement, and for the duration, of the period during which such right continues: (i) the then total authorized number of Directors shall automatically be increased by such specified number of Directors to which any series of preferred stock of the Corporation is then entitled to elect, and the holders of the related series of preferred stock shall be entitled to elect such Directors pursuant to the provisions of the Board’s designation for such series of preferred stock, and (ii) each such Director elected by holders of preferred stock shall serve until such Director’s successor shall have been duly elected and qualified, or until such Director’s right to hold such office terminates pursuant to such provision, whichever occurs earlier, subject to his or her earlier death, disqualification, resignation or removal. Except as otherwise provided by the Board in the resolution or resolutions establishing such series, whenever the holders of any series of preferred stock of the Corporation having such right to elect Directors are divested of such right pursuant to the provisions of such stock, the terms of office of all such Directors elected by the holders of such preferred stock, or elected to fill any vacancies resulting from death, resignation, disqualification or removal of such Directors, shall forthwith terminate and the total and authorized number of Directors shall be reduced accordingly.

 

3.3              Nominations of Directors .

 

(A)      Subject to Section 3.3(K) and obtaining any required stockholder votes or consents under the Investor Rights Agreement and except as otherwise provided by the Investor Rights Agreement, only persons who are nominated in accordance with the procedures set forth in this Section 3.3 are eligible for election as Directors.

 

(B)      Nominations of persons for election to the Board may only be made at a meeting properly called for the election of Directors and only (i) by or at the direction of the Board or any committee thereof or (ii) by a Stockholder who (a) was a Stockholder of record of the Corporation when the notice required by this Section 3.3 is delivered to the Secretary and at the time of the meeting, (b) is entitled to vote for the election of Directors at the meeting and (c) complies with the notice and other provisions of this Section 3.3. Subject to Section 3.3(K) and obtaining any required stockholder votes or consents under the Investor Rights Agreement, Section 3.3(B)(ii) is the exclusive means by which a Stockholder may nominate a person for election to the Board. Persons nominated in accordance with Section 3.3(B)(ii) are referred to as “ Stockholder Nominees .” A Stockholder nominating persons for election to the Board is referred to as the “ Nominating Stockholder .”

 

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(C)      Subject to Section 3.3(K) and obtaining any required stockholder votes or consents under the Investor Rights Agreement, all nominations of Stockholder Nominees must be made by timely written notice given by or on behalf of a Stockholder of record of the Corporation (the “ Notice of Nomination ”). To be timely, the Notice of Nomination must be delivered personally or mailed to and received at the Office of the Corporation, addressed to the attention of the Secretary, by the following dates:

 

(i)      in the case of the nomination of a Stockholder Nominee for election to the Board at an annual meeting of Stockholders, no earlier than 120 days and no later than 90 days before the first anniversary of the date of the prior year’s annual meeting of Stockholders; provided , however , that if (a) the annual meeting of Stockholders is advanced by more than 30 days, or delayed by more than 60 days, from the first anniversary of the prior year’s annual meeting of Stockholders, (b) no annual meeting was held during the prior year or (c) in the case of the Corporation’s first annual meeting of Stockholders as a corporation with a class of equity security registered under the Exchange Act, the notice by the Stockholder to be timely must be received (1) no earlier than 120 days before such annual meeting and (2) no later than the later of 90 days before such annual meeting and the tenth day after the day on which the notice of such annual meeting was made by mail or Public Disclosure; and

 

(ii)      in the case of the nomination of a Stockholder Nominee for election to the Board at a special meeting of Stockholders, no earlier than 120 days before and no later than the later of 90 days before such special meeting and the tenth day after the day on which the notice of such special meeting was made by mail or Public Disclosure.

 

(D)      Notwithstanding anything to the contrary, if the number of Directors to be elected to the Board at a meeting of Stockholders is increased and there is no Public Disclosure by the Corporation naming the nominees for the additional directorships at least 100 days before the first anniversary of the preceding year’s annual meeting, a Notice of Nomination shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered personally and received at the Office of the Corporation, addressed to the attention of the Secretary, no later than the close of business on the tenth day following the day on which such Public Disclosure is first made by the Corporation.

 

(E)      In no event shall an adjournment, postponement or deferral, or Public Disclosure of an adjournment, postponement or deferral, of an annual or special meeting commence a new time period (or extend any time period) for the giving of the Notice of Nomination.

 

(F)      The Notice of Nomination shall set forth:

 

(i)      the Stockholder Information with respect to each Nominating Stockholder and Stockholder Associated Person;

 

(ii)      a representation to the Corporation that each Nominating Stockholder is a holder of record of stock of the Corporation entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to propose such nomination;

 

(iii)     all information regarding each Stockholder Nominee and Stockholder Associated Person that would be required to be disclosed in a solicitation of proxies subject to Section 14 of the Exchange Act, the written consent of each Stockholder Nominee to being named in a proxy statement as a nominee and to serve if elected and a completed signed questionnaire, representation and agreement required by Section 3.4;

 

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(iv)      a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among a Nominating Stockholder, Stockholder Associated Person or their respective associates, or others acting in concert therewith, including all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the Nominating Stockholder, Stockholder Associated Person or any person acting in concert therewith were the “registrant” for purposes of such rule and the Stockholder Nominee were a director or executive of such registrant;

 

(v)      Stockholder Information with respect to any stock or other interests of the Corporation held by members of the Nominating Stockholder’s or its Stockholder Associated Person’s immediate family sharing the same household;

 

(vi)     a representation to the Corporation as to whether each Nominating Stockholder intends (a) to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve the nomination or (b) otherwise to solicit proxies from Stockholders in support of such nomination;

 

(vii)    all other information that would be required to be filed with the SEC if the Nominating Stockholders and Stockholder Associated Persons were participants in a solicitation subject to Section 14 of the Exchange Act; and

 

(viii)   a representation and covenant for the benefit of the Corporation that the Nominating Stockholders shall provide any other information reasonably requested by the Corporation.

 

(G)      The Nominating Stockholders shall also provide any other information reasonably requested by the Corporation within ten business days after such request.

 

(H)      In addition, the Nominating Stockholders shall further update and supplement the information provided to the Corporation in the Notice of Nomination or upon the Corporation’s request pursuant to Section 3.3(G) as needed, so that such information shall be true and correct as of the record date for the meeting and as of the date that is ten business days before the meeting or any adjournment or postponement thereof. Such update and supplement must be delivered personally or mailed to, and received at the Office of the Corporation, addressed to the Secretary, by no later than five business days after the record date for the meeting (in the case of the update and supplement required to be made as of the record date), and not later than seven business days before the date for the meeting (in the case of the update and supplement required to be made as of ten business days before the meeting or any adjournment or postponement thereof).

 

(I)      The person presiding over the meeting shall, if the facts warrant, determine and declare to the meeting, that the nomination was not made in accordance with the procedures set forth in this Section 3.3, and, if he or she should so determine, he or she shall so declare to the meeting and the defective nomination shall be disregarded.

 

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(J)      If the Stockholder (or a qualified representative of the Stockholder) does not appear at the applicable Stockholder meeting to nominate the Stockholder Nominees, such nomination shall be disregarded and such business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 3.3, to be considered a qualified representative of the Stockholder, a person must be a duly authorized officer, manager or partner of such Stockholder or must be authorized by a writing executed by such Stockholder or an electronic transmission delivered by such Stockholder to act for such Stockholder as proxy at the meeting of Stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of Stockholders.

 

(K)      Nothing in this Section 3.3 shall be deemed to affect any rights of the holders of any series of preferred stock of the Corporation pursuant to any applicable provision of the Certificate of Incorporation.

 

3.4              Nominee and Director Qualifications . Unless the Board determines otherwise or the Investor Rights Agreement provides otherwise (as long as such agreement is in effect), to be eligible to be a nominee for election or reelection as a Director, a person must deliver (in accordance with the time periods prescribed for delivery of notice by the Board) to the Secretary at the Office of the Corporation a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such person (A) is not and will not become a party to (i) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person will act or vote as a Director on any issue or question (a “ Voting Commitment ”) that has not been disclosed to the Corporation or (ii) any Voting Commitment that could limit or interfere with such person’s ability to comply with such person’s fiduciary duties as a Director under applicable law, (B) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a Director that has not been disclosed therein, (C) beneficially owns, or agrees to purchase within 90 days if elected as a Director, not less than 1,000 shares (including options to purchase shares, restricted shares and similar interests) of Class A common stock, par value $0.01 per share, of the Corporation (the “ Qualifying Shares ”) (subject to adjustment for any stock splits or stock dividends occurring after the date of such representation or agreement), will not dispose of such minimum number of shares so long as such person is a Director and has disclosed therein whether all or any portion of the Qualifying Shares were purchased with any financial assistance provided by any other person and whether any other person has any interest in the Qualifying Shares and (D) in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading and other policies and guidelines of the Corporation that are applicable to Directors; provided , however , that notwithstanding anything in these By-laws to the contrary, unless the Investor Rights Agreement provides otherwise (as long as such agreement is in effect), the provisions of this Section 3.4 shall not apply to any Director nominated by Holdings (as such term is defined in the Investors Rights Agreement) pursuant to the terms of the Investor Rights Agreement.

 

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3.5              Resignation . Any Director may resign at any time by notice given in writing or by electronic transmission to the Corporation. Such resignation shall take effect at the date of receipt of such notice or at such later time as is therein specified, and, unless otherwise specified in such resignation, the acceptance of such resignation shall not be necessary to make it effective.

 

3.6              Vacancies and Newly Created Directorships . Subject to the rights of the holders of any one or more series of preferred stock of the Corporation then outstanding and subject to obtaining any required stockholder votes or consents under the Investor Rights Agreement, newly created directorships resulting from any increase in the authorized number of Directors or any vacancies on the Board resulting from death, resignation, retirement, disqualification, removal from office or other cause shall be filled by the affirmative vote of a majority of the remaining Directors then in office, even if less than a quorum of the Board or by the affirmative vote of the holders of a majority of the total voting power of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of Directors, voting together as a single class. Any Director so chosen shall hold office until the next election of the class for which such Director shall have been chosen and until his or her successor shall be duly elected and qualified or until such Director’s earlier death, disqualification, resignation or removal. No decrease in the number of Directors shall shorten the term of any Director then in office.

 

3.7              Removal of Directors . Except for Directors elected by the holders of a series of preferred stock of the Corporation, and subject to obtaining any required stockholder votes or consents under the Investor Rights Agreement, any Director or the entire Board may be removed from office at any time, with or without cause, by the affirmative vote of the holders of a majority of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of Directors, voting together as a single class.

 

3.8              Compensation . Each Director, in consideration of his or her service as such, shall be entitled to receive from the Corporation such amount per annum or such fees (payable in cash or equity) for attendance at Directors’ meetings, or both, as the Board may from time to time determine, together with reimbursement for the reasonable out-of-pocket expenses, if any, incurred by such Director in connection with the performance of his or her duties. Each Director who shall serve as a member of any committee of Directors in consideration of serving as such shall be entitled to such additional amount per annum or such fees for attendance at committee meetings, or both, as the Board may from time to time determine, together with reimbursement for the reasonable out-of-pocket expenses, if any, incurred by such Director in the performance of his or her duties. Nothing contained in this Section 3.8 shall preclude any Director from serving the Corporation or its subsidiaries in any other capacity and receiving proper compensation therefor.

 

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3.9              Regular Meetings . Regular meetings of the Board may be held without notice at such times and at such places within or without the State of Delaware as may be determined from time to time by the Board or its Chairman.

 

3.10           Special Meetings . Special meetings of the Board may be held at such times and at such places within or without the State of Delaware as may be determined by the Chairman, the Vice Chairman or the Chief Executive Officer on at least 24 hours’ notice to each Director given by one of the means specified in Section 3.13 hereof other than by mail, or on at least three days’ notice if given by mail. Special meetings shall be called by the Chairman, the Vice Chairman, the Chief Executive Officer, the President or the Secretary in like manner and on like notice on the written request of any two or more Directors.

 

3.11           Telephone Meetings . Board or Board committee meetings may be held by means of telephone conference or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation by a Director in a meeting pursuant to this Section 3.11 shall constitute presence in person at such meeting.

 

3.12           Adjourned Meetings . A majority of the Directors present at any meeting of the Board, including an adjourned meeting, whether or not a quorum is present, may adjourn and reconvene such meeting to another time and place. At least 24 hours’ notice of any adjourned meeting of the Board shall be given to each Director whether or not present at the time of the adjournment, if such notice shall be given by one of the means specified in Section 3.13 hereof other than by mail, or at least three days’ notice if by mail. Any business may be transacted at an adjourned meeting that might have been transacted at the meeting as originally called.

 

3.13           Notice Procedure . Subject to Sections 3.10 and 3.14 hereof, whenever notice is required to be given to any Director by applicable law, the Certificate of Incorporation or these By-laws, such notice shall be deemed given effectively if given in person or by telephone, mail or electronic mail addressed to such Director at such Director’s address or email address, as applicable, as it appears on the records of the Corporation, facsimile or by other means of electronic transmission.

 

3.14           Waiver of Notice . Whenever the giving of any notice to Directors is required by applicable law, the Certificate of Incorporation or these By-laws, a waiver thereof, in writing signed by the Director entitled to the notice, whether before or after such notice is required, shall be deemed equivalent to notice. Attendance by a Director at a meeting shall constitute a waiver of notice of such meeting except when the Director attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting was not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special Board or committee meeting need be specified in any waiver of notice.

 

3.15           Organization . At each meeting of the Board, the Chairman or, in the absence of the Chairman, the Vice Chairman or, in the absence of or if there is no Vice Chairman, the Chief Executive Officer or, in the absence of the Chairman, the Vice Chairman and the Chief Executive Officer, another Director selected by the Board shall preside. The Secretary shall act as secretary at each meeting of the Board. If the Secretary is absent from any meeting of the Board, an Assistant Secretary shall perform the duties of secretary at such meeting; and in the absence from any such meeting of the Secretary and all Assistant Secretaries, the person presiding at the meeting may appoint any person to act as secretary of the meeting.

 

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3.16           Quorum of Directors . The presence in person of a majority of the total members of the Board shall be necessary and sufficient to constitute a quorum for the transaction of business at any meeting of the Board.

 

3.17           Action by Majority Vote . Except as otherwise expressly required by these By-laws, or the Certificate of Incorporation, the vote of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board; provided, that to the extent one or more Directors recuses himself or herself from an act, the act of a majority of the remaining Directors then in office shall be the act of the Board.

 

3.18           Action Without Meeting . Unless otherwise restricted by these By-laws, 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 all Directors or members of such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writings or electronic transmissions are filed with the minutes of proceedings of the Board or committee.

 

ARTICLE 4

 

COMMITTEES OF THE BOARD

 

The Board may, by resolution, designate one or more committees, each committee to consist of one or more of the Directors of the Corporation. The Board may, by resolution, adopt charters for one or more of such committees. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. If a member of a committee shall be absent from any meeting, or disqualified from voting thereat, the remaining member or members present at the meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may, by a unanimous vote, appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent permitted by applicable law, and to the extent provided in the resolution of the Board designating such committee or the charter for such committee, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers that may require it to the extent so authorized by the Board. The Board may remove any Director from any committee at any time, with or without cause. Unless the Board provides otherwise, at all meetings of such committee, a majority of the then authorized members of the committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members of the committee present at any meeting at which there is a quorum shall be the act of the committee. Each committee shall keep regular minutes of its meetings. Unless the Board provides otherwise, each committee designated by the Board may make, alter and repeal rules and procedures for the conduct of its business. In the absence of such rules and procedures each committee shall conduct its business in the same manner as the Board conducts its business pursuant to Article 3.

 

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ARTICLE 5

 

OFFICERS

 

5.1               Positions; Election . The officers of the Corporation shall be a Chairman, Vice Chairman, Executive Chairman, Chief Executive Officer, President, Vice Presidents, Secretary, Treasurer and any other officers as the Board may elect from time to time, who shall exercise such powers and perform such duties as shall be determined by the Board from time to time. Any number of offices may be held by the same person.

 

5.2               Term of Office . Each officer of the Corporation shall hold office until such officer’s successor is elected and qualifies or until such officer’s earlier death, resignation or removal. Any officer may resign at any time upon written notice to the Corporation. Such resignation shall take effect at the date of receipt of such notice or at such later time as is therein specified, and, unless otherwise specified, the acceptance of such resignation shall not be necessary to make it effective. The resignation of an officer shall be without prejudice to the contract rights of the Corporation, if any. Any officer may be removed at any time with or without cause by the Board. Any vacancy occurring in any office of the Corporation may be filled by the Board. The election or appointment of an officer shall not of itself create contract rights.

 

5.3               Chairman . The Chairman shall preside at all meetings of the Stockholders and at all meetings of the Board and shall exercise such powers and perform such other duties as shall be determined from time to time by the Board. In addition to the responsibilities, powers and duties of the Chairman, an Executive Chairman (if there be one) shall exercise such powers and perform such other duties as shall be determined from time to time by the Board and may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts and other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by resolution of the Board or by these By-laws to some other officer or agent of the Corporation, or shall be required by applicable law otherwise to be signed or executed.

 

5.4               Vice Chairman . The Vice Chairman (if there be one) shall preside at all meetings of the Stockholders and at all meetings of the Board at which the Chairman is not present and shall exercise such powers and perform such other duties as shall be determined from time to time by the Board.

 

5.5               Chief Executive Officer . The Chief Executive Officer shall have general supervision over, and direction of, the business and affairs of the Corporation, subject, however, to the control of the Board and of any duly authorized committee of the Board. The Chief Executive Officer shall preside at all meetings of the Stockholders and at all meetings of the Board at which the Chairman and the Vice Chairman (if there be one) are not present. The Chief Executive Officer may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts and other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by resolution of the Board or by these By-laws to some other officer or agent of the Corporation, or shall be required by applicable law otherwise to be signed or executed and, in general, the Chief Executive Officer shall perform all duties incident to the office of Chief Executive Officer of a corporation and such other duties as may be determined from time to time by the Board.

 

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5.6               President . The President shall have duties incident to the office of President, and any other duties as may from time to time be assigned to the President by the Chief Executive Officer (if the President and Chief Executive Officer are not the same person) or the Board and subject to the control of the Chief Executive Officer (if the President and Chief Executive Officer are not the same person) and the Board in each case. The President shall preside at all meetings of the Stockholders at which the Chairman, the Vice Chairman (if there be one) and the Chief Executive Officer are not present. The President may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts and other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by these By-laws to some other officer or agent of the Corporation, or shall be required by applicable law otherwise to be signed or executed.

 

5.7               Vice Presidents . Vice Presidents shall have the duties incident to the office of Vice President and any other duties that may from time to time be assigned to the Vice President by the Chief Executive Officer, the President or the Board. A Vice President shall preside at all meetings of the Stockholders at which the Chairman, the Vice Chairman (if there be one), the Chief Executive Officer and the President are not present. Any Vice President may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts or other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by these By-laws to some other officer or agent of the Corporation, or shall be required by applicable law otherwise to be signed or executed.

 

5.8               Secretary . The Secretary shall attend all meetings of the Board and of the Stockholders, record all the proceedings of the meetings of the Board and of the Stockholders in a book to be kept for that purpose and perform like duties for committees of the Board, when required. The Secretary shall give, or cause to be given, notice of all special meetings of the Board and of the Stockholders and perform such other duties as may be prescribed by the Board, the Chief Executive Officer or the President. The Secretary shall have custody of the corporate seal of the Corporation and the Secretary or an Assistant Secretary shall have authority to affix the same on any instrument that may require it, and when so affixed, the seal may be attested by the signature of the Secretary or by the signature of such Assistant Secretary. The Board may give general authority to any other officer to affix the seal of the Corporation and to attest the same by such officer’s signature. The Secretary or an Assistant Secretary may also attest all instruments signed by the Executive Chairman, Chief Executive Officer, President or any Vice President. The Secretary shall have charge of all the books, records and papers of the Corporation relating to its organization and management, see that the reports, statements and other documents required by applicable law are properly kept and filed and, in general, perform all duties incident to the office of secretary of a corporation and such other duties as may from time to time be assigned to the Secretary by the Board, the Chief Executive Officer or the President.

 

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5.9               Treasurer . The Treasurer shall have charge and custody of, and be responsible for, all funds, securities and notes of the Corporation, receive and give receipts for moneys due and payable to the Corporation from any sources whatsoever; deposit all such moneys and valuable effects in the name and to the credit of the Corporation in such depositaries as may be designated by the Board, against proper vouchers, cause such funds to be disbursed by checks or drafts on the authorized depositaries of the Corporation signed in such manner as shall be determined by the Board and be responsible for the accuracy of the amounts of all moneys so disbursed, regularly enter or cause to be entered in books or other records maintained for the purpose full and adequate account of all moneys received or paid for the account of the Corporation, have the right to require from time to time reports or statements giving such information as the Treasurer may desire with respect to any and all financial transactions of the Corporation from the officers or agents transacting the same, render to the Chief Executive Officer, the President or the Board, whenever the Chief Executive Officer, the President or the Board shall require the Treasurer so to do, an account of the financial condition of the Corporation and of all financial transactions of the Corporation, disburse the funds of the Corporation as ordered by the Board and, in general, perform all duties incident to the office of Treasurer of a corporation and such other duties as may from time to time be assigned to the Treasurer by the Board, the Chief Executive Officer or the President.

 

5.10           Assistant Secretaries and Assistant Treasurers . Assistant Secretaries and Assistant Treasurers shall perform such duties as shall be assigned to them by the Secretary or by the Treasurer, respectively, or by the Board, the Chief Executive Officer or the President.

 

5.11           Chairman and Vice Chairman Titles . If the Board so elects, it may use the title “Chair,” “Chairperson” or “Chairwoman” instead of “Chairman,” and references to the “Chairman” herein shall be deemed to be references to such “Chair,” “Chairperson” or “Chairwoman.” If the Board so elects, it may also use the title “Vice-Chair,” “Vice-Chairperson” or “Vice-Chairwoman” instead of “Vice-Chairman,” and references to such “Vice-Chairman” herein shall be deemed to be references to such “Vice-Chair,” “Vice-Chairperson” or “Vice-Chairwoman.”

 

ARTICLE 6

 

GENERAL PROVISIONS

 

6.1               Certificates Representing Shares . The shares of stock of the Corporation shall be represented by certificates or all of such shares shall be uncertificated shares that may be evidenced by a book-entry system maintained by the registrar of such stock, or a combination of both. If shares are represented by certificates (if any) such certificates shall be in the form approved by the Board. The certificates representing shares of stock of each class shall be signed by, or in the name of, the Corporation by the Chairman, the Chief Executive Officer, the President or any Vice President, and by the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer. Any or all such signatures may be facsimiles. Although any officer, transfer agent or registrar whose manual or facsimile signature is affixed to such a certificate ceases to be such officer, transfer agent or registrar before such certificate has been issued, it may nevertheless be issued by the Corporation with the same effect as if such officer, transfer agent or registrar were still such at the date of its issue.

 

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6.2               Transfer and Registry Agents . The Corporation may from time to time maintain one or more transfer offices or agents and registry offices or agents at such place or places as may be determined from time to time by the Board.

 

6.3               Lost, Stolen or Destroyed Certificates . The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate or his legal representative to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

 

6.4               Form of Records . Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account and minute books, may be maintained on any information storage device or method; provided that the records so kept can be converted into clearly legible paper form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect such records pursuant to applicable law.

 

6.5               Seal . The corporate seal shall have the name of the Corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced.

 

6.6               Fiscal Year . The fiscal year of the Corporation shall be determined by the Board.

 

6.7               Amendments . These By-laws may be altered, amended or repealed in accordance with the Certificate of Incorporation and the General Corporation Law.

 

6.8               Conflict with Applicable Law or Certificate of Incorporation . These By-laws are adopted subject to any applicable law and the Certificate of Incorporation. Whenever these By-laws may conflict with any applicable law or the Certificate of Incorporation, such conflict shall be resolved in favor of such law or the Certificate of Incorporation.

 

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Exhibit 10.1

 

 

 

 

 

REORGANIZATION AGREEMENT

 




Dated as of July 29, 2015

 

 

 

 

 

 
 

TABLE OF CONTENTS

 

Pages

 

Article I DEFINITIONS 1
1.1    Certain Defined Terms 1
1.2    Terms Defined Elsewhere in this Agreement 3
1.3    Other Definitional and Interpretative Provisions 3
Article II THE REORGANIZATION 4
2.1    Reorganization Transactions 4
2.2    Other Transactions 6
2.3    Consent to Transactions 7
2.4    No Liabilities in Event of Termination; Certain Covenants 7
Article III REPRESENTATIONS AND WARRANTIES 8
3.1    Representations and Warranties 8
Article IV MISCELLANEOUS 9
4.1   Amendments and Waivers 9
4.2   Successors and Assigns 9
4.3    Notices 9
4.4   Further Assurances 10
4.5    Entire Agreement 10
4.6    Governing Law 11
4.7    Jurisdiction 11
4.8    WAIVER OF JURY TRIAL 11
4.9    Severability 11
4.10    Enforcement 11
4.11    Counterparts; Facsimile Signatures 11
4.12    Expenses 11

 

Schedules  

Schedule 1        -           Contributed Assets 

Schedule 2        -           Employee Benefit Plans of vTvx I and vTvx II

 

i
 

REORGANIZATION AGREEMENT

 

THIS REORGANIZATION AGREEMENT (this “ Agreement ”), dated as of July 29, 2015, by and among vTv Therapeutics Inc., a Delaware corporation (“ Pubco ”), vTv Therapeutics LLC, a Delaware limited liability company (the “ Company ”), vTvx Holdings I LLC, a Delaware limited liability company (“ vTvx I ”), vTvx Holdings II LLC, a Delaware limited liability company (“ vTvx II ”), and vTv Therapeutics Holdings LLC, a Delaware limited liability company (“ Holdings ”).

 

RECITALS

 

WHEREAS, the Board of Directors of Pubco (the “ Board ”) has determined to effect an underwritten initial public offering (the “ IPO ”) of Pubco’s Class A Common Stock (as defined below);

 

WHEREAS, the parties hereto desire to effect the Transactions (as defined below), including the Reorganization Transactions (as defined below), in contemplation of the IPO; and

 

WHEREAS, in connection with the IPO, the applicable parties hereto intend to enter into the Transactions.

 

NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual promises hereinafter set forth, the parties hereto hereby agree as follows:

 

Article I

 

DEFINITIONS

 

1.1               Certain Defined Terms . As used herein, the following terms shall have the following meanings:

 

Business Day ” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by applicable law to close.

 

Class A Common Stock ” shall mean Class A Common Stock, par value $0.01 per share, of Pubco, having the rights set forth in the Amended and Restated Certificate of Incorporation.

 

Class B Common Stock ” shall mean Class B Common Stock, par value $0.01 per share, of Pubco, having the rights set forth in the Amended and Restated Certificate of Incorporation.

 

Class M Common Unit ” shall mean the Class M Common Unit of the Company, having the rights set forth in the Amended and Restated Company LLC Agreement.

 

 
 

Effective Time ” means the date and time on which the Registration Statement becomes effective.

 

Exchange Act ” means the Securities Exchange Act of 1934, as amended.

 

Existing Certificate of Incorporation ” means the Certificate of Incorporation of Pubco, as filed with the Secretary of State of the State of Delaware on April 2, 2015.

 

Existing Company LLC Agreement ” means the Operating Agreement of the Company, dated as of April 15, 2015, by Holdings as the sole member.

 

IPO Closing ” means the initial closing of the sale of the Class A Common Stock in the IPO.

 

IPO Price Per Share ” means the per share public offering price for the Class A Common Stock.

 

Nonvoting Common Units ” shall mean Nonvoting Common Units of the Company, having the rights set forth in the Amended and Restated Company LLC Agreement.

 

Person ” means any individual, firm, corporation, partnership, limited liability company, trust, estate, joint venture, governmental authority or other entity.

 

Pricing ” means such date and time as the Board or the pricing committee thereof determines to price the IPO.

 

Registration Statement ” means the registration statement on Form S-1 (File No. 333-204951) filed by Pubco under the Securities Act with the SEC to register the IPO.

 

Reorganization Documents ” means the Amended and Restated Certificate of Incorporation, the Amended and Restated By-laws, the Amended and Restated Company LLC Agreement, the Exchange Agreement, the Investor Rights Agreement, the Tax Receivable Agreement, the 2015 Omnibus Incentive Plan and all other agreements and documents entered into in connection with the Transactions.

 

SEC ” means the Securities and Exchange Commission.

 

Securities Act ” means the Securities Act of 1933, as amended.

 

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1.2               Terms Defined Elsewhere in this Agreement (a). Each of the following terms is defined in the Section set forth opposite such term:

 

Term Section
2015 Omnibus Incentive Plan 2.2(d)
Agreement Preamble
Amended and Restated Certificate of Incorporation 2.1(a)
Amended and Restated Company LLC Agreement 2.1(c)
Board Recitals
Company Preamble
Contributed Assets 2.1(d)(i)
e-mail 4.3
Employee Transfer 2.1(d)(ii)
Exchange Agreement 2.2(a)
Holdings Preamble
Holdings Membership Interests 2.1(d)(iii)
Investor Rights Agreement 2.2(b)
IPO Recitals
Proceeds 2.2(f)
Pubco Preamble
Reorganization Transaction 2.1
Reorganization Transactions 2.1
Tax Receivable Agreement 2.2(c)
Transaction 2.2
Transactions 2.2
vTvx I Preamble
vTvx II Preamble

 

1.3               Other Definitional and Interpretative Provisions . The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections, and Schedules are to Articles, Sections, and Schedules of this Agreement unless otherwise specified. All Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. The Reorganization Documents referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.

 

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Article II

 

THE REORGANIZATION

 

2.1               Reorganization Transactions . Subject to the terms and conditions hereinafter set forth, and on the basis of and in reliance upon the representations, warranties, covenants and agreements set forth herein, the parties hereto shall take the actions described in this Section 2.1 (each, a “ Reorganization Transaction ” and, collectively, the “ Reorganization Transactions ”), which shall be effective as of immediately after the Effective Time:

 

(a)                 Filing of Amended and Restated Certificate of Incorporation . Pubco shall adopt and file with the Secretary of State of the State of Delaware an amended and restated certificate of incorporation of Pubco, substantially in the form filed as Exhibit 3.1 to the Registration Statement (the “ Amended and Restated Certificate of Incorporation ”).

 

(b)                Adoption of Amended and Restated By-laws . The Board shall adopt amended and restated by-laws of Pubco, substantially in the form filed as Exhibit 3.2 to the Registration Statement (the “ Amended and Restated By-laws ”).

 

(c)                 Adoption of Amended and Restated Company LLC Agreement . The Company shall adopt the amended and restated limited liability company agreement of the Company, substantially in the form filed as Exhibit 10.3 to the Registration Statement (the “ Amended and Restated Company LLC Agreement ”).

 

(d)                Contribution of Contributed Assets and Employee Transfer . Immediately following the Reorganization Transactions described in Sections 2.1(a) through (c) :

 

(i)                  vTvx I and vTvx II hereby contribute, assign, transfer and convey to Holdings all of the respective right, title, interest and obligations of vTvx I and vTvx II in their respective tangible and intangible assets set forth on Schedule 1 hereof, free and clear of all liens (other than those liens to be released pursuant to Section 2.2(e)), including all goodwill related to such assets and all goodwill of the businesses of vTvx I and vTvx II (such contributed assets, the “ Contributed Assets ”).

 

(ii)                vTvx I and vTvx II hereby assign and transfer to Holdings the employment of all employees of vTvx I and vTvx II and (A) all employment-related rights and obligations, including each employment agreement between vTvx I or vTvx II, on the one hand, and each employee thereof, on the other hand, (B) noncompetition, nonsolicitation and nondisclosure agreements with respect to the employees and former employees of vTvx I and vTvx II and (C) all employee benefit plans set forth on Schedule 1 hereof (collectively, the “ Employee Transfer ”).

 

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(iii)              In consideration for the Contributed Assets and the Employee Transfer, Holdings hereby issues 95 of its membership interests (“ Holdings Membership Interests ”) to vTvx I and 5 Holdings Membership Interests to vTvx II.

 

(iv)              Holdings hereby acknowledges its right to receive the Contributed Assets from vTvx I and vTvx II and, for administrative convenience, hereby irrevocably directs vTvx I and vTvx II to contribute, assign, transfer and convey the Contributed Assets directly to the Company for and on behalf of Holdings in lieu of the Contributed Assets being contributed, assigned, transferred and conveyed to Holdings.

 

(v)                Holdings acknowledges its rights to receive the Employee Transfer from vTvx I and vTvx II and, for administrative convenience, hereby irrevocably directs vTvx I and vTvx II to contribute, assign, transfer and convey the Employee Transfer directly to the Company for and on behalf of Holdings in lieu of the Employee Transfer being contributed, assigned, transferred and conveyed to Holdings.  vTvx I, vTvx II and the Company acknowledge and agree that if the Company determines that in connection with the Employee Transfer, a transition service period not to exceed four months is necessary or desirable, then such employees shall be permitted to continue their participation in the employee benefit plans of vTvx I and vTvx II as set forth on Schedule 2 during such period and the Company, vTvx I and vTvx II will enter into a customary transition services agreement.

 

(vi)              The Company hereby accepts and acquires the Contributed Assets and the Employee Transfer and all of the respective right, title, interest and obligations of vTvx I and vTvx II in the Contributed Assets and the Employee Transfer. In consideration for its receipt of the Contributed Assets and the Employee Transfer, the Company hereby: (A) issues (x) to Holdings 25,000,000 Nonvoting Common Units and (B) to Pubco, a wholly owned subsidiary of Holdings, one Class M Common Unit; (B) assumes all liabilities of vTvx I and vTvx II with respect to the Contributed Assets and the Employee Transfer; (C) covenants and agrees to discharge, perform and comply with and to be bound by all the terms, conditions, provisions, obligations, covenants and duties of vTvx I and vTvx II under all contracts and agreements included in the Contributed Assets and the Employee Transfer as if the Company were an original party thereto; and (D) agrees to indemnify and hold harmless vTvx I and vTvx II for any and all liabilities of vTvx I or vTvx II, known or unknown, that currently exist or may arise in the future with respect to the Contributed Assets and the Employee Transfer.

 

5
 

(e)                 Issuance of Class B Common Stock to Holdings . In connection with the filing of the Amended and Restated Certificate of Incorporation, Pubco hereby issues to Holdings 25,000,000 shares of Class B Common Stock and all of the issued and outstanding common stock of Pubco held by MacAndrews & Forbes Incorporated pursuant to the Existing Certificate of Incorporation shall be cancelled.

 

2.2               Other Transactions . In connection with the Reorganization Transactions set forth above, the parties hereto shall, in connection therewith, take the following actions described in this Section 2.2 (together with the Reorganization Transactions, the “ Transactions ” and each a “ Transaction ”):

 

(a)                 Exchange Agreement . In connection with the issuance of Class B Common Stock and Nonvoting Common Units to Holdings as provided in Section 2.1, Holdings, the Company and Pubco hereby enter into that certain Exchange Agreement, substantially in the form filed as Exhibit 10.4 to the Registration Statement (the “ Exchange Agreement ”).

 

(b)                Investor Rights Agreement . In connection with the issuance of Class B Common Stock and Nonvoting Common Units to Holdings as provided in Section 2.1, Holdings, Pubco, and the Company shall enter into an Investor Rights Agreement, substantially in the form filed as Exhibit 10.2 to the Registration Statement (the “ Investor Rights Agreement ”).

 

(c)                 Tax Receivable Agreement . In connection with the issuance of Class B Common Stock and Nonvoting Common Units to Holdings as provided in Section 2.1, Pubco and Holdings shall enter into a Tax Receivable Agreement, substantially in the form filed as Exhibit 10.5 to the Registration Statement (the “ Tax Receivable Agreement ”).

 

(d)                2015 Omnibus Incentive Plan . Pubco hereby enters into the 2015 Omnibus Equity Incentive Plan, substantially in the form filed as Exhibit 10.11 to the Registration Statement (the “ 2015 Omnibus Incentive Plan ”).

 

(e)                 Intellectual Property Assignment Agreements and Lien Releases . Following the date hereof, vTvx I, vTvx II and the Company shall take all such steps and actions, and provide such cooperation and assistance to each such party and its respective successors, assigns and legal representatives, including the execution and delivery of any affidavits, declarations, oaths, exhibits, assignments, agreements, lien releases, powers of attorney, or other documents, as may be necessary to (i) release and terminate any and all liens and security interests filed against the patents, trademarks, copyrights, domain names (and any registrations or applications thereof) and any other intellectual property that is a Contributed Asset, or (ii) effect, evidence or perfect the transfer and assignment of the patents, trademarks, copyrights, domain names (and any registrations or applications thereof) and any other intellectual property that is a Contributed Asset from each of vTvx I and vTvx II to the Company or any assignee or successor thereto, including by executing and filing short-form intellectual property lien releases and/or short-form intellectual property assignment agreements in the United States Patent and Trademark Office, the United States Copyright Office and any applicable foreign intellectual property or equivalent office.

 

6
 

(f)                 Issuance of Nonvoting Common Units to Pubco . Immediately following the IPO Closing, Pubco shall use the net proceeds (after payment of all fees and expenses in connection with the IPO) from the IPO (the “ Proceeds ”) to purchase from the Company a number of Nonvoting Common Units equal to the number of shares of Class A Common Stock issued in the IPO. Upon receipt of the Proceeds from Pubco, the Company shall issue to Pubco the number of Nonvoting Common Units set forth in the immediately preceding sentence.

 

2.3               Consent to Transactions .

 

(a)                 Each of the parties hereto hereby acknowledges, agrees and consents to all of the Transactions. Each of the parties hereto shall take all reasonable action necessary or appropriate in order to effect, or cause to be effected, to the extent within its control, each of the Transactions and the IPO.

 

(b)                The parties hereto shall deliver to each other, as applicable, prior to or at the Effective Time, each of the Reorganization Documents to which it is a party, together with any other documents and instruments necessary or appropriate to be delivered in connection with the Transactions.

 

2.4               No Liabilities in Event of Termination; Certain Covenants .

 

(a)                 In the event that the IPO is abandoned or, unless the Board, the Company and Holdings otherwise agree, the IPO Closing has not occurred by September 30, 2015, (a) this Agreement shall automatically terminate and be of no further force or effect except for this Section 2.4 and Sections 4.1, 4.2, 4.3, 4.6, 4.7, 4.8, 4.9, 4.10, 4.11 and 4.12 and (b) there shall be no liability on the part of any of the parties hereto, except that such termination shall not preclude any party from pursuing judicial remedies for damages and/or other relief as a result of the breach by the other parties of any representation, warranty, covenant or agreement contained herein prior to such termination.

 

(b)                In the event that this Agreement is terminated for any reason after the consummation of any Transaction, but prior to the consummation of all of the Transactions, the parties agree, as applicable, to cooperate and work in good faith to execute and deliver such agreements and consents and amend such documents and to effect such transactions or actions as may be necessary to re-establish the rights, preferences and privileges that the parties hereto had prior to the consummation of the Transactions, or any part thereof, including, without limitation, voting any and all securities owned by such party in favor of any amendment to any organizational document and in favor of any transaction or action necessary to re-establish such rights, powers and privileges and causing to be filed all necessary documents with any governmental authority necessary to reestablish such rights, preferences and privileges.

 

7
 

(c)                 For the avoidance of doubt, each party hereto acknowledges and agrees that until the consummation of the Transactions: (i) the parties hereto shall not receive or lose any voting, governance or similar rights in connection with this Agreement or the Transactions and (ii) the rights of the parties hereto under the Existing Company LLC Agreement shall not be effected.

 

Article III

 

REPRESENTATIONS AND WARRANTIES

 

3.1               Representations and Warranties . Each party hereto hereby represents and warrants to all of the other parties hereto as follows:

 

(a)                 The execution, delivery and performance by such party of this Agreement and of the applicable Reorganization Documents, to the extent a party thereto, has been or prior to the Effective Time will be duly authorized by all necessary action. If such party is not an individual, such party is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization or incorporation;

 

(b)                Such party has or prior to the Effective Time will have the requisite power, authority, legal right and, if such party is an individual, legal capacity, to execute and deliver this Agreement and each of the Reorganization Documents, to the extent a party thereto, and to consummate the transactions contemplated hereby and thereby, as the case may be;

 

(c)                 This Agreement and each of the Reorganization Documents to which it is a party has been (or when executed will be) duly executed and delivered by such party and constitutes the legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law) and (iii) an implied covenant of good faith and fair dealing; and

 

(d)                Neither the execution, delivery and performance by such party of this Agreement and the applicable Reorganization Documents, to the extent a party thereto, nor the consummation by such party of the transactions contemplated hereby, nor compliance by such party with the terms and provisions hereof, will, directly or indirectly (with or without notice or lapse of time or both), (i) if such party is not an individual, contravene or conflict with, or result in a breach or termination of, or constitute a default under (or with notice or lapse of time or both, result in the breach or termination of or constitute a default under) the organizational documents of such party, (ii) constitute a violation by such party of any existing requirement of law applicable to such party or any of its properties, rights or assets or (iii) require the consent or approval of any Person, except, in the case of clauses (ii) and (iii), as would not reasonably be expected to result in, individually or in the aggregate, a material adverse effect on the ability of such party to consummate the transactions contemplated by this Agreement.

 

8
 

Article IV

 

MISCELLANEOUS

 

4.1               Amendments and Waivers . This Agreement may be modified, amended or waived only with the written approval of Pubco, the Company, and Holdings; provided , however , that any modification, amendment or waiver that would affect any other party hereto in a manner materially and disproportionately adverse to such party shall be effective against such party so materially and adversely affected only with the prior written consent of such party, such consent not to be unreasonably withheld or delayed. The failure of any party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms. Notwithstanding anything to the contrary in this Section 4.1, nothing in this Section 4.1 shall be deemed to contradict the provisions of Section 2.4 hereof.

 

4.2               Successors and Assigns . This Agreement shall bind and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. If and to the extent Holdings is dissolved or liquidated, MacAndrews & Forbes Incorporated and M&F TTP Holdings LLC and each of their respective affiliates (other than Pubco and its subsidiaries) holding shares of Pubco shall be the successors of Holdings, and references to “Holdings” herein shall be references to such successors of Holdings, collectively, and the Pubco shall (and shall cause its subsidiaries to) enter into such amendments and supplements hereto to effectuate the intent of this Section 4.2.

 

4.3               Notices . All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission and electronic mail (“ e-mail ”) transmission, so long as a receipt of such e-mail is requested and not received by automated response). All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. on a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed to have been received on the next succeeding Business Day in the place of receipt. All such notices, requests and other communications to any party hereunder shall be given to such party as follows:

 

If to Pubco or the Company addressed to it at:

Stephen L. Holcombe, President and CEO 

4170 Mendenhall Oaks Parkway 

High Point, NC 27265 

Facsimile: (336) 841-0310 

E-mail:  sholcombe@vtvtherapeutics.com

 

9
 

With copies (which shall not constitute notice) to:

Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019-6064
Facsimile No.: (212) 757-3990
Attention:  Angelo Bonvino 

                  Lawrence G. Wee
E-mail:      abonvino@paulweiss.com 

                  lwee@paulweiss.com

 

If to Holdings, vTvx I or vTvx II addressed to it at:

 

c/o MacAndrews & Forbes Incorporated 

35 East 62nd Street 

New York, NY 10065 

Attention: Paul G. Savas 

Facsimile: (212) 572-5695

 

With copies (which shall not constitute notice) to:

Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019-6064
Facsimile No.: (212) 757-3990
Attention:  Angelo Bonvino 

                  Lawrence G. Wee
E-mail:      abonvino@paulweiss.com 

                  lwee@paulweiss.com

 

4.4               Further Assurances . At any time or from time to time after the date hereof, the parties agree to cooperate with each other, and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated hereby and to otherwise carry out the intent of the parties hereunder.

 

4.5               Entire Agreement . Except as otherwise expressly set forth herein, this Agreement, together with the Reorganization Documents, embodies the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written or oral, that may have related to the subject matter hereof in any way.

 

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4.6               Governing Law . This Agreement shall be governed in all respects by the laws of the State of Delaware, without regard to the conflicts of law rules of such State that would result in the application of the laws of any other State.

 

4.7               Jurisdiction . The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby (whether brought by any party or any of its affiliates or against any party or any of its affiliates) shall be brought in the Delaware Chancery Court or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 4.3 shall be deemed effective service of process on such party.

 

4.8               WAIVER OF JURY TRIAL . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

4.9               Severability . Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

 

4.10            Enforcement . Each party hereto acknowledges that money damages would not be an adequate remedy in the event that any of the covenants or agreements in this Agreement are not performed in accordance with its terms, and it is therefore agreed that in addition to and without limiting any other remedy or right it may have, the non-breaching party will have the right to an injunction, temporary restraining order or other equitable relief in any court of competent jurisdiction enjoining any such breach and enforcing specifically the terms and provisions hereof.

 

4.11            Counterparts; Facsimile Signatures . This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. This Agreement may be executed by facsimile, e-mail or .pdf format signature(s).

 

4.12            Expenses . Unless otherwise provided in the Reorganization Documents, all costs and expenses incurred in connection with the negotiation and execution of this Agreement and the transactions contemplated by this Agreement shall be paid by the party incurring such cost or expense.

 

[ Signature Page Follows ]

 

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

 

  VTV THERAPEUTICS INC.
       
  By: /s/ Stephen L. Holcombe
    Name: Stephen L. Holcombe
    Title: President and Chief Executive Officer
       
       
  VTV THERAPEUTICS LLC
       
  By: /s/ Stephen L. Holcombe
    Name: Stephen L. Holcombe
    Title: President and Chief Executive Officer
       
       
  VTV THERAPEUTICS HOLDINGS LLC
       
  By: /s/ Stephen L. Holcombe
    Name: Stephen L. Holcombe
    Title: President
       
       
  VTVX HOLDINGS I LLC
       
  By: /s/ Stephen L. Holcombe
    Name: Stephen L. Holcombe
    Title: President
       
       
  VTVX HOLDINGS II LLC
       
  By: /s/ Stephen L. Holcombe
    Name: Stephen L. Holcombe
    Title: President

 

[Signature Page to the Reorganization Agreement]

 

 
 

Schedule 1

 

Contributed Assets

 

(See attached.)

 

 
 

Schedule 1

 

Contributed Assets

 

Assets Transferred from vTvx Holdings I LLC

 

INDs and Similar Assets :

 

Program Compound IND / File # Holder
GK TTP355 CTA 9727-T1006-24C vTvx Holdings I LLC
GK TTP399 IND 78,649 vTvx Holdings I LLC
GK TTP547 IND 101,790 vTvx Holdings I LLC
GLP TTP054 IND 107,972; and CTA 9727-T1006-25C vTvx Holdings I LLC
GLP TTP273 IND 115,859 vTvx Holdings I LLC
RAGE TTP488 IND 68,445; and CTA 9427-T1538-21C vTvx Holdings I LLC
PTP1B TTP814 CTA 9427-T1006-23C vTvx Holdings I LLC
RAGE TTP4000 IND 108,330 vTvx Holdings I LLC
Factor IX TTP889 IND 62,132; and IND 101,833 vTvx Holdings I LLC
AgRP TTP435 IND 103,677; and CTA 9427-T1006-24C vTvx Holdings I LLC

 

Trademarks :

 

Trademark Applicant Application No. Status
TTPREDICT vTvx Holdings I LLC 76/406,330 Registered
TTP TRANSLATIONAL TECHNOLOGY vTvx Holdings I LLC 76/406,371 Registered
TTPSPACE vTvx Holdings I LLC 76/406,372 Registered
TTPOSTGENE vTvx Holdings I LLC 76/406,409 Registered
TTPSCREEN vTvx Holdings I LLC 76/406,412 Registered

 

Copyrights :

 

Author Title Copyright Year Registration Number Owner
Sawafta et al. TTPScreen Software Program 2002 TXU1-052-385 vTvx Holdings I LLC
Sawafta et al. TTPredict Software Program 2002 TXU1-040-852 vTvx Holdings I LLC

 

 
 

 

Domain Names :

 

Owner Domain Name Status
vTvx Holdings I LLC AZELIRAGON.BIZ Registered
vTvx Holdings I LLC AZELIRAGON.COM Registered
vTvx Holdings I LLC AZELIRAGON.INFO Registered
vTvx Holdings I LLC AZELIRAGON.NET Registered
vTvx Holdings I LLC LIVINGSTEADFAST.CO Registered
vTvx Holdings I LLC LIVINGSTEADFAST.COM Registered
vTvx Holdings I LLC LIVINGSTEADFAST.INFO Registered
vTvx Holdings I LLC LIVINGSTEADFAST.NET Registered
vTvx Holdings I LLC LIVINGSTEADFAST.ORG Registered
vTvx Holdings I LLC LIVINGSTEADFAST.US Registered
vTvx Holdings I LLC MYAGATA.COM Registered
vTvx Holdings I LLC MYAGATA.INFO Registered
vTvx Holdings I LLC MYAGATA.NET Registered
vTvx Holdings I LLC MYAGATA.ORG Registered
vTvx Holdings I LLC MYAGATA.US Registered
vTvx Holdings I LLC STEADFASTALZHEIMERS.CO Registered
vTvx Holdings I LLC STEADFASTALZHEIMERS.COM Registered
vTvx Holdings I LLC STEADFASTALZHEIMERS.INFO Registered
vTvx Holdings I LLC STEADFASTALZHEIMERS.NET Registered
vTvx Holdings I LLC STEADFASTALZHEIMERS.ORG Registered
vTvx Holdings I LLC STEADFASTALZHEIMERS.US Registered
vTvx Holdings I LLC TTPREDICT.XXX Registered
vTvx Holdings I LLC TTPSCREEN.XXX Registered
vTvx Holdings I LLC TTPSPACE.XXX Registered
vTvx Holdings I LLC TTPTRANSLATIONALTECHNOLOGY.XXX Registered
vTvx Holdings I LLC VTV.NET Registered
vTvx Holdings I LLC VTVTHERA.COM Registered
vTvx Holdings I LLC VTVTHERA.NET Registered
vTvx Holdings I LLC VTVTHERAPEUTICS.COM Registered
vTvx Holdings I LLC VTVTHERAPEUTICS.NET Registered
vTvx Holdings I LLC VTVT.NET Registered

 

 
 

 

Patents :

 

File No. Country Owner Application No. Patent No.
2001-04-US-B United States vTvx Holdings I LLC 12/901,133  
2002-04-US-A United States vTvx Holdings I LLC 10/411,568 7,146,384
0378.204-AU Australia vTvx Holdings I LLC 2013262895  
0378.204-BR Brazil vTvx Holdings I LLC BR1120140286221  
0378.204-CA Canada vTvx Holdings I LLC 2872021  
0378.204-CN China vTvx Holdings I LLC 201380024802.X  
0378.204-EA Eurasia vTvx Holdings I LLC 201492109  
0378.204-HK Hong Kong vTvx Holdings I LLC 15103235.2  
0378.204-IL Israel vTvx Holdings I LLC 235484  
0378.204-IN India vTvx Holdings I LLC 9554/DELNP/2014  
0378.204-JP Japan vTvx Holdings I LLC 2015-512779  
0378.204-KR South Korea vTvx Holdings I LLC 10-2014-7035545  
0378.204-MX Mexico vTvx Holdings I LLC MX/a/2014/013105  
0378.204-NZ New Zealand vTvx Holdings I LLC 701802  
0378.204-SG Singapore vTvx Holdings I LLC 11201406987U  
0378.204-US United States vTvx Holdings I LLC 14/071,976  
0378.204-ZA South Africa vTvx Holdings I LLC 2014/07864  
0378.205-EP Europe vTvx Holdings I LLC 13726933.8  
0379.204-PCT PCT Application vTvx Holdings I LLC PCT/US2014/019349  
2010-05-AU-A Australia vTvx Holdings I LLC 2011258460 2011258460
2010-05-BR-A Brazil vTvx Holdings I LLC BR1120120298445  
2010-05-CA-A Canada vTvx Holdings I LLC 2799591  
2010-05-CN-A China vTvx Holdings I LLC 201180025744.3 ZL201180025744.3
2010-05-EA-A Eurasia vTvx Holdings I LLC 201201617  
2010-05-EP-A Europe vTvx Holdings I LLC 11787250.7  
2010-05-GCC-A Gulf Cooperation Council vTvx Holdings I LLC GC 2011-18476  
2010-05-HK-A Hong Kong vTvx Holdings I LLC 13108290.5  
2010-05-IL-A Israel vTvx Holdings I LLC 223137  
2010-05-IN-A India vTvx Holdings I LLC 10658/CHENP/2012  
2010-05-JP-A Japan vTvx Holdings I LLC 2013-512164  
2010-05-KR-A South Korea vTvx Holdings I LLC 10-2012-7033687  
2010-05-MX-A Mexico vTvx Holdings I LLC MX/a/2012/013617  
2010-05-NZ-A New Zealand vTvx Holdings I LLC 603614 603614
2010-05-SG-A Singapore vTvx Holdings I LLC 201208508-0 185660
2010-05-TW-A Taiwan vTvx Holdings I LLC 100118368  
2010-05-US-A United States vTvx Holdings I LLC 13/114,964  
2010-05-ZA-A South Africa vTvx Holdings I LLC 2012/08834  
2013-02-PCT PCT Application vTvx Holdings I LLC PCT/US2014/019363  
 
 
File No. Country Owner Application No. Patent No.
6694.214-US United States vTvx Holdings I LLC 12/895,761 8,148,413
6808.205-BG Bulgaria vTvx Holdings I LLC 5700554.8 1723128
6808.205-CY Cyprus vTvx Holdings I LLC 5700554.8 1723128 (CY1113736)
6808.205-EE Estonia vTvx Holdings I LLC 5700554.8 1723128
6808.205-HK Hong Kong vTvx Holdings I LLC 7107531.4 HK1103074
6808.205-IS Iceland vTvx Holdings I LLC 5700554.8 1723128
6808.205-LT Lithuania vTvx Holdings I LLC 5700554.8 1723128
6808.205-LU Luxembourg vTvx Holdings I LLC 5700554.8 1723128
6808.205-MC Monaco vTvx Holdings I LLC 5700554.8 1723128
6808.205-RO Romania vTvx Holdings I LLC 5700554.8 1723128
6808.205-SI Slovenia vTvx Holdings I LLC 5700554.8 1723128
6808.205-SK Slovakia vTvx Holdings I LLC 5700554.8 1723128 (E13998 T3)
6937.204-MX Mexico vTvx Holdings I LLC MX/a/2007/006420 303022
6937.204-US United States vTvx Holdings I LLC 11/791,200 8,148,412
7112.204-AU Australia vTvx Holdings I LLC 2006268589 2006268589
7112.204-BR Brazil vTvx Holdings I LLC PI0612996-0  
7112.204-CA Canada vTvx Holdings I LLC 2615938 2,615,938
7112.204-CN China vTvx Holdings I LLC 200680033512.1 ZL200680033512.1
7112.204-IL Israel vTvx Holdings I LLC 188244 188244
7112.204-IN India vTvx Holdings I LLC 10025/DELNP/2007  
7112.204-KR South Korea vTvx Holdings I LLC 10-2008-7002805 10-1446973
7112.204-MX Mexico vTvx Holdings I LLC MX/a/2008/000255 305666
7112.204-RU Russia vTvx Holdings I LLC 2007147046 2443691
7112.204-ZA South Africa vTvx Holdings I LLC 2008/00341 2008/00341
7112.205-HK Hong Kong vTvx Holdings I LLC 8112906 HK1121744
7127.204-US United States vTvx Holdings I LLC 12/298,840 8,211,925
7209.204-US United States vTvx Holdings I LLC 11/994,728 7,582,769
7563.204-AU Australia vTvx Holdings I LLC 2008-204530 2008204530
7563.204-CA Canada vTvx Holdings I LLC 2675111  
7563.204-IL Israel vTvx Holdings I LLC 199615  
7563.204-IN India vTvx Holdings I LLC 4486/DELNP/2009  
2008-03-AU-A Australia vTvx Holdings I LLC 2009221722 2009221722
2008-03-BR-A Brazil vTvx Holdings I LLC PI0910282-5  
2008-03-CA-A Canada vTvx Holdings I LLC 2716664  
2008-03-CN-A China vTvx Holdings I LLC 200980108115.X ZL200980108115.X
2008-03-EA-A Eurasia vTvx Holdings I LLC 201071045 18225
2008-03-EP-A Europe vTvx Holdings I LLC 9718287.7  
2008-03-HK-A Hong Kong vTvx Holdings I LLC 11102525.7  
2008-03-IL-A Israel vTvx Holdings I LLC 207570 207570
2008-03-IN-A India vTvx Holdings I LLC 6085/DELNP/2010  
 
 
File No. Country Owner Application No. Patent No.
2008-03-JP-A Japan vTvx Holdings I LLC 2010-549910 5382952
2008-03-KR-A South Korea vTvx Holdings I LLC 10-2010-7020688  
2008-03-ME-A Montenegro vTvx Holdings I LLC P-2010-143 1018
2008-03-MO-A Macau vTvx Holdings I LLC J/001523  
2008-03-MX-A Mexico vTvx Holdings I LLC MX/a/2010/009752 300256
2008-03-NZ-A New Zealand vTvx Holdings I LLC 587343 587343
2008-03-SG-A Singapore vTvx Holdings I LLC 201006155-4 164144 [WO 2009/111700]
2008-03-US-A United States vTvx Holdings I LLC 12/399,504 7,727,983
2008-03-US-B United States vTvx Holdings I LLC 12/759,010 7,790,714
2008-03-US-C United States vTvx Holdings I LLC 12/849,225 7,906,507
2008-03-US-D United States vTvx Holdings I LLC 12/872,580 8,524,708
2008-03-US-E United States vTvx Holdings I LLC 13/956,578 8,703,766
2008-03-US-F United States vTvx Holdings I LLC 14/197,771 8,933,222
2008-03-US-G United States vTvx Holdings I LLC 14/556,837  
2008-03-ZA-A South Africa vTvx Holdings I LLC 2010/06367 2010/06367
2008-06-US-A United States vTvx Holdings I LLC 12/936,434 8,718,994
2009-01-AU-A Australia vTvx Holdings I LLC 2010232750  
2009-01-BR-A Brazil vTvx Holdings I LLC PI1013579-0  
2009-01-CA-A Canada vTvx Holdings I LLC 2757084  
2009-01-CN-A China vTvx Holdings I LLC 201080015264.4 ZL201080015264.4
2009-01-EA-A Eurasia vTvx Holdings I LLC 201171197  
2009-01-EP-A Europe vTvx Holdings I LLC 10779665.8  
2009-01-HK-A Hong Kong vTvx Holdings I LLC 12104614.4  
2009-01-IL-A Israel vTvx Holdings I LLC 214822  
2009-01-IN-A India vTvx Holdings I LLC 6636/DELNP/2011  
2009-01-JP-A Japan vTvx Holdings I LLC 2012-503599  
2009-01-KR-A South Korea vTvx Holdings I LLC 10-2011-7024153  
2009-01-MO-A Macau vTvx Holdings I LLC J/001320 J/1320
2009-01-MX-A Mexico vTvx Holdings I LLC MX/a/2011/010347 320199
2009-01-SG-A Singapore vTvx Holdings I LLC 201106311-2 174205
2009-01-US-A United States vTvx Holdings I LLC 12/825,631 8,383,644
2009-01-US-B United States vTvx Holdings I LLC 13/707,265 8,987,295
2009-01-US-C United States vTvx Holdings I LLC 14/603,556  
2009-01-ZA-A South Africa vTvx Holdings I LLC 2011/06441  
2011-01-US-A United States vTvx Holdings I LLC 13/934,491  
2012-01-AU-A Australia vTvx Holdings I LLC 2013235167  
2012-01-BR-A Brazil vTvx Holdings I LLC BR1120140227438  
2012-01-CA-A Canada vTvx Holdings I LLC 2868033  
2012-01-CN-A China vTvx Holdings I LLC 201380015508.2  
2012-01-EA-A Eurasia vTvx Holdings I LLC 201491749  
 
 
File No. Country Owner Application No. Patent No.
2012-01-EP-A Europe vTvx Holdings I LLC 13765015.6  
2012-01-HK-A Hong Kong vTvx Holdings I LLC 14112910.6  
2012-01-IL-A Israel vTvx Holdings I LLC 234615  
2012-01-IN-A India vTvx Holdings I LLC 7867/DELNP/2014  
2012-01-JP-A Japan vTvx Holdings I LLC 2015-501876  
2012-01-KR-A South Korea vTvx Holdings I LLC 10-2014-7026362  
2012-01-MX-A Mexico vTvx Holdings I LLC MX/a/2014/010366  
2012-01-NZ-A New Zealand vTvx Holdings I LLC 629203  
2012-01-SG-A Singapore vTvx Holdings I LLC 11201405353V  
2012-01-US-A United States vTvx Holdings I LLC 14/489,890  
2012-01-ZA-A South Africa vTvx Holdings I LLC 2014/06521  
2013-01-AU-A Australia vTvx Holdings I LLC 2014207748  
2013-01-CA-A Canada vTvx Holdings I LLC    
2013-01-NZ-A New Zealand vTvx Holdings I LLC 709129  
2013-01-SG-A Singapore vTvx Holdings I LLC    
2000-02-US-A United States vTvx Holdings I LLC 09/799,152 6,908,741
2001-21-US-A United States vTvx Holdings I LLC 10/091,759 7,423,177
2002-01-AT-A Austria vTvx Holdings I LLC 3713918.5 1482931 (E529110)
2002-01-AU-A Australia vTvx Holdings I LLC 2003217943 2003217943
2002-01-AU-B Australia vTvx Holdings I LLC 2007202350 2007202350
2002-01-AU-C Australia vTvx Holdings I LLC 2009202814 2009202814
2002-01-BE-A Belgium vTvx Holdings I LLC 3713918.5 1482931
2002-01-CA-A Canada vTvx Holdings I LLC 2476594 2,476,594
2002-01-CH-A Switzerland vTvx Holdings I LLC 3713918.5 1482931
2002-01-CN-A China vTvx Holdings I LLC 3805204 ZL 03805204.0
2002-01-DE-A Germany vTvx Holdings I LLC 3713918.5 1482931 (60338810.8)
2002-01-DK-A Denmark vTvx Holdings I LLC 3713918.5 1482931 (DK/EP1482931)
2002-01-EP-A Europe vTvx Holdings I LLC 3713918.5 1482931
2002-01-ES-A Spain vTvx Holdings I LLC 3713918.5 1482931 (2373875)
2002-01-FR-A France vTvx Holdings I LLC 3713918.5 1482931
2002-01-GB-A United Kingdom vTvx Holdings I LLC 3713918.5 1482931
2002-01-HK-A Hong Kong vTvx Holdings I LLC 5103177.4 HK1069549
2002-01-IE-A Ireland vTvx Holdings I LLC 3713918.5 1482931
2002-01-IT-A Italy vTvx Holdings I LLC 3713918.5 1482931 (47615 BE/2012)
2002-01-JP-A Japan vTvx Holdings I LLC 2003-574195 4481011
2002-01-LU-A Luxembourg vTvx Holdings I LLC 3713918.5 1482931
2002-01-MC-A Monaco vTvx Holdings I LLC 3713918.5 1482931
2002-01-MO-A Macau vTvx Holdings I LLC J/000383 J/000383
2002-01-NL-A Netherlands vTvx Holdings I LLC 3713918.5 1482931
 
 
File No. Country Owner Application No. Patent No.
2002-01-SE-A Sweden vTvx Holdings I LLC 3713918.5 1482931
2002-01-US-A United States vTvx Holdings I LLC 10/382,203 7,361,678
2002-01-US-B United States vTvx Holdings I LLC 11/511,163 7,714,013
2002-01-US-C United States vTvx Holdings I LLC 11/800,085 7,737,285
2007-01-CA-A Canada vTvx Holdings I LLC 2681864  
2007-01-US-A United States vTvx Holdings I LLC 12/046,872 7,884,219
2007-01-US-B United States vTvx Holdings I LLC 12/982,775 8,372,988
2009-03-CA-A Canada vTvx Holdings I LLC 2772797  
2009-03-CH-A Switzerland vTvx Holdings I LLC 10757925.2 2470510
2009-03-DE-A Germany vTvx Holdings I LLC 10757925.2 2470510 (602010016110.2)
2009-03-EP-A Europe vTvx Holdings I LLC 10757925.2 2470510
2009-03-ES-A Spain vTvx Holdings I LLC 10757925.2 2470510
2009-03-FR-A France vTvx Holdings I LLC 10757925.2 2470510
2009-03-GB-A United Kingdom vTvx Holdings I LLC 10757925.2 2470510
2009-03-IE-A Ireland vTvx Holdings I LLC 10757925.2 2470510
2009-03-IT-A Italy vTvx Holdings I LLC 10757925.2 2470510 (69561 BE/2014)
2009-03-JP-A Japan vTvx Holdings I LLC 2012-532199  
2009-03-TW-A Taiwan vTvx Holdings I LLC 99132288  
2009-03-US-A United States vTvx Holdings I LLC 12/888,660 8,580,833
2009-03-US-B United States vTvx Holdings I LLC 14/049,261  
2010-01-CA-A Canada vTvx Holdings I LLC 2788355  
2010-01-CH-A Switzerland vTvx Holdings I LLC 11745116.1  
2010-01-DE-A Germany vTvx Holdings I LLC 11745116.1  
2010-01-EP-A Europe vTvx Holdings I LLC 11745116.1  
2010-01-ES-A Spain vTvx Holdings I LLC 11745116.1  
2010-01-FR-A France vTvx Holdings I LLC 11745116.1  
2010-01-GB-A United Kingdom vTvx Holdings I LLC 11745116.1  
2010-01-IE-A Ireland vTvx Holdings I LLC 11745116.1  
2010-01-IT-A Italy vTvx Holdings I LLC 11745116.1  
2010-01-JP-A Japan vTvx Holdings I LLC 2012-553968  
2010-01-TW-A Taiwan vTvx Holdings I LLC 100104976  
2010-01-US-A United States vTvx Holdings I LLC 13/028,036 8,431,575
2010-01-US-B United States vTvx Holdings I LLC 13/772,685 8,741,900
2010-01-US-C United States vTvx Holdings I LLC 14/225,837 9,045,461
2012-02-AU-A Australia vTvx Holdings I LLC 2013327450  
2012-02-BR-A Brazil vTvx Holdings I LLC BR1120150076416  
2012-02-CA-A Canada vTvx Holdings I LLC 2886785  
2012-02-CN-A China vTvx Holdings I LLC 201380051206  
2012-02-EA-A Eurasia vTvx Holdings I LLC 201590687  
 
 
File No. Country Owner Application No. Patent No.
2012-02-EP-A Europe vTvx Holdings I LLC    
2012-02-IL-A Israel vTvx Holdings I LLC 237730  
2012-02-IN-A India vTvx Holdings I LLC 3734/DELNP/2015  
2012-02-JP-A Japan vTvx Holdings I LLC    
2012-02-KR-A South Korea vTvx Holdings I LLC 10-2015-7011366  
2012-02-MX-A Mexico vTvx Holdings I LLC MX/a/2015/003732  
2012-02-NZ-A New Zealand vTvx Holdings I LLC 705813  
2012-02-SG-A Singapore vTvx Holdings I LLC 11201502210V  
2012-02-US-A United States vTvx Holdings I LLC 14/059,529  
2012-02-ZA-A South Africa vTvx Holdings I LLC 2015/01834  
2004-02-US-A United States vTvx Holdings I LLC 11/110,499 7,820,704
2008-07-US-A United States vTvx Holdings I LLC 12/547,018 8,563,742
2003-08-US-A United States vTvx Holdings I LLC 10/913,216 7,459,472
2003-07-US-A United States vTvx Holdings I LLC 10/913,882 7,501,538
2003-02-US-A United States vTvx Holdings I LLC 10/913,168 7,544,699
2001-14/16-US-A United States vTvx Holdings I LLC 10/274,546 6,933,303
2006-01-AU-A Australia vTvx Holdings I LLC 2007211319 2007211319
2006-01-CA-A Canada vTvx Holdings I LLC 2637024 2,637,024
2006-01-CN-A China vTvx Holdings I LLC 200780003942.3 ZL200780003942.3
2006-01-EA-A Eurasia vTvx Holdings I LLC 200870218 19385
2006-01-EP-A Europe vTvx Holdings I LLC 7763040.8  
2006-01-HK-A Hong Kong vTvx Holdings I LLC 9104978.9 HK1127342
2006-01-IL-A Israel vTvx Holdings I LLC 192557 192557
2006-01-JP-A Japan vTvx Holdings I LLC 2008-553332 5180099
2006-01-MO-A Macau vTvx Holdings I LLC J/000800 J/000800
2006-01-MX-A Mexico vTvx Holdings I LLC MX/a/2008/008929 316963
2006-01-NZ-A New Zealand vTvx Holdings I LLC 569329 569329
2006-01-SG-A Singapore vTvx Holdings I LLC 200804987-6 144278 [WO 2007/089857]
2006-01-US-A United States vTvx Holdings I LLC 11/699,780 7,723,369
2006-01-US-B United States vTvx Holdings I LLC 12/685,178 8,404,731
2006-01-ZA-A South Africa vTvx Holdings I LLC 2008/05648 2008/05648
2004-04-AU-A Australia vTvx Holdings I LLC 2005271452 2005271452
2004-04-CA-A Canada vTvx Holdings I LLC 2570324 2,570,324
2004-04-CH-A Switzerland vTvx Holdings I LLC 5778764 1781700
2004-04-CN-A China vTvx Holdings I LLC 200580025947.7  
2004-04-DE-A Germany vTvx Holdings I LLC 5778764 1781700 (602005043021.0)
2004-04-EA-A Eurasia vTvx Holdings I LLC 200700404 12082
2004-04-EP-A Europe vTvx Holdings I LLC 5778764 1781700
 
 
File No. Country Owner Application No. Patent No.
2004-04-ES-A Spain vTvx Holdings I LLC 5778764 1781700
2004-04-FR-A France vTvx Holdings I LLC 5778764 1781700
2004-04-GB-A United Kingdom vTvx Holdings I LLC 5778764 1781700
2004-04-HK-A Hong Kong vTvx Holdings I LLC 7108801.5  
2004-04-IE-A Ireland vTvx Holdings I LLC 5778764 1781700
2004-04-IL-A Israel vTvx Holdings I LLC 180554 180554
2004-04-IN-A India vTvx Holdings I LLC 0797/DELNP/2007 257473
2004-04-IT-A Italy vTvx Holdings I LLC 5778764 1781700
2004-04-JP-A Japan vTvx Holdings I LLC 2007-524978 5188804
2004-04-KR-A South Korea vTvx Holdings I LLC 10-2007-7005152 10-1323411
2004-04-MX-A Mexico vTvx Holdings I LLC MX/a/2007/001559 293182
2004-04-NZ-A New Zealand vTvx Holdings I LLC 552128 552128
2004-04-SG-A Singapore vTvx Holdings I LLC 200700364-3 129082 [WO 2006/017647]
2004-04-US-A United States vTvx Holdings I LLC 11/197,038 7,901,688
2004-04-US-B United States vTvx Holdings I LLC 11/629,437 7,981,423
2004-04-US-C United States vTvx Holdings I LLC 12/983,604 8,877,192
2004-04-ZA-A South Africa vTvx Holdings I LLC 2007/00643 2007/00643
2004-04-ZA-B South Africa vTvx Holdings I LLC 2009/06459 2009/06459
2006-07-AU-A Australia vTvx Holdings I LLC 2007248784 2007248784
2006-07-CA-A Canada vTvx Holdings I LLC 2651348  
2006-07-EA-A Eurasia vTvx Holdings I LLC 200870502 17291
2006-07-EP-A Europe vTvx Holdings I LLC 7794379.3  
2006-07-JP-A Japan vTvx Holdings I LLC 2009-509615 5558810
2006-07-MX-A Mexico vTvx Holdings I LLC MX/a/2008/013863 307987
2006-07-NZ-A New Zealand vTvx Holdings I LLC 571692 571692
2006-07-US-A United States vTvx Holdings I LLC 11/789,637 7,981,424
2006-07-US-B United States vTvx Holdings I LLC 13/158,748 8,344,120
2006-07-ZA-A South Africa vTvx Holdings I LLC 2008/09394 2008/09394
2009-04-CA-A Canada vTvx Holdings I LLC 2757079 2,757,079
2009-04-EP-A Europe vTvx Holdings I LLC 10718284.2  
2009-04-JP-A Japan vTvx Holdings I LLC 2010-95600  
2009-04-US-A United States vTvx Holdings I LLC 13/265,132 9,034,341
2009-04-US-B United States vTvx Holdings I LLC 14/686,352  
2010-02-CA-A Canada vTvx Holdings I LLC 2789244  
2010-02-EP-A Europe vTvx Holdings I LLC 10773766  
2010-02-JP-A Japan vTvx Holdings I LLC 2012-553874  
2010-02-US-A United States vTvx Holdings I LLC 13/062,395  
77456-A United States Jointly owned by vTvx Holdings I LLC and The Trustees of Columbia University in the City of New York, each with a 1/2 undivided interest. 11/197,644  

 

 
 

 

Commercial Lease Transferred from vTvx Holdings I LLC :

 

· Lease Agreement, dated as of September 20, 1999, by and between Liberty Property Limited Partnership and TransTech Pharma, Inc., as amended by that certain First Amendment thereto dated as of March 6, 2000, that certain Second Amendment thereto dated as of March 22, 2000, that certain Third Amendment thereto dated as of December 5, 2001, that certain Fourth Amendment thereto dated as of March 18, 2004, and that certain Fifth Amendment thereto dated as of May 30, 2013, which Lease Agreement, as amended, relates to 4170 Mendenhall Oaks Pkwy, High Point, NC.

 

License Agreements and other Contracts Transferred from vTvx Holdings I LLC :

 

· New Exclusive License Agreement, dated May 14, 2015, by and between The Trustees of Columbia University in the City of New York and vTvx I Holdings LLC.

 

· Agreement Concerning Glucokinase Activator Project, dated February 20, 2007, by and between Novo Nordisk A/S and vTvx I Holdings LLC.

 

· License and Research Agreement, dated as of March 5, 2015, by and among Calithera Biosciences Inc., vTvx I Holdings LLC, and vTvx II Holdings LLC.

 

· Biological Program Termination Agreement, dated as of May 8, 2009, by and between Pfizer, Inc. and vTvx I Holdings LLC.

 

· Assignment of Patent Applications, dated as of July 17, 2013, by and between Pfizer, Inc. and vTvx I Holdings LLC.

 

· All other valid and ongoing licenses, contracts and other agreements entered into by vTvx Holdings I LLC, but excluding the agreements set forth or referenced in the Excluded Assets section below.

 

Personal Property Transferred from vTvx Holdings I LLC :

 

· All personal property owned by vTvx Holdings I LLC, including (without limitation) the following:

 

o Laboratory equipment

 

o Leasehold improvements

 

o Computers and hardware

 

o Software

 

o Furniture and office equipment

 

 
 

 

Transferred Employee Assets of vTvx Holdings I LLC :

 

The following employee benefit plans are, in respect of those employees of vTvx Holdings I LLC and vTvx Holdings II LLC whose employment is assigned and transferred to the Company and subject to any transition services period as set forth in Sections 2.1(d)(i) and 2.1(d)(v) of the Agreement, assigned and transferred to the Company.

 

· TransTech Pharma, LLC Retirement Plan

 

o Directed Trustee Agreement by and between TransTech Pharma, LLC and Mid Atlantic Trust Company, dated as of November 26, 2013

 

o Investment Management Agreement by and between High Point Bank and Trust Company and TransTech Pharma, LLC & PharmaCore, Inc., dated as of November 26, 2013

 

o Recordkeeping and Investment Account Services Agreement by and between EPIC Advisors, Inc. and TransTech Pharma, LLC, dated as of November 26, 2013

 

· BlueOptions Medical Plan (BlueCross BlueShield of North Carolina)

 

· Delta Dental PPO Plus Premier (Dental Plan)

 

· COBRA Administration Arrangement with Flores & Associates, LLC

 

· Wingspan Cafeteria Plan (AFLAC supplemental insurance)

 

· Group Term Life Insurance (USAble Life)

 

· Group Voluntary Life Insurance (USAble Life)

 

· Group Accidental Death and Dismemberment Insurance (USAble Life)

 

· Group Long Term Disability Insurance (USAble Life)

 

· Group Short Term Disability Insurance (administered by USAble Life)

 

 
 

 

Assets Transferred from vTvx Holdings II LLC

 

INDs and Similar Assets :

 

Program Compound IND / File # Holder
BACH1 HPP971 IND 119,328 vTvx Holdings II LLC
PDE4 HPP737 IND 116,186 vTvx Holdings II LLC
PPAR HPP593 IND 122,225; and IND 107,545 vTvx Holdings II LLC
11-Beta HPP851 IND 110,923 vTvx Holdings II LLC
PPAR HPP5920 IND 73,189 vTvx Holdings II LLC
BACE HPP854 IND 105,195 vTvx Holdings II LLC
H3 HPP404 IND 103,863 vTvx Holdings II LLC

 

Patents :

 

File No. Country Owner Application No. Patent No.
3009.200-GCC Gulf Cooperation Council vTvx Holdings II LLC GC 2011-17799  
3009.200-JO Jordan vTvx Holdings II LLC 47/2011  
3009.200-LB Lebanon vTvx Holdings II LLC 1193 9286
3009.200-TW Taiwan vTvx Holdings II LLC 100105506  
3009.200-US United States vTvx Holdings II LLC 13/028,406 8,759,535
3009.204-AU Australia vTvx Holdings II LLC 2011218316  
3009.204-BR Brazil vTvx Holdings II LLC BR1120120207598  
3009.204-CA Canada vTvx Holdings II LLC 2789950  
3009.204-CN China vTvx Holdings II LLC 201180009915.3 ZL 201180009915.3
3009.204-HK Hong Kong vTvx Holdings II LLC 12112645  
3009.204-IL Israel vTvx Holdings II LLC 220906  
3009.204-IN India vTvx Holdings II LLC 6692/DELNP/2012  
3009.204-JP Japan vTvx Holdings II LLC 2012-553942  
3009.204-KR South Korea vTvx Holdings II LLC 10-2012-7023193  
3009.204-MO Macau vTvx Holdings II LLC J/001597  
3009.204-MX Mexico vTvx Holdings II LLC MX/a/2012/009628  
3009.204-NZ New Zealand vTvx Holdings II LLC 602395 602395
3009.204-SG Singapore vTvx Holdings II LLC 201205373-2 182629
3009.204-ZA South Africa vTvx Holdings II LLC 2012/05800  
3009.205-EA Eurasia vTvx Holdings II LLC 201290808  
3009.205-EP Europe vTvx Holdings II LLC 11745064.3  
3009.210-US United States vTvx Holdings II LLC 14/215,873  
3017.204-US United States vTvx Holdings II LLC 13/894,922  
3039.000-US United States vTvx Holdings II LLC 62/082,706  
 
 
File No. Country Owner Application No. Patent No.
3040.000-US United States vTvx Holdings II LLC 62/085,875  
3036.000-US United States vTvx Holdings II LLC 62/063,347  
3037.000-US United States vTvx Holdings II LLC 62/063,352  
3038.000-US United States vTvx Holdings II LLC 62/063,348  
CBH-02560 United States vTvx Holdings II LLC 62/171,051  
3004.204-AU Australia vTvx Holdings II LLC 2009206368 2009206368
3004.204-BR Brazil vTvx Holdings II LLC PI0906809-0  
3004.204-CA Canada vTvx Holdings II LLC 2711576  
3004.204-CN China vTvx Holdings II LLC 200980102961 ZL200980102961.0
3004.204-HK Hong Kong vTvx Holdings II LLC 11102132.2  
3004.204-IL Israel vTvx Holdings II LLC 206854 206854
3004.204-IN India vTvx Holdings II LLC 5151/DELNP/2010  
3004.204-JP Japan vTvx Holdings II LLC 2010-544436 5406215
3004.204-KR South Korea vTvx Holdings II LLC 10-2010-7017176  
3004.204-MO Macau vTvx Holdings II LLC J/001596  
3004.204-MX Mexico vTvx Holdings II LLC MX/a/2010/007768 313517
3004.204-NZ New Zealand vTvx Holdings II LLC 586695 586695
3004.204-SG Singapore vTvx Holdings II LLC 201005095-3 163680 [WO 2009/094528]
3004.204-US United States vTvx Holdings II LLC 12/532,861 7,964,608
3004.204-ZA South Africa vTvx Holdings II LLC 2010/04818 2010/04818
3004.205-CH Switzerland vTvx Holdings II LLC 9704760.9 2244574
3004.205-DE Germany vTvx Holdings II LLC 9704760.9 2244574 (DE 60 2009 026 929.1)
3004.205-EA Eurasia vTvx Holdings II LLC 201070884 18462
3004.205-EP Europe vTvx Holdings II LLC 9704760.9 2244574
3004.205-ES Spain vTvx Holdings II LLC 9704760.9 2244574
3004.205-FR France vTvx Holdings II LLC 9704760.9 2244574
3004.205-IE Ireland vTvx Holdings II LLC 9704760.9 2244574
3004.205-IT Italy vTvx Holdings II LLC 9704760.9 2244574 (IT 72239/BE/2014)
3004.205-UK United Kingdom vTvx Holdings II LLC 9704760.9 2244574
3004.214-US United States vTvx Holdings II LLC 13/040,382 8,853,226
3004.224-US United States vTvx Holdings II LLC 13/410,628 8,329,715
3004.234-US United States vTvx Holdings II LLC 14/477,302  
3025.200-US United States vTvx Holdings II LLC 14/478,594  
3025.204-PCT PCT Application vTvx Holdings II LLC PCT/US2014/054303  
5697.200-US United States vTvx Holdings II LLC 09/551,740 6,972,294
6134.210-US United States vTvx Holdings II LLC 10/370,856 6,867,218
6310.200-US United States vTvx Holdings II LLC 10/201,456 6,869,967
6569.200-US United States vTvx Holdings II LLC 10/693,161 7,129,268
 
 
File No. Country Owner Application No. Patent No.
6569.204-AU Australia vTvx Holdings II LLC 2003273783 2003273783
6569.204-CN China vTvx Holdings II LLC 200380102228.1 ZL200380102228.1
6569.204-IN India vTvx Holdings II LLC 1364/DELNP/2005 232024
6569.204-JP Japan vTvx Holdings II LLC 2005-501509 4708184
6569.204-MX Mexico vTvx Holdings II LLC PA/a/2005/004402 254995
6569.204-RU Russia vTvx Holdings II LLC 2005116243 2349582
6569.204-ZA South Africa vTvx Holdings II LLC 2005/02814 2005/02814
6569.205-BE Belgium vTvx Holdings II LLC 3757741.8 1558572
6569.205-CH Switzerland vTvx Holdings II LLC 3757741.8 1558572
6569.205-DE Germany vTvx Holdings II LLC 3757741.8 1558572 (60333211.0)
6569.205-EP Europe vTvx Holdings II LLC 3757741.8 1558572
6569.205-ES Spain vTvx Holdings II LLC 3757741.8 1558572 (2345882)
6569.205-FR France vTvx Holdings II LLC 3757741.8 1558572
6569.205-GB United Kingdom vTvx Holdings II LLC 3757741.8 1558572
6569.205-IE Ireland vTvx Holdings II LLC 3757741.8 1558572
6569.205-IT Italy vTvx Holdings II LLC 3757741.8 1558572 (27102 BE/2010)
7186.200-TW Taiwan vTvx Holdings II LLC 95123781 I371446
7186.204-AU Australia vTvx Holdings II LLC 2006265172 2006265172
7186.204-BR Brazil vTvx Holdings II LLC PI0612730-4  
7186.204-CA Canada vTvx Holdings II LLC 2613365 2,613,365
7186.204-IN India vTvx Holdings II LLC 9775/DELNP/2007  
7186.204-JP Japan vTvx Holdings II LLC 2008-519909 5052511
7186.204-KR South Korea vTvx Holdings II LLC 10-2008-7001795 10-1333101
7186.204-MX Mexico vTvx Holdings II LLC MX/a/2007/016374 289941
7186.204-RU Russia vTvx Holdings II LLC 2007147050 2412935
7186.204-US United States vTvx Holdings II LLC 11/917,811 7,943,669
7186.205-CH Switzerland vTvx Holdings II LLC 6763966.6 1899302
7186.205-DE Germany vTvx Holdings II LLC 6763966.6 1899302 (602006025239.0)
7186.205-EP Europe vTvx Holdings II LLC 6763966.6 1899302
7186.205-ES Spain vTvx Holdings II LLC 6763966.6 1899302 (2372617)
7186.205-FR France vTvx Holdings II LLC 6763966.6 1899302
7186.205-GB United Kingdom vTvx Holdings II LLC 6763966.6 1899302
7186.205-IE Ireland vTvx Holdings II LLC 6763966.6 1899302
7186.205-IT Italy vTvx Holdings II LLC 6763966.6 1899302 (32046 BE/2011)
7186.214-MX Mexico vTvx Holdings II LLC MX/a/2011/008185 313342
7186.214-US United States vTvx Holdings II LLC 13/080,425 8,217,086
7186.215-CH Switzerland vTvx Holdings II LLC 10188181.1 2298742
7186.215-DE Germany vTvx Holdings II LLC 10188181.1 2298742 (602006040041.1)
 
 
File No. Country Owner Application No. Patent No.
7186.215-EP Europe vTvx Holdings II LLC 10188181.1 2298742
7186.215-ES Spain vTvx Holdings II LLC 10188181.1 2298742 (2449618)
7186.215-FR France vTvx Holdings II LLC 10188181.1 2298742
7186.215-GB United Kingdom vTvx Holdings II LLC 10188181.1 2298742
7186.215-IE Ireland vTvx Holdings II LLC 10188181.1 2298742
7186.215-IT Italy vTvx Holdings II LLC 10188181.1 2298742 (21081 BE/2014)
7186.224-US United States vTvx Holdings II LLC 13/466,191 8,426,473
7253.200-TW Taiwan vTvx Holdings II LLC 95148358 I389878
7253.204-AU Australia vTvx Holdings II LLC 2006327003 2006327003
7253.204-BR Brazil vTvx Holdings II LLC PI0620468-6  
7253.204-CA Canada vTvx Holdings II LLC 2631390 2,631,390
7253.204-IL Israel vTvx Holdings II LLC 191655 191655
7253.204-IN India vTvx Holdings II LLC 5418/DELNP/2008  
7253.204-JP Japan vTvx Holdings II LLC 2008-546470 5054028
7253.204-KR South Korea vTvx Holdings II LLC 10-2008-7016288 10-1265078
7253.204-MX Mexico vTvx Holdings II LLC MX/a/2008/008098 294461
7253.204-NZ New Zealand vTvx Holdings II LLC 568488 568488
7253.204-US United States vTvx Holdings II LLC 12/097,564 7,943,613
7253.204-ZA South Africa vTvx Holdings II LLC 2008/04767 2008/04767
7253.205-AT Austria vTvx Holdings II LLC 6830789.1 1979311 (E561921)
7253.205-BE Belgium vTvx Holdings II LLC 6830789.1 1979311
7253.205-CH Switzerland vTvx Holdings II LLC 6830789.1 1979311
7253.205-DE Germany vTvx Holdings II LLC 6830789.1 1979311 (602006030230.4)
7253.205-EA Eurasia vTvx Holdings II LLC 200870103 15717
7253.205-EP Europe vTvx Holdings II LLC 6830789.1 1979311
7253.205-ES Spain vTvx Holdings II LLC 6830789.1 1979311 (2386734)
7253.205-FR France vTvx Holdings II LLC 6830789.1 1979311
7253.205-GB United Kingdom vTvx Holdings II LLC 6830789.1 1979311
7253.205-IE Ireland vTvx Holdings II LLC 6830789.1 1979311
7253.205-IT Italy vTvx Holdings II LLC 6830789.1 1979311
7253.214-CN China vTvx Holdings II LLC 201310097997.2  
7253.214-HK Hong Kong vTvx Holdings II LLC 14100388.4  
7253.214-US United States vTvx Holdings II LLC 13/079,460 8,362,016
7253.224-US United States vTvx Holdings II LLC 13/708,163 8,551,993
7253.234-US United States vTvx Holdings II LLC 14/016,442  
3006.204-AU Australia vTvx Holdings II LLC 2009316802 2009316802
3006.204-CA Canada vTvx Holdings II LLC 2744383  
3006.204-EA Eurasia vTvx Holdings II LLC 201170703 20496
 
 
File No. Country Owner Application No. Patent No.
3006.204-IN India vTvx Holdings II LLC 3778/DELNP/2011  
3006.204-KR South Korea vTvx Holdings II LLC 10-2011-7013921  
3006.204-ME Montenegro vTvx Holdings II LLC P-2011-89 1145
3006.204-MX Mexico vTvx Holdings II LLC MX/a/2011/005037 322321
3006.204-US United States vTvx Holdings II LLC 13/128,045 8,927,549
3006.204-ZA South Africa vTvx Holdings II LLC 2011/04551 2011/04551
3006.205-EP Europe vTvx Holdings II LLC 9828106.6  
3006.214-SG Singapore vTvx Holdings II LLC 201308611-1  
3015.200-US United States vTvx Holdings II LLC 13/189,640 8,513,430
6620.504-US United States vTvx Holdings II LLC 11/254,125 7,501,405
7533.204-US United States vTvx Holdings II LLC 12/528,227 8,334,305
7534.204-AU Australia vTvx Holdings II LLC 2008219326 2008219326
7534.204-CA Canada vTvx Holdings II LLC 2675669 2,675,669
7534.204-CN China vTvx Holdings II LLC 200880005896.5  
7534.204-IL Israel vTvx Holdings II LLC 199853  
7534.204-JP Japan vTvx Holdings II LLC 2009-550278 5243455
7534.204-KR South Korea vTvx Holdings II LLC 10-2009-7017160 10-1487813
7534.204-MX Mexico vTvx Holdings II LLC MX/a/2009/008228 310901
7534.204-US United States vTvx Holdings II LLC 12/528,229 8,383,820
7534.204-ZA South Africa vTvx Holdings II LLC 2009/04916 2009/04916
7534.205-EA Eurasia vTvx Holdings II LLC 200970791 16951
7534.205-EP Europe vTvx Holdings II LLC 8709090.8  
7534.205-HK Hong Kong vTvx Holdings II LLC 10105670.4  
7534.214-US United States vTvx Holdings II LLC 13/739,408 8,809,540
7534.224-US United States vTvx Holdings II LLC 14/321,884 8,907,096
7545.204-CN China vTvx Holdings II LLC 200880019488.5 ZL200880019488.5
7545.204-US United States vTvx Holdings II LLC 12/597,129 8,383,683
7545.205-BE Belgium vTvx Holdings II LLC 8745501 2150109
7545.205-CH Switzerland vTvx Holdings II LLC 8745501 2150109
7545.205-DE Germany vTvx Holdings II LLC 8745501 2150109 (602008018859.0)
7545.205-EP Europe vTvx Holdings II LLC 8745501 2150109
7545.205-ES Spain vTvx Holdings II LLC 8745501 2150109 (2393230)
7545.205-FR France vTvx Holdings II LLC 8745501 2150109
7545.205-GB United Kingdom vTvx Holdings II LLC 8745501 2150109
7545.205-HK Hong Kong vTvx Holdings II LLC 10106495.5 HK1140377
7545.205-IE Ireland vTvx Holdings II LLC 8745501 2150109
7545.205-IT Italy vTvx Holdings II LLC 8745501 2150109 (52364 BE/2012)
3002.204-AU Australia vTvx Holdings II LLC 2006223070 2006223070
3002.204-CA Canada vTvx Holdings II LLC 2600570 2,600,570
 
 
File No. Country Owner Application No. Patent No.
3002.204-CN China vTvx Holdings II LLC 200680008417.6 ZL200680008417.6
3002.204-IL Israel vTvx Holdings II LLC 185541 185541
3002.204-MO Macau vTvx Holdings II LLC J/000923 J/000923
3002.204-MX Mexico vTvx Holdings II LLC MX/a/2007/011234 299183
3002.204-NZ New Zealand vTvx Holdings II LLC 561029 561029
3002.204-US United States vTvx Holdings II LLC 11/885,096 7,893,267
3002.205-AT Austria vTvx Holdings II LLC 6738139.2 1863771 (E582940)
3002.205-BE Belgium vTvx Holdings II LLC 6738139.2 1863771
3002.205-CH Switzerland vTvx Holdings II LLC 6738139.2 1863771
3002.205-DE Germany vTvx Holdings II LLC 6738139.2 1863771 (602006032907.5)
3002.205-EP Europe vTvx Holdings II LLC 6738139.2 1863771
3002.205-ES Spain vTvx Holdings II LLC 6738139.2 1863771 (2400287)
3002.205-FR France vTvx Holdings II LLC 6738139.2 1863771
3002.205-GB United Kingdom vTvx Holdings II LLC 6738139.2 1863771
3002.205-HK Hong Kong vTvx Holdings II LLC 8105884  
3002.205-IE Ireland vTvx Holdings II LLC 6738139.2 1863771
3002.205-IT Italy vTvx Holdings II LLC 6738139.2 1863771 (47770 BE/2013)
3002.214-US United States vTvx Holdings II LLC 12/950,718 8,598,353
3002.214-ZA South Africa vTvx Holdings II LLC 2009/03300 2009/03300
3002.224-US United States vTvx Holdings II LLC 14/064,737 8,946,259
3011.204-US United States vTvx Holdings II LLC 13/214,434 8,350,039
3013.200-US United States vTvx Holdings II LLC 13/052,544 8,450,354
3001.200-US United States vTvx Holdings II LLC 11/255,000 7,582,673
5390.200-US United States vTvx Holdings II LLC 09/548,081 6,908,926
6327.205-EP Europe vTvx Holdings II LLC 2742851.5 1421071
6446.204-MX Mexico vTvx Holdings II LLC PA/a/2004/007416 251269
6483.200-US United States vTvx Holdings II LLC 10/453,106 6,906,060
6739.204-AU Australia vTvx Holdings II LLC 2004259263 2004259263
6739.204-CA Canada vTvx Holdings II LLC 2532236 2,532,236
6739.204-CN China vTvx Holdings II LLC 200480021891.3 ZL200480021891.3
6739.204-MX Mexico vTvx Holdings II LLC PA/a/2006/001053 257494
6739.204-US United States vTvx Holdings II LLC 11/334,207 7,294,626
6739.205-BE Belgium vTvx Holdings II LLC 4738980.4 1651615
6739.205-CH Switzerland vTvx Holdings II LLC 4738980.4 1651615
6739.205-DE Germany vTvx Holdings II LLC 4738980.4 1651615 (602004026068.1)
6739.205-EP Europe vTvx Holdings II LLC 4738980.4 1651615
6739.205-ES Spain vTvx Holdings II LLC 4738980.4 1651615 (2342605)
6739.205-FR France vTvx Holdings II LLC 4738980.4 1651615
 
 
File No. Country Owner Application No. Patent No.
6739.205-GB United Kingdom vTvx Holdings II LLC 4738980.4 1651615
6739.205-IE Ireland vTvx Holdings II LLC 4738980.4 1651615
6739.205-IT Italy vTvx Holdings II LLC 4738980.4 1651615 (24463 BE/2010)
7213.204-AU Australia vTvx Holdings II LLC 2006264966 2006264966
7213.204-CA Canada vTvx Holdings II LLC 2614116  
7213.204-JP Japan vTvx Holdings II LLC 2008-519917 5121707
7213.204-KR South Korea vTvx Holdings II LLC 10-2008-7000240 10-1286569
7213.204-MX Mexico vTvx Holdings II LLC MX/a/2007/015675 295147
7213.204-RU Russia vTvx Holdings II LLC 2007147044 2442775
7213.204-US United States vTvx Holdings II LLC 11/917,823 8,501,739
7213.214-RU Russia vTvx Holdings II LLC 2011142654 2499795
7213.214-US United States vTvx Holdings II LLC 13/472,090 8,846,677
7213.215-CH Switzerland vTvx Holdings II LLC 10166493.6 2233470
7213.215-DE Germany vTvx Holdings II LLC 10166493.6 2233470 (602006026313.9)
7213.215-EP Europe vTvx Holdings II LLC 10166493.6 2233470
7213.215-ES Spain vTvx Holdings II LLC 10166493.6 2233470 (2375929)
7213.215-FR France vTvx Holdings II LLC 10166493.6 2233470
7213.215-GB United Kingdom vTvx Holdings II LLC 10166493.6 2233470
7213.215-IE Ireland vTvx Holdings II LLC 10166493.6 2233470
7213.215-IT Italy vTvx Holdings II LLC 10166493.6 2233470 (19699 BE/2012)
7397.204-AU Australia vTvx Holdings II LLC 2007229492 2007229492
7397.204-CN China vTvx Holdings II LLC 200780010971.2 ZL200780010971.2
7397.204-KR South Korea vTvx Holdings II LLC 10-2008-7023919 10-1280333
7397.204-MO Macau vTvx Holdings II LLC J/000709 J/000709
7397.204-MX Mexico vTvx Holdings II LLC MX/a/2008/011123 288665
7397.204-NZ New Zealand vTvx Holdings II LLC 570524 570524
7397.204-US United States vTvx Holdings II LLC 12/294,756 8,394,842
7397.204-ZA South Africa vTvx Holdings II LLC 2008/06985 2008/06985
7397.205-BE Belgium vTvx Holdings II LLC 7727226.8 1999120
7397.205-CH Switzerland vTvx Holdings II LLC 7727226.8 1999120
7397.205-DE Germany vTvx Holdings II LLC 7727226.8 1999120 (602007023602.9)
7397.205-EA Eurasia vTvx Holdings II LLC 200870376 15569
7397.205-EP Europe vTvx Holdings II LLC 7727226.8 1999120
7397.205-ES Spain vTvx Holdings II LLC 7727226.8 1999120
7397.205-FR France vTvx Holdings II LLC 7727226.8 1999120
7397.205-GB United Kingdom vTvx Holdings II LLC 7727226.8 1999120
7397.205-HK Hong Kong vTvx Holdings II LLC 9107300.1 HK1129102
 
 
File No. Country Owner Application No. Patent No.
7397.205-IE Ireland vTvx Holdings II LLC 7727226.8 1999120
7397.205-IT Italy vTvx Holdings II LLC 7727226.8 1999120 (28597 BE/2012)
7397.214-US United States vTvx Holdings II LLC 13/660,045 8,772,285
7435.204-US United States vTvx Holdings II LLC 12/301,919 8,318,927
7461.204-AU Australia vTvx Holdings II LLC 2007267197 2007267197
7461.204-CA Canada vTvx Holdings II LLC 2659570  
7461.204-EA Eurasia vTvx Holdings II LLC 200870586 16026
7461.204-IL Israel vTvx Holdings II LLC 194681 194681
7461.204-JP Japan vTvx Holdings II LLC 2009-512547 5694661
7461.204-MX Mexico vTvx Holdings II LLC MX/a/2008/014766 297339
7461.204-NZ New Zealand vTvx Holdings II LLC 571972 571972
7461.204-US United States vTvx Holdings II LLC 12/302,132 8,378,097
7461.204-ZA South Africa vTvx Holdings II LLC 2008/08730 2008/08730
7461.205-AL Albania vTvx Holdings II LLC 7729379.3 2079732
7461.205-AT Austria vTvx Holdings II LLC 7729379.3 2079732 (E538116)
7461.205-BA Bosnia & Herzegovina vTvx Holdings II LLC 7729379.3 2079732
7461.205-BE Belgium vTvx Holdings II LLC 7729379.3 2079732
7461.205-BG Bulgaria vTvx Holdings II LLC 7729379.3 2079732 (BG/EP2079732T3)
7461.205-CH Switzerland vTvx Holdings II LLC 7729379.3 2079732
7461.205-CY Cyprus vTvx Holdings II LLC 7729379.3 2079732 (CY1112455)
7461.205-CZ Czech Republic vTvx Holdings II LLC 7729379.3 2079732
7461.205-DE Germany vTvx Holdings II LLC 7729379.3 2079732 (602007019505.5)
7461.205-DK Denmark vTvx Holdings II LLC 7729379.3 2079732 (DK/EP2079732)
7461.205-EE Estonia vTvx Holdings II LLC 7729379.3 2079732
7461.205-EP Europe vTvx Holdings II LLC 7729379.3 2079732
7461.205-ES Spain vTvx Holdings II LLC 7729379.3 2079732
7461.205-FI Finland vTvx Holdings II LLC 7729379.3 2079732
7461.205-FR France vTvx Holdings II LLC 7729379.3 2079732
7461.205-GB United Kingdom vTvx Holdings II LLC 7729379.3 2079732
7461.205-GR Greece vTvx Holdings II LLC 7729379.3 2079732 (3077337)
7461.205-HR Croatia vTvx Holdings II LLC 7729379.3 2079732 (P20120227)
7461.205-HU Hungary vTvx Holdings II LLC 7729379.3 2079732 (E012931)
7461.205-IE Ireland vTvx Holdings II LLC 7729379.3 2079732
7461.205-IS Iceland vTvx Holdings II LLC 7729379.3 2079732
7461.205-IT Italy vTvx Holdings II LLC 7729379.3 2079732 (21629 BE/2012)
7461.205-LT Lithuania vTvx Holdings II LLC 7729379.3 2079732
7461.205-LU Luxembourg vTvx Holdings II LLC 7729379.3 2079732
 
 
File No. Country Owner Application No. Patent No.
7461.205-LV Latvia vTvx Holdings II LLC 7729379.3 2079732
7461.205-MC Monaco vTvx Holdings II LLC 7729379.3 2079732
7461.205-ME Montenegro vTvx Holdings II LLC 7729379.3 1302
7461.205-MK Macedonia vTvx Holdings II LLC 7729379.3 2079732 (P-403/11)
7461.205-MT Malta vTvx Holdings II LLC 7729379.3 2079732
7461.205-NL Netherlands vTvx Holdings II LLC 7729379.3 2079732
7461.205-PL Poland vTvx Holdings II LLC 7729379.3 2079732
7461.205-PT Portugal vTvx Holdings II LLC 7729379.3 2079732
7461.205-RO Romania vTvx Holdings II LLC 7729379.3 2079732
7461.205-RS Serbia vTvx Holdings II LLC 7729379.3 2079732 (P-78/12)
7461.205-SE Sweden vTvx Holdings II LLC 7729379.3 2079732
7461.205-SI Slovenia vTvx Holdings II LLC 7729379.3 2079732
7461.205-SK Slovakia vTvx Holdings II LLC 7729379.3 2079732 (E11259 T3)
7461.205-TR Turkey vTvx Holdings II LLC 7729379.3 2079732 (TR201201949T4)
7461.214-SG Singapore vTvx Holdings II LLC 201004699-3 163547 [WO 2007/137968]
7660.204-US United States vTvx Holdings II LLC 12/663,103 8,344,001

 

License Agreements and other Contracts Transferred from vTvx Holdings II LLC :

 

· License and Research Agreement, dated as of March 5, 2015, by and among Calithera Biosciences Inc., vTvx I Holdings LLC, and vTvx II Holdings LLC.

 

· All other valid and ongoing licenses, contracts and other agreements entered into by vTvx Holdings II LLC, but excluding the agreements set forth or referenced in the Excluded Assets section below.

 

Transferred Employee Assets of vTvx Holdings II LLC :

 

None.

 

Know-How Transferred from both vTvx Holdings I LLC and vTvx Holdings II LLC :

 

All know-how associated with any of the foregoing transferred intellectual and other property, including all programs and the “Translational Technology”, including without limitation the following programs:

 

· RAGE (TTP488) program

 

· GK (TTP399) program

 

· GLP (TTP273) program

 

· PPAR (HPP593) program

 

· BACH1 (HPP971) program

 

 
 

 

· HK2 program

 

· RAGE (TTP4000) program

 

· PDE4 program

 

· 11beta program

 

· BACE program

 

· GalR1 program

 

· H3 program

 

 
 

 

Excluded Assets

 

List of vTvx Holdings I LLC assets that are NOT being assigned or transferred:

 

For the avoidance of doubt, the following assets are excluded from assignment or transfer by vTvx Holdings I LLC:

 

Category Items
Commercial Lease

Commercial Lease for 4160 Mendenhall Oaks Pkwy Building

 

Real Property

Lot 6 – 4130 Mendenhall Oaks Pkwy, High Point, NC (3.322 acres)

Lot 8 – 4150 Mendenhall Oaks Pkwy, High Point, NC (3.060 acres)

Lot 11-A – 4165 Mendenhall Oaks Pkwy, High Point, NC (10.346 acres)

 

Financial

1)      Note receivable from Former Officer plus any accrued interest

2)      Note receivable from PharmaCore, Inc. plus any accrued interest

3)      Restricted cash to secure letter of credit for 4160 Mendenhall Oaks lease

4)      Benefits and obligations described in the Letter Agreement with Former Officer dated December 31, 2014,   including, but not limited to, cash payments and perpetual securities.

5)      Note payable to M&F TTP Holdings LLC (“Uncommitted Advance Agreement”) plus any accrued interest

6)      Note payable to High Point Bank plus any accrued interest

7)      Accounts payable invoices to PharmaCore, Inc. prior to January 1, 2015 

 

Domain Names

TRANSTECHPHARMA.BIZ

TRANSTECHPHARMA.COM

TRANSTECHPHARMA.INFO

TRANSTECHPHARMA.NET

TRANSTECHPHARMA.ORG

TRANSTECHPHARMA.US

TRANSTECHPHARMA.XXX

TTPHARMA.BIZ

TT-PHARMA.BIZ

TTPHARMA.COM

TTPHARMA.INFO

TT-PHARMA.INFO

TTPHARMA.NET

TT-PHARMA.NET

TTPHARMA.ORG

TT-PHARMA.ORG

TTPHARMA.US

TT-PHARMA.US

 

     
 
 
     
Trademarks Trademark Application No.
TRANSTECH PHARMA 76/406,577
TRANSTECH PHARMA & DESIGN 76/406,579
AT THE FRONTIER OF TRANSLATING INNOVATIVE SCIENCE INTO MEDICINE 76/404,964
VTV THERAPEUTICS (Class 5) 86/594,084
VTV THERAPEUTICS (Class 42) 86/594,096
VTV THERAPEUTICS (Class 44) 86/594,102

 

List of vTvx Holdings II LLC assets that are NOT being assigned or transferred:

 

For the avoidance of doubt, the following assets are excluded from assignment or transfer by vTvx Holdings II LLC:

 

Category Items
Financial

1)       Benefits and obligations described in the Letter Agreement with Former Officer dated December 31, 2014,   including, but not limited to, cash payments and perpetual securities.

2)      Note payable to M&F TTP Holdings LLC (“Uncommitted Advance Agreement”) plus any accrued interest

3)      Accounts payable invoices to PharmaCore, Inc. prior to January 1, 2015

 

Domain Names

HIGHPOINTPHARMACUTICALS.COM

HPPHARMA.COM

HPPHARMACEUTICAL.COM

HIGHPOINTPHARMA.BIZ

HIGHPOINTPHARMA.COM

HIGHPOINTPHARMA.INFO

HIGHPOINTPHARMA.NET

HIGHPOINTPHARMA.ORG

HIGHPOINTPHARMA.US

HIGHPOINTPHARMACEUTICAL.COM

HIGHPOINTPHARMACEUTICALS.BIZ

HIGHPOINTPHARMACEUTICALS.COM

HIGHPOINTPHARMACEUTICALS.NET

HPPHARMACEUTICALS.COM

 

 

 
 

 

Schedule 2

 

Employee Benefit Plans of vTvx I and vTvx II

 

(See attached.)

 

 
 

 

Schedule 2

 

Employee Benefit Plans of vTvx I and vTvx II

 

Employees of vTvx Holdings I LLC and vTvx Holdings II LLC whose employment is assigned and transferred pursuant to Sections 2.1(d)(ii) and 2.1(d)(v) of the Agreement may continue to participate in the following employee benefit plans of vTvx Holdings I LLC and vTvx Holdings II LLC, as applicable, for a period not to exceed four months pursuant to the terms of a customary transition services agreement.

 

· BlueOptions Medical Plan (BlueCross BlueShield of North Carolina)

 

· Delta Dental PPO Plus Premier (Dental Plan)

 

· COBRA Administration Arrangement with Flores & Associates, LLC

 

· Wingspan Cafeteria Plan (AFLAC supplemental insurance)

 

· Group Term Life Insurance (USAble Life)

 

· Group Voluntary Life Insurance (USAble Life)

 

· Group Accidental Death and Dismemberment Insurance (USAble Life)

 

· Group Long Term Disability Insurance (USAble Life)

 

· Group Short Term Disability Insurance (administered by USAble Life)

 

 
 

Exhibit 10.2

 

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

of

VTV THERAPEUTICS LLC

Dated as of July 29, 2015

 
 

 

TABLE OF CONTENTS

 

Page

 

Article I DEFINITIONS AND USAGE 1
Section 1.01   Definitions 1
Section 1.02   Other Definitional and Interpretative Provisions 11
Article II THE COMPANY 12
Section 2.01   Formation 12
Section 2.02   Name 12
Section 2.03   Term 13
Section 2.04   Registered Agent and Registered Office 13
Section 2.05   Purposes 13
Section 2.06   Powers of the Company 13
Section 2.07   Partnership Tax Status 13
Section 2.08   Regulation of Internal Affairs 13
Section 2.09   Ownership of Property 13
Section 2.10   Subsidiaries 13
Article III UNITS; MEMBERS; BOOKS AND RECORDS; REPORTS 14
Section 3.01   Units; Admission of Members 14
Section 3.02   Substitute Members and Additional Members 14
Section 3.03   Tax and Accounting Information 15
Section 3.04   Books and Records 16
Article IV PUBCO OWNERSHIP; RESTRICTIONS ON PUBCO STOCK 17
Section 4.01   Pubco Ownership 17
Section 4.02   Restrictions on Pubco Common Stock 18
Article V CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; DISTRIBUTIONS; ALLOCATIONS 20
Section 5.01   Capital Contributions 20
Section 5.02   Capital Accounts 20
Section 5.03   Amounts and Priority of Distributions 22
Section 5.04   Allocations 24
Section 5.05   Other Allocation Rules 27
Section 5.06   Tax Withholding; Withholding Advances 27
Article VI CERTAIN TAX MATTERS 29
Section 6.01   Tax Matters Partner 29
Section 6.02   Section 754 Election 29
i
 
Article VII MANAGEMENT OF THE COMPANY 29
Section 7.01   Management by the Managing Member 29
Section 7.02   Withdrawal of the Managing Member 30
Section 7.03   Decisions by the Members 30
Section 7.04   [Reserved] 31
Section 7.05   Officers 31
Article VIII TRANSFERS OF INTERESTS 31
Section 8.01   Restrictions on Transfers 31
Section 8.02   Certain Permitted Transfers 32
Section 8.03   Registration of Transfers 33
Article IX [RESERVED] 33
Article X LIMITATION ON LIABILITY, EXCULPATION AND INDEMNIFICATION 33
Section 10.01   Limitation on Liability 33
Section 10.02   Exculpation and Indemnification 33
Article XI DISSOLUTION AND TERMINATION 36
Section 11.01   Dissolution 36
Section 11.02   Winding Up of the Company 36
Section 11.03   Termination 37
Section 11.04   Survival 37
Article XII MISCELLANEOUS 37
Section 12.01   Expenses 37
Section 12.02   Further Assurances 38
Section 12.03   Notices 38
Section 12.04   Binding Effect; Benefit; Assignment 38
Section 12.05   Jurisdiction 38
Section 12.06   WAIVER OF JURY TRIAL 39
Section 12.07   Counterparts 39
Section 12.08   Entire Agreement 39
Section 12.09   Severability 40
Section 12.10   Amendment 40
Section 12.11   Confidentiality 41
Section 12.12   Governing Law 42

 

Schedule A             Member Schedule

 

ii
 

AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this “ Agreement ”) of vTv Therapeutics LLC, a Delaware limited liability company (the “ Company ”), dated as of July 29, 2015, by and among the Company, vTv Therapeutics Inc., a Delaware corporation (“ Pubco ”), vTv Therapeutics Holdings LLC, a Delaware limited liability company (“ Holdings ”), and each other Person admitted as a Member pursuant to Section 3.02(a) hereof.

 

W I T N E S S E T H:

 

WHEREAS, the Company has been heretofore formed as a limited liability company under the Delaware Act (as defined below) pursuant to a certificate of formation which was executed and filed with the Secretary of State of the State of Delaware on April 15, 2015;

 

WHEREAS, Holdings entered into the initial Operating Agreement of the Company, dated as of April 15, 2015 (the “ Initial LLC Agreement ”); and

 

WHEREAS, pursuant to the terms of the Reorganization Agreement (the “ Reorganization Agreement ”), dated as of the date hereof, by and among the Company, Pubco and the other Persons listed on the signature pages thereto, the parties thereto have agreed to consummate the reorganization of the Company as contemplated thereby and to take the other actions contemplated in such Reorganization Agreement (collectively, the “ Reorganization ”).

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein made and other good and valuable consideration, the parties hereto hereby agree, to amend and restate the Initial LLC Agreement in its entirety as set forth herein.

 

Article I

DEFINITIONS AND USAGE

 

Section 1.01         Definitions .

 

(a)                 The following terms shall have the following meanings for the purposes of this Agreement:

 

Additional Member ” means any Person admitted as a Member of the Company pursuant to Section 3.02 in connection with the new issuance of Units to such Person.

 

Adjusted Capital Account Deficit ” means, with respect to any Nonvoting Member, the deficit balance, if any, in such Nonvoting Member’s Capital Account as of the end of the relevant Fiscal Year, after giving effect to the following adjustments:

 

 
 

(i)            Credit to such Capital Account any amounts that such Nonvoting Member is deemed to be obligated to restore pursuant to the penultimate sentence in Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

 

(ii)            Debit to such Capital Account the items described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6).

 

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

 

Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person; provided that no Member nor any Affiliate of any Member shall be deemed to be an Affiliate of any other Member or any of its Affiliates solely by virtue of such Members’ Units.

 

Applicable Law ” means, with respect to any Person, any federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority or Regulatory Agency that is binding upon or applicable to such Person or its assets, as amended unless expressly specified otherwise.

 

Available Cash Flow ” means, for any period, the Company’s consolidated net income determined in accordance with GAAP, adjusted by the Managing Member to exclude non-cash items, extraordinary or one-time items of gain or loss, any compensation expense related to Units or other Equity Securities issued under any management equity plan of Pubco or the Company, and, to the extent not reflected in consolidated net income determined in accordance with GAAP, less any Reserves established during such period (including the amount of any net increase during such period to a Reserve established in a prior period) and plus the amount of any net decrease during such period to a Reserve established by a prior period.

 

Business ” means the business of engaging in the discovery and development of drug candidates, including (without limitation) orally administered small molecule drug candidates, as well as the licensing, manufacture, commercialization, distribution and sale of any drugs developed, and engaging in such activities as are, in the Managing Member’s determination, necessary, incidental or appropriate in connection therewith, in each case, as conducted by the Company and its Subsidiaries.

 

Business Day ” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Applicable Law to close.

 

Capital Account ” means the capital account established and maintained for each Nonvoting Member pursuant to Section 5.02.

 

2
 

Capital Contribution ” means, with respect to any Member, the amount of money and the initial Carrying Value of any Property (other than money) contributed to the Company.

 

Carrying Value ” means with respect to any Property (other than money), such Property’s adjusted basis for federal income tax purposes, except as follows:

 

(i)            The initial Carrying Value of any such Property contributed by a Member to the Company shall be the gross fair market value of such Property, as reasonably determined by the Managing Member;

 

(ii)            The Carrying Values of all such Properties shall be adjusted to equal their respective gross fair market values (taking Section 7701(g) of the Code into account), as reasonably determined by the Managing Member, at the time of any Revaluation pursuant to Section 5.02(c);

 

(iii)            The Carrying Value of any item of such Properties distributed to any Member shall be adjusted to equal the gross fair market value (taking Section 7701(g) of the Code into account) of such Property on the date of distribution as reasonably determined by the Managing Member; and

 

(iv)            The Carrying Values of such Properties shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such Properties pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and subparagraph (vi) of the definition of “Net Income” and “Net Loss” or Section 5.04(b)(vi); provided , however , that Carrying Values shall not be adjusted pursuant to this subparagraph (iv) to the extent that an adjustment pursuant to subparagraph (ii) is required in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv). If the Carrying Value of such Property has been determined or adjusted pursuant to subparagraph (i), (ii) or (iv), such Carrying Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset, for purposes of computing Net Income and Net Loss.

 

Class A Common Stock ” means Class A common stock, $0.01 par value per share, of Pubco.

 

Class B Common Stock ” means Class B common stock, $0.01 par value per share, of Pubco.

 

Class M Common Units ” means the Class M Common Units of the Company, having the rights, privileges and preferences set forth herein.

 

Class M Members ” means the Members holding Class M Common Units.

 

3
 

Code ” means the Internal Revenue Code of 1986, as amended from time to time.

 

Common Unit ” means a Class M Common Unit or Nonvoting Common Unit.

 

Company Minimum Gain ” means “partnership minimum gain,” as defined in Treasury Regulation Sections 1.704-2(b)(2) and 1.704-2(d).

 

Control ” (including the terms “ controlling ” and “ controlled ”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of such subject Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise.

 

Covered Person ” means (i) each Equityholder or an Affiliate thereof, in each case in such capacity, (ii) each officer, director, shareholder, member, partner, employee, representative, agent or trustee of a Member or an Affiliate thereof, in all cases in such capacity, and (iii) each officer, director, shareholder (other than any public shareholder of Pubco that is not an Equityholder), member, partner, employee, representative, agent or trustee of the Managing Member, Pubco (in the event Pubco is not the Managing Member), the Company or an Affiliate controlled thereby, in all cases in such capacity.

 

Delaware Act ” means the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101 et seq .

 

Depreciation ” means, for each Fiscal Year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such Fiscal Year, except that if the Carrying Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such Fiscal Year, Depreciation shall be an amount that bears the same ratio to such beginning Carrying Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Fiscal Year bears to such beginning adjusted tax basis; provided , however , that if the adjusted basis for federal income tax purposes of an asset at the beginning of such Fiscal Year is zero, Depreciation shall be determined with reference to such beginning Carrying Value using any reasonable method selected by the Managing Member.

 

DGCL ” means the General Corporation Law of the State of Delaware, as amended from time to time.

 

Disposition Event ” means any merger, consolidation or other business combination of Pubco, whether effectuated through one transaction or a series of related transactions (including a tender offer followed by a merger in which the holders of Class A Common Stock receive the same consideration per share paid in the tender offer), unless, following such transaction, all or substantially all of the holders of the voting power of all outstanding classes of common stock of Pubco and series of preferred stock of Pubco that are generally entitled to vote in the election of directors of Pubco prior to such transaction or series of transactions, continue to hold a majority of the voting power of the surviving entity (or its parent) resulting from such transaction or series of transactions in substantially the same proportions as immediately prior to such transaction or series of transaction.

 

4
 

Effective Time ” shall mean the effectiveness of the Reorganization as set forth in the Reorganization Agreement.

 

EIP ” means the vTv Therapeutics Inc. 2015 Omnibus Equity Incentive Plan, as the same may be amended from time to time.

 

Equity Securities ” means, with respect to any Person, any (i) membership interests or shares of capital stock, (ii) equity, ownership, voting, profit or participation interests or (iii) similar rights or securities in such Person or any of its Subsidiaries, or any rights or securities convertible into or exchangeable for, options or other rights to acquire from such Person or any of its Subsidiaries, or obligation on the part of such Person or any of its Subsidiaries to issue, any of the foregoing.

 

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and any successor statute thereto, and the rules and regulations of the SEC promulgated thereunder.

 

Exchange Agreement ” means the Exchange Agreement, dated as of the date hereof, by and among Pubco, the Company, Holdings and any other Person that becomes a “Holder” thereunder.

 

Fiscal Year ” means the Company’s fiscal year, which shall initially be the calendar year and which may be changed from time to time as determined by the Managing Member.

 

Governmental Authority ” means any transnational, domestic or foreign federal, state or local governmental, regulatory or administrative authority, department, court, agency or official, including any political subdivision thereof.

 

Indebtedness ” means (a) all indebtedness for borrowed money (including capitalized lease obligations, sale-leaseback transactions or other similar transactions, however evidenced), (b) any other indebtedness that is evidenced by a note, bond, debenture, draft or similar instrument, (c) notes payable and (d) lines of credit and any other agreements relating to the borrowing of money or extension of credit.

 

Investor Rights Agreement ” means the Investor Rights Agreement, dated as of the date hereof, by and between Pubco and Holdings.

 

IPO ” means the initial underwritten public offering of Pubco.

 

Liens ” means any pledge, encumbrance, security interest, purchase option, conditional sale agreement, call or similar right.

 

5
 

Managing Member ” means (i) Pubco so long as Pubco has not withdrawn as the Managing Member pursuant to Section 7.02 and (ii) any successor thereof appointed as Managing Member in accordance with Section 7.02. The Managing Member shall hold all outstanding Class M Common Units.

 

Member ” means any Person named as a Member of the Company on the Member Schedule, as the same may be amended from time to time to reflect any Person admitted as an Additional Member or a Substitute Member, for so long as such Person continues to be a Member of the Company.

 

Member Nonrecourse Debt ” has the same meaning as the term “partner nonrecourse debt” in Treasury Regulations Section 1.704-2(b)(4).

 

Member Nonrecourse Debt Minimum Gain ” means an amount with respect to each “partner nonrecourse debt” (as defined in Treasury Regulation Section 1.704-2(b)(4)) equal to the Company Minimum Gain that would result if such partner nonrecourse debt were treated as a nonrecourse liability (as defined in Treasury Regulation Section 1.752-1(a)(2)) determined in accordance with Treasury Regulation Section 1.704-2(i)(3).

 

Member Nonrecourse Deductions ” has the same meaning as the term “partner nonrecourse deductions” in Treasury Regulations Sections 1.704-2(i)(1) and 1.704-2(i)(2).

 

Net Income ” and “ Net Loss ” mean, for each Fiscal Year or other period, an amount equal to the Company’s taxable income or loss for such Fiscal Year or period, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments (without duplication):

 

(i)            Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of “Net Income” and “Net Loss” shall be added to such taxable income or loss;

 

(ii)            Any expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) of the Code expenditures pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Income and Net Loss pursuant to this definition of “Net Income” and “Net Loss,” shall be treated as deductible items;

 

(iii)            In the event the Carrying Value of any Company asset is adjusted pursuant to subparagraphs (ii) or (iii) of the definition of “Carrying Value,” the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Carrying Value of the asset) or an item of loss (if the adjustment decreases the Carrying Value of the asset) from the disposition of such asset and shall be taken into account, immediately prior to the event giving rise to such adjustment, for purposes of computing Net Income and/or Net Loss;

6
 

 

(iv)            Gain or loss resulting from any disposition of Property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Carrying Value of the Property disposed of, notwithstanding that the adjusted tax basis of such Property differs from its Carrying Value;

 

(v)            In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year, computed in accordance with the definition of Depreciation;

 

(vi)            To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) of the Code is required, pursuant to Treasury Regulations Section 1.704-(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Member’s interest in the Company, the amount of such adjustment 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) from the disposition of such asset and shall be taken into account for purposes of computing Net Income or Net Loss; and

 

(vii)            Notwithstanding any other provision of this definition, any items that are specially allocated pursuant to Section 5.04(b), Section 5.04(c) and Section 5.04(d) shall not be taken into account in computing Net Income and Net Loss.

 

The amounts of the items of Company income, gain, loss, or deduction available to be specially allocated pursuant to Section 5.04(b), Section 5.04(c) and Section 5.04(d) shall be determined by applying rules analogous to those set forth in subparagraphs (i) through (vi) above.

 

Non-Pubco Member ” means any Member that is not a Pubco Member.

 

Nonrecourse Deductions ” has the meaning set forth in Treasury Regulations Sections 1.704-2(b)(1) and 1.704-2(c).

 

Nonvoting Common Units ” means the Nonvoting Common Units of the Company, having the rights, privileges and preferences set forth herein.

 

Nonvoting Members ” means the Members holding Nonvoting Common Units.

 

Nonvoting Percentage Interest ” means, with respect to any Nonvoting Member, a fractional amount, expressed as a percentage: (i) the numerator of which is the aggregate number of Nonvoting Common Units owned of record thereby and (ii) the denominator of which is the aggregate number of Nonvoting Common Units issued and outstanding. The sum of the outstanding Nonvoting Percentage Interests of all Nonvoting Members shall at all times equal 100%.

 

7
 

Paired Interest ” has the meaning set forth in the Exchange Agreement.

 

Percentage Interest ” means, with respect to any Member, a fractional amount, expressed as a percentage: (i) the numerator of which is the aggregate number of Common Units owned of record thereby and (ii) the denominator of which is the aggregate number of Common Units issued and outstanding. The sum of the outstanding Percentage Interests of all Members shall at all times equal 100%.“ Person ” means any individual, firm, corporation, partnership, limited liability company, trust, estate, joint venture, governmental authority or other entity.

 

Prime Rate ” means the rate of interest from time to time identified by JP Morgan Chase, N.A. as being its “prime” or “reference” rate.

 

Property ” means an interest of any kind in any real, personal or intellectual (or mixed) property, including cash, and any improvements thereto, and shall include both tangible and intangible property.

 

Pubco Common Stock ” means all classes and series of common stock of Pubco, including the Class A Common Stock and Class B Common Stock.

 

Pubco Member ” means (i) Pubco and (ii) any Subsidiary of Pubco (other than the Company and its Subsidiaries) that that is a Member.

 

Regulatory Agency ” means the SEC, FINRA, the Financial Services Authority, any non-U.S. regulatory agency and any other regulatory authority or body (including any state or provincial securities authority and any self-regulatory organization) with jurisdiction over the Company or any of its Subsidiaries.

 

Relative Percentage Interest ” means, with respect to any Member relative to another Member or Members, a fractional amount, expressed as a percentage, the numerator of which is the Percentage Interest of such Member; and the denominator of which is (x) the Percentage Interest of such Member plus (y) the aggregate Percentage Interest of such other Member or Members.

 

Reorganization Date Capital Account Balance ” means, with respect to any Nonvoting Member, the positive Capital Account balance of such Member as of immediately following the Reorganization, the amount or deemed value of which is set forth on the Member Schedule.

 

Reorganization Documents ” means the Reorganization Agreement, this Agreement, the Tax Receivable Agreement, the Exchange Agreement, the Investor Rights Agreement, and the EIP.

 

Reserves ” means, as of any date of determination, amounts allocated by the Managing Member, in its reasonable judgment, to reserves maintained for working capital of the Company, for contingencies of the Company, for operating expenses and debt reduction of the Company.

 

8
 

SEC ” means the United States Securities and Exchange Commission.

 

Subsidiary ” means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other business entity of which more than 50% of the total voting power of Equity Securities or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof.

 

Substitute Member ” means any Person admitted as a Member of the Company pursuant to Section 3.02 in connection with the Transfer of then-existing Units to such Person.

 

Tax Distribution ” means a distribution made by the Company pursuant to Section 5.03(e)(i) or Section 5.03(e)(iii) or a distribution made by the Company pursuant to another provision of Section 5.03 but designated as a Tax Distribution pursuant to Section 5.03(e)(ii).

 

Tax Distribution Amount ” means, with respect to a Nonvoting Member’s Units, whichever of the following applies with respect to the applicable Tax Distribution, in each case in amount not less than zero:

 

(i)            With respect to a Tax Distribution pursuant to Section 5.03(e)(i), the excess, if any, of (A) such Member’s required annualized income installment for such estimated payment date under Section 6655(e) of the Code, assuming that (w) such Member is a corporation (which assumption, for the avoidance of doubt, shall not affect the determination of the Tax Rate), (x) Section 6655(e)(2)(C)(ii) is in effect, (y) such Member’s only income is from the Company, and (z) the Tax Rate applies, which amount shall be calculated based on the projections believed by the Managing Member in good faith to be, reasonable projections of the net taxable income to be allocated to such Units pursuant to this Agreement and without regard to any adjustments pursuant to Section 704(c) or Section 743(b) of the Code over (B) the aggregate amount of Tax Distributions designated by the Company pursuant to Section 5.03(e)(ii) with respect to such Units since the date of the previous Tax Distribution pursuant to Section 5.03(e)(i) (or if no such Tax Distribution was required to be made, the date such Tax Distribution would have been made pursuant to Section 5.03(e)(i)).

 

9
 

(ii)            With respect to the designation of an amount as a Tax Distribution pursuant to Section 5.03(e)(ii), the product of (x) the net taxable income, determined without regard to any adjustments pursuant to Section 704(c) or Section 743(b) of the Code projected, in the good faith belief of the Managing Member, to be allocated to such Units pursuant to this Agreement during the period since the date of the previous Tax Distribution (or, if more recent, the date that the previous Tax Distribution pursuant to Section 5.03(e)(i) would have been made or, in the case of the first distribution pursuant to Section 5.03(b), the date of this Agreement), and (y) the Tax Rate.

 

(iii)            With respect to an entire Fiscal Year to be calculated for purposes of Section 5.03(e)(iii), the excess, if any, of (A) the product of (x) the net taxable income, determined without regard to any adjustments pursuant to Section 704(c) or Section 743(b) of the Code, allocated to such Units pursuant to this Agreement for the relevant Fiscal Year, and (y) the Tax Rate, over (B) the aggregate amount of Tax Distributions (other than Tax Distributions under Section 5.03(e)(iii) with respect to a prior Fiscal Year) with respect to such Units made with respect to such Fiscal Year.

 

For purposes of this Agreement, in determining the Tax Distribution Amount of a Nonvoting Member, the taxable income allocated to such Member’s Units shall be offset by any taxable losses (determined without regard to any adjustments pursuant to Section 704(c) or Section 743(b) of the Code) previously allocated to such Units to the extent such losses were not allocated in the same proportion as the Member’s Nonvoting Percentage Interests and have not previously offset taxable income in the determination of the Tax Distribution Amount.

 

Tax Rate ” means the highest marginal tax rates for an individual or corporation that is resident in New York City applicable to ordinary income, qualified dividend income or capital gains, as appropriate, taking into account the holding period of the assets disposed of and the year in which the taxable net income is recognized by the Company, and taking into account the deductibility of state and local income taxes as applicable at the time for federal income tax purposes and any limitations thereon including pursuant to Section 68 of the Code, which Tax Rate shall be the same for all Members and shall not be less than 45%.

 

Tax Receivable Agreement ” means the Tax Receivable Agreement, dated as of the date hereof, by and among Pubco and each of the parties identified as Members therein.

 

Transfer ” means any sale, assignment, transfer, exchange, gift, bequest, pledge, hypothecation or other disposition or encumbrance, direct or indirect, in whole or in part, by operation of law or otherwise, and shall include all matters deemed to constitute a Transfer under Article VIII. The terms “ Transferred ”, “ Transferring ”, “ Transferor ”, “ Transferee ” and “ Transferable ” have meanings correlative to the foregoing.

 

Treasury Regulations ” mean the regulations promulgated under the Code, as amended from time to time.

 

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Units ” means Common Units or any other class of limited liability interests in the Company designated by the Company after the date hereof in accordance with this Agreement; provided that any type, class or series of Units shall have the designations, preferences and/or special rights set forth or referenced in this Agreement, and the membership interests of the Company represented by such type, class or series of Units shall be determined in accordance with such designations, preferences and/or special rights.

 

(b)                Each of the following terms is defined in the Section set forth opposite such term:

 

Term Section
Agreement Preamble
Company Preamble
Confidential Information 12.11(b)
Controlled Entities 10.02(e)
Dissolution Event 11.01(c)
Economic Pubco Security 4.01(a)
e-mail 12.03
Equityholder Parties 12.11(a)
Equityholders 12.11(a)
Expenses 10.02(e)
GAAP 3.03(b)
Indemnification Sources 10.02(e)
Indemnitee-Related Entities 10.02(e)(i)
Initial LLC Agreement Recitals
Jointly Indemnifiable Claims 10.02(e)(ii)
Member Schedule 3.01(a)
Officers 7.05(a)
Process Agent 12.05(b)
Pubco Preamble
Regulatory Allocations 5.04(c)
Reorganization Recitals
Reorganization Agreement Recitals
Revaluation 5.02(c)
Tax Matters Partner 6.01
Transferor Member 5.02(b)
Withholding Advances 5.06(b)

 

Section 1.02         Other Definitional and Interpretative Provisions . The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections and Schedules are to Articles, Sections and Schedules of this Agreement unless otherwise specified. All Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. References to “law”, “laws” or to a particular statute or law shall be deemed also to include any Applicable Law. As used in this Agreement, all references to “majority in interest” and phrases of similar import shall be deemed to refer to such percentage or fraction of interest based on the Relative Percentage Interests of the Members subject to such determination. Unless otherwise expressly provided herein, when any approval, consent or other matter requires any action or approval of any group of Members, including any holders of any class of Units, such approval, consent or other matter shall require the approval of a majority in interest of such group of Members. Except to the extent otherwise expressly provided herein, all references to any Member shall be deemed to refer solely to such Person in its capacity as such Member and not in any other capacity.

 

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Article II

THE COMPANY

 

Section 2.01         Formation . The Company was formed upon the filing of the certificate of formation of the Company with the Secretary of State of the State of Delaware on April 15, 2015. The authorized officer or representative, as an “authorized person” within the meaning of the Delaware Act, shall file and record any amendments and/or restatements to the certificate of formation of the Company and such other certificates and documents (and any amendments or restatements thereof) as may be required under the laws of the State of Delaware and of any other jurisdiction in which the Company may conduct business. The authorized officer or representative shall, on request, provide any Member with copies of each such document as filed and recorded. The Members hereby agree that the Company and its Subsidiaries shall be governed by the terms and conditions of this Agreement and, except as provided herein, the Delaware Act.

 

Section 2.02         Name . The name of the Company shall be vTv Therapeutics LLC; provided that the Managing Member may change the name of the Company to such other name as the Managing Member shall determine in its sole discretion, and shall have the authority to execute, acknowledge, deliver, file and record such further certificates, amendments, instruments and documents, and to do all such other acts and things, as may be required by Applicable Law or as, in the reasonable judgment of the Managing Member, may be necessary or advisable to effect such change.

 

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Section 2.03         Term . The Company shall have perpetual existence unless sooner dissolved and its affairs wound up as provided in Article XI.

 

Section 2.04         Registered Agent and Registered Office . The name of the registered agent of the Company for service of process on the Company in the State of Delaware shall be Corporation Service Company, and the address of such registered agent and the address of the registered office of the Company in the State of Delaware shall be 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808. Such office and such agent may be changed to such place within the State of Delaware and any successor registered agent, respectively, as may be determined from time to time by the Managing Member in accordance with the Delaware Act.

 

Section 2.05         Purposes . The Company has been formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is to engage in the Business and to carry on any other lawful act or activities for which limited liability companies may be organized under the Delaware Act.

 

Section 2.06         Powers of the Company . The Company shall have the power and authority to take any and all actions necessary, appropriate or advisable to or for the furtherance of the purposes set forth in Section 2.05.

 

Section 2.07         Partnership Tax Status . The Members intend that the Company shall be treated as a partnership for federal, state and local income tax purposes to the extent such treatment is available, and agree to take (or refrain from taking) such actions as may be necessary to receive and maintain such treatment and refrain from taking any actions inconsistent thereof.

 

Section 2.08         Regulation of Internal Affairs . The internal affairs of the Company and the conduct of its business shall be regulated by this Agreement, and to the extent not provided for herein, shall be determined by the Managing Member.

 

Section 2.09         Ownership of Property . Legal title to all Property, conveyed to, or held by the Company or its Subsidiaries shall reside in the Company or its Subsidiaries and shall be conveyed only in the name of the Company or its Subsidiaries and no Member or any other Person, individually, shall have any ownership of such Property.

 

Section 2.10         Subsidiaries . The Company shall cause the business and affairs of each of the Subsidiaries to be managed by the Managing Member in accordance with and in a manner consistent with this Agreement.

 

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Article III

UNITS; MEMBERS; BOOKS AND RECORDS; REPORTS

 

Section 3.01         Units; Admission of Members .

 

(a)                 Effective upon the Reorganization, pursuant to the Reorganization Agreement, (i) the Company hereby establishes a new class of Common Units consisting of one Class M Common Unit having the terms set forth herein, and issues such Class M Common Unit to Pubco (as Managing Member) as set forth on Schedule A (the “ Member Schedule ”) and (ii) the Company hereby establishes a new class of Nonvoting Common Units having the terms set forth herein. All Membership Interests (as defined in the Initial LLC Agreement) outstanding as of immediately prior to the Effective Time, all of which are held by Holdings, shall be reclassified into the number of Nonvoting Common Units, in the aggregate, set forth opposite Holdings’ name on the Member Schedule. The Member Schedule shall be maintained by the Managing Member on behalf of the Company in accordance with this Agreement and the Managing Member shall promptly deliver a copy of the Member Schedule to any Member that so requests. When any Units or other Equity Securities of the Company are issued, repurchased, redeemed, converted or Transferred in accordance with this Agreement, the Member Schedule shall be amended by the Managing Member to reflect such issuance, repurchase, redemption or Transfer, the admission of additional or substitute Members and the resulting Percentage Interest of each Member. Following the date hereof, no Person shall be admitted as a Member and no additional Units shall be issued except as expressly provided herein.

 

(b)                The Managing Member may cause the Company to authorize and issue from time to time such other Units or other Equity Securities of any type, class or series and having the designations, preferences and/or special rights as may be determined the Managing Member. Such Units or other Equity Securities may be issued pursuant to such agreements as the Managing Member shall approve. When any such other Units or other Equity Securities are authorized and issued, the Member Schedule and this Agreement shall be amended by the Managing Member to reflect such additional issuances and resulting dilution, which shall be borne pro rata by all Members based on their Common Units.

 

Section 3.02         Substitute Members and Additional Members .

 

(a)                 No Transferee of any Units or Person to whom any Units are issued pursuant to this Agreement shall be admitted as a Member hereunder or acquire any rights hereunder, including any class voting rights or the right to receive distributions and allocations in respect of the Transferred or issued Units, as applicable, unless (i) such Units are Transferred or issued in compliance with the provisions of this Agreement (including Article VIII) and (ii) such Transferee or recipient shall have executed and delivered to the Company such instruments as the Managing Member deems necessary or desirable, in its reasonable discretion, to effectuate the admission of such Transferee or recipient as a Member and to confirm the agreement of such Transferee or recipient to be bound by all the terms and provisions of this Agreement. Upon complying with the immediately preceding sentence, without the need for any further action of any Person, a Transferee or recipient shall be deemed admitted to the Company as a Member. A Substitute Member shall enjoy the same rights, and be subject to the same obligations, as the Transferor; provided that such Transferor shall not be relieved of any obligation or liability hereunder arising prior to the consummation of such Transfer but shall be relieved of all future obligations with respect to the Units so Transferred. As promptly as practicable after the admission of any Person as a Member, the books and records of the Company shall be changed to reflect such admission of a Substitute Member or Additional Member. In the event of any admission of a Substitute Member or Additional Member pursuant to this Section 3.02(a), this Agreement shall be deemed amended to reflect such admission, and any formal amendment of this Agreement (including the Member Schedule) in connection therewith shall only require execution by the Company and such Substitute Member or Additional Member, as applicable, to be effective.

 

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(b)                If a Member shall Transfer all (but not less than all) its Units, the Member shall thereupon cease to be a Member of the Company.

 

Section 3.03         Tax and Accounting Information .

 

(a)                 Accounting Decisions and Reliance on Others . All decisions as to accounting matters, except as otherwise specifically set forth herein, shall be made by the Managing Member in accordance with Applicable Law and with accounting methods followed for federal income tax purposes. In making such decisions, the Managing Member may rely upon the advice of the independent accountants of the Company.

 

(b)                Records and Accounting Maintained . The books and records of the Company shall be kept, and the financial position and the results of its operations recorded, in all material respects in accordance with United States generally accepted accounting principles as in effect from time to time (“ GAAP ”). The Fiscal Year of the Company shall be used for financial reporting and for federal income tax purposes.

 

(c)                 Financial Reports . The books and records of the Company shall be audited as of the end of each Fiscal Year by the same accounting firm that audits the books and records of Pubco (or, if such firm declines to perform such audit, by an accounting firm selected by the Managing Member).

 

(d)                Tax Returns .

 

(i)                  The Company shall timely cause to be prepared by an accounting firm selected by the Managing Member all federal, state, local and foreign tax returns (including information returns) of the Company and its Subsidiaries, which may be required by a jurisdiction in which the Company and its Subsidiaries operate or conduct business for each year or period for which such returns are required to be filed and shall cause such returns to be timely filed. Upon request of any Nonvoting Member, the Company shall furnish to such Nonvoting Member a copy of each such tax return;

 

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(ii)                The Company shall furnish to each Member (a) as soon as reasonably practical after the end of each Fiscal Year, all information concerning the Company and its Subsidiaries required for the preparation of tax returns of such Members (or any beneficial owner(s) of such Member), including a report (including Schedule K-1), indicating each Member’s share of the Company’s taxable income, gain, credits, losses and deductions for such year, in sufficient detail to enable such Member to prepare its federal, state and other tax returns and (b) as soon as reasonably possible after a request by such Member, such other information concerning the Company and its Subsidiaries that is reasonably requested by such Member for compliance with its tax obligations (or the tax obligations of any beneficial owner(s) of such Member) or for tax planning purposes; and

 

(iii)              So long as it holds at least a 5% Nonvoting Percentage Interest, Holdings shall be entitled to review and comment on any tax returns or reports to be prepared pursuant to this Section 3.03(d) at least 60 days prior to the due date for the applicable tax return or report (including extensions). Holdings shall notify the Company no later than 30 days after receipt of a tax return or report of any changes recommended thereby to such return or report. The Company shall consider in good faith all reasonable comments of Holdings to such tax returns or reports. If the Company does not accept any such comment, the Company shall notify Holdings, as applicable, of that fact. If within five (5) days of such notification, Holdings requests in writing a review of a rejected comment, the Company shall cause its regular tax advisors to review the comment and consult with Holdings. The determination of the tax advisors following such review and consultation shall definitively determine the position taken on the Company’s tax return or report.

 

(e)                 Inconsistent Positions . No Member shall take a position on its income tax return with respect to any item of Company income, gain, deduction, loss or credit that is different from the position taken on the Company’s income tax return with respect to such item unless such Member notifies the Company of the different position the Member desires to take and the Company’s regular tax advisors, after consulting with the Member, are unable to provide an opinion that (after taking into account all of the relevant facts and circumstances) the arguments in favor of the Company’s position outweigh the arguments in favor of the Member’s position.

 

Section 3.04         Books and Records . The Company shall keep full and accurate books of account and other records of the Company at its principal place of business. No Equityholder (other than the Managing Member and, so long as it holds an interest in the Company, Holdings) shall have any right to inspect the books and records of the Company or any of its Subsidiaries.

 

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Article IV

PUBCO OWNERSHIP; RESTRICTIONS ON PUBCO STOCK

 

Section 4.01         Pubco Ownership .

 

(a)                 If at any time Pubco issues a share of Class A Common Stock or any other Equity Security of Pubco entitled to any economic rights (including, without limitation, in the IPO or pursuant to equity compensation plans or outstanding options, rights, warrants or other awards thereunder) (an “ Economic Pubco Security ”) with regard thereto (not including, for the avoidance of doubt, the Class B Common Stock or other Equity Security of Pubco not entitled to any economic rights with respect thereto), (i) the Company shall issue to Pubco one Nonvoting Common Unit (if Pubco issues a share of Class A Common Stock) or such other Equity Security of the Company (if Pubco issues an Economic Pubco Security other than Class A Common Stock) corresponding to the Economic Pubco Security, and with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Economic Pubco Security and (ii) the net proceeds received by Pubco with respect to the corresponding Economic Pubco Security, if any, shall be concurrently contributed to the Company; provided , however , that if Pubco issues any Economic Pubco Securities, some or all of the net proceeds of which are to be used to fund expenses or other obligations of Pubco for which Pubco would be permitted a distribution pursuant to Section 5.03(c), then Pubco shall not be required to transfer such net proceeds to the Company which are used or will be used to fund such expenses or obligations, and provided , further , that if Pubco issues any shares of Class A Common Stock in order to purchase or fund the purchase from a Non-Pubco Member of a number of Nonvoting Common Units (and shares of Class B Common Stock) or to purchase or fund the purchase of shares of Class A Common Stock, in each case equal to the number of shares of Class A Common Stock issued (including, in each case, by way of exchange), then the Company shall not issue any new Common Units in connection therewith and Pubco shall not be required to transfer such net proceeds to the Company (it being understood that such net proceeds shall instead be transferred to such Non-Pubco Member as consideration for such purchase).

 

(b)                Notwithstanding Section 4.01(a), this Article IV shall not apply (i) to the issuance and distribution to holders of shares of Pubco Common Stock of rights to purchase Equity Securities of Pubco under a “poison pill” or similar shareholders rights plan (it being understood that upon exchange of Paired Interests for Class A Common Stock pursuant to the Exchange Agreement, such Class A Common Stock will be issued together with a corresponding right) or (ii) to the issuance under the EIP or Pubco’s other employee benefit plans of any warrants, options or other rights to acquire Equity Securities of Pubco or rights or property that may be converted into or settled in Equity Securities of Pubco, but shall in each of the foregoing cases apply to the issuance of Equity Securities of Pubco in connection with the exercise or settlement of such rights, warrants, options or other rights or property.

 

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Section 4.02         Restrictions on Pubco Common Stock .

 

(a)                 Except as otherwise determined by the Managing Member in accordance with Section 4.02(d), (i) the Company may not issue any additional Nonvoting Common Units to Pubco or any of its Subsidiaries unless substantially simultaneously therewith Pubco or such Subsidiary issues or sells an equal number of shares of Class A Common Stock to another Person and (ii) the Company may not issue any other Equity Securities of the Company to Pubco or any of its Subsidiaries unless substantially simultaneously, Pubco or such Subsidiary issues or sells, to another Person, an equal number of shares of a new class or series of Equity Securities of Pubco or such Subsidiary with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of the Company.

 

(b)                Except as otherwise determined by the Managing Member in accordance with Section 4.02(d), (i) Pubco or any of its Subsidiaries may not redeem, repurchase or otherwise acquire any shares of Class A Common Stock unless substantially simultaneously the Company redeems, repurchases or otherwise acquires from Pubco an equal number of Nonvoting Common Units for the same price per security (or, if Pubco uses funds received from distributions from the Company or other funds available to Pubco that were not provided by the Company or the net proceeds from an issuance of Class A Common Stock to fund such redemption, repurchase or acquisition, then the Company shall cancel an equal number of Nonvoting Common Units for no consideration) and (ii) Pubco or any of its Subsidiaries may not redeem or repurchase any other Equity Securities of Pubco unless substantially simultaneously, the Company redeems or repurchases from Pubco an equal number of Equity Securities of the Company of a corresponding class or series with substantially the same rights to dividends and distributions (including distributions upon liquidation) or other economic rights as those of such Equity Securities of Pubco for the same price per security (or, if Pubco uses funds received from distributions from the Company or the net proceeds from an issuance of Equity Securities other than Class A Common Stock to fund such redemption, repurchase or acquisition, then the Company shall cancel an equal number of its corresponding Equity Securities for no consideration). Except as otherwise determined by the Managing Member in accordance with Section 4.02(d): (x) the Company may not redeem, repurchase or otherwise acquire Nonvoting Common Units from Pubco or any of its Subsidiaries unless substantially simultaneously Pubco or such Subsidiary redeems, repurchases or otherwise acquires an equal number of Class A Common Stock for the same price per security from holders thereof (except that if the Company cancels Nonvoting Common Units for no consideration as described in Section 4.02(b)(i), then the price per security need not be the same) and (y) the Company may not redeem, repurchase or otherwise acquire any other Equity Securities of the Company from Pubco or any of its Subsidiaries unless substantially simultaneously Pubco or such Subsidiary redeems, repurchases or otherwise acquires for the same price per security an equal number of Equity Securities of Pubco of a corresponding class or series with substantially the same rights to dividends and distributions (including dividends and distributions upon liquidation) and other economic rights as those of such Equity Securities of Pubco (except that if the Company cancels Equity Securities for no consideration as described in Section 4.02(b)(ii), then the price per security need not be the same). Notwithstanding the immediately preceding sentence, to the extent that any consideration payable to Pubco in connection with the redemption or repurchase of any shares or other Equity Securities of Pubco or any of its Subsidiaries consists (in whole or in part) of shares or such other Equity Securities (including, for the avoidance of doubt, in connection with the cashless exercise of an option or warrant), then redemption or repurchase of the corresponding Nonvoting Common Units or other Equity Securities of the Company shall be effectuated in an equivalent manner (except if the Company cancels Nonvoting Common Units or other Equity Securities for no consideration as described in this Section 4.02(b)).

 

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(c)                 The Company shall not in any manner effect any subdivision (by any stock or unit split, stock or unit dividend or distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse stock or unit split, reclassification, reorganization, recapitalization or otherwise) of the outstanding Nonvoting Common Units unless accompanied by a substantively identical subdivision or combination, as applicable, of the outstanding Class A Common Stock, with corresponding changes made with respect to any other exchangeable or convertible securities. Pubco shall not in any manner effect any subdivision (by any stock or unit split, stock or unit dividend or distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse stock or unit split, reclassification, reorganization, recapitalization or otherwise) of the outstanding Class A Common Stock unless accompanied by a substantively identical subdivision or combination of the outstanding Nonvoting Common Units, with corresponding changes made with respect to any other exchangeable or convertible securities.

 

(d)                Notwithstanding anything to the contrary in this Article IV:

 

(i)                  if at any time the Managing Member shall determine that any debt instrument of Pubco, the Company or its Subsidiaries shall not permit Pubco or the Company to comply with the provisions of Section 4.02(a) or Section 4.02(b) in connection with the issuance, redemption or repurchase of any shares of Class A Common Stock or Class B Common Stock or other Equity Securities of Pubco or any of its Subsidiaries or any Units or other Equity Securities of the Company, then the Managing Member may in good faith implement an economically equivalent alternative arrangement without complying with such provisions; provided that such arrangement shall also be subject to the prior written consent (not to be unreasonably withheld) of Holdings, so long as it holds at least a 10% Nonvoting Percentage Interest; and

 

(ii)                if (x) Pubco incurs any indebtedness and desires to transfer the proceeds of such indebtedness to the Company and (y) Pubco is unable to lend the proceeds of such indebtedness to the Company on an equivalent basis because of restrictions in any debt instrument of Pubco, the Company or its Subsidiaries, then notwithstanding Section 4.02(a) or Section 4.02(b), the Managing Member may in good faith implement an economically equivalent alternative arrangement in connection with the transfer of proceeds to the Company using non-participating preferred Equity Securities of the Company without complying with such provisions; provided that such arrangement shall also be subject to the prior written consent (not to be unreasonably withheld) of Holdings, so long as it holds at least a 10% Nonvoting Percentage Interest.

 

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Article V

CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS;
DISTRIBUTIONS; ALLOCATIONS

 

Section 5.01         Capital Contributions .

 

(a)                 From and after the date hereof, no Member shall have any obligation to the Company, to any other Member or to any creditor of the Company to make any further Capital Contribution, except as expressly provided in Section 4.01(a).

 

(b)                Except as expressly provided herein, no Member, in its capacity as a Member, shall have the right to receive any cash or any other property of the Company.

 

Section 5.02         Capital Accounts .

 

(a)                 Maintenance of Capital Accounts . The Company shall maintain a Capital Account for each Nonvoting Member on the books of the Company in accordance with the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv) and, to the extent consistent with such provisions, the following provisions:

 

(i)                  Each Nonvoting Member listed on the Member Schedule shall be credited with the Reorganization Date Capital Account Balance set forth on the Member Schedule. The Member Schedule shall be amended by the Managing Member after the closing of the IPO and from time to time to reflect adjustments to the Nonvoting Members’ Capital Accounts made in accordance with Sections 5.02(a)(ii), 5.02(a)(iii), 5.02(a)(iv), 5.02(c) or otherwise.

 

(ii)                To each Nonvoting Member’s Capital Account there shall be credited: (A) such Nonvoting Member’s Capital Contributions, (B) such Member’s distributive share of Net Income and any item in the nature of income or gain that is allocated pursuant to Section 5.04 and (C) the amount of any Company liabilities assumed by such Member or that are secured by any Property distributed to such Member.

 

(iii)              To each Nonvoting Member’s Capital Account there shall be debited: (A) the amount of money and the Carrying Value of any Property distributed to such Member pursuant to any provision of this Agreement, (B) such Member’s distributive share of Net Loss and any items in the nature of expenses or losses that are allocated to such Member pursuant to Section 5.04 and (C) the amount of any liabilities of such Member assumed by the Company or that are secured by any Property contributed by such Member to the Company.

 

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(iv)              In determining the amount of any liability for purposes of subparagraphs (ii) and (iii) above there shall be taken into account Section 752(c) of the Code and any other applicable provisions of the Code and the Treasury Regulations.

 

The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Section 1.704-1(b) and shall be interpreted and applied in a manner consistent with such Treasury Regulations. In the event that the Managing Member shall reasonably determine that it is prudent to modify the manner in which the Capital Accounts or any debits or credits thereto are maintained (including debits or credits relating to liabilities that are secured by contributed or distributed Property or that are assumed by the Company or the Members), the Managing Member may make such modification so long as such modification will not have any effect on the amounts distributed to any Person pursuant to Article XI upon the dissolution of the Company. The Managing Member also shall (i) make any adjustments that are necessary or appropriate to maintain equality between Capital Accounts of the Members and the amount of capital reflected on the Company’s balance sheet, as computed for book purposes, in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g), and (ii) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Treasury Regulations Section 1.704-1(b).

 

(b)                Succession to Capital Accounts . In the event any Person becomes a Substitute Member in accordance with the provisions of this Agreement, such Substitute Member shall succeed to the Capital Account of the former Member (the “ Transferor Member ”) to the extent such Capital Account relates to the Transferred Units.

 

(c)                 Adjustments of Capital Accounts . The Company shall revalue the Capital Accounts of the Members in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(f) (a “ Revaluation ”) at the following times: (i) immediately prior to the contribution of more than a de minimis amount of money or other property to the Company by a new or existing Member as consideration for one or more Units; (ii) the distribution by the Company to a Member of more than a de minimis amount of property in respect of one or more Units; (iii) the issuance by the Company of more than a de minimis amount of Units as consideration for the provision of services to or for the benefit of the Company (as described in Treasury Regulations Section 1.704-1(b)(2)(iv)(f)(5)(iii)); and (iv) the liquidation of the Company within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g) (other than a liquidation pursuant to Section 708(b)(1)(B) of the Code); provided , however , that adjustments pursuant to clauses (i), (ii) and (iii) above shall be made only if the Managing Member reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interest of the Members.

 

(d)                No Member shall be entitled to withdraw capital or receive distributions except as specifically provided herein. A Member shall have no obligation to the Company, to any other Member or to any creditor of the Company to restore any negative balance in the Capital Account of such Member. Except as expressly provided elsewhere herein, no interest shall be paid on the balance in any Member’s Capital Account.

 

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(e)                 Whenever it is necessary for purposes of this Agreement to determine a Member’s Capital Account on a per Unit basis, such amount shall be determined by dividing the Capital Account of such Member attributable to the applicable class of Units held of record by such Member by the number of Units of such class held of record by such Member.

 

Section 5.03         Amounts and Priority of Distributions .

 

(a)                 Distributions Generally . Except as otherwise provided in Section 11.02, distributions shall be made to the Nonvoting Members as set forth in this Section 5.03, at such times and in such amounts as the Managing Member, in its sole discretion, shall determine. For the avoidance of doubt, subject to Section 5.03(c), the Class M Members shall not be entitled to receive any distributions hereunder.

 

(b)                Distributions to the Members . Subject to Sections 5.03(e), at such times and in such amounts as the Managing Member, in its sole discretion, shall determine, distributions shall be made to the Nonvoting Members in proportion to their respective Nonvoting Percentage Interests.

 

(c)                 Pubco Distributions . Notwithstanding the provisions of Section 5.03(b), the Managing Member, in its sole discretion, may authorize that (i) cash be paid to Pubco (which payment shall be made without pro rata distributions to the other Members) in exchange for the redemption, repurchase or other acquisition of Nonvoting Common Units held by Pubco to the extent that such cash payment is used to redeem, repurchase or otherwise acquire an equal number of shares of Class A Common Stock in accordance with Section 4.02(b), and (ii) to the extent that the Managing Member determines that expenses or other obligations of Pubco are related to its role as the Managing Member or the business and affairs of Pubco that are conducted through the Company or any of the Company’s direct or indirect Subsidiaries, cash (and, for the avoidance of doubt, only cash) distributions may be made to Pubco (which distributions shall be made without pro rata distributions to the other Members) in amounts required for Pubco to pay (w) operating, administrative and other similar costs incurred by Pubco, including payments in respect of Indebtedness and preferred stock, to the extent the proceeds are used or will be used by Pubco to pay expenses or other obligations described in this clause (ii) (in either case only to the extent economically equivalent Indebtedness or Equity Securities of the Company were not issued to Pubco), payments representing interest with respect to payments not made when due under the terms of the Tax Receivable Agreement and payments pursuant to any legal, tax, accounting and other professional fees and expenses (but, for the avoidance of doubt, excluding any tax liabilities of Pubco), (x) any judgments, settlements, penalties, fines or other costs and expenses in respect of any claims against, or any litigation or proceedings involving, Pubco, (y) fees and expenses (including any underwriters discounts and commissions) related to any securities offering, investment or acquisition transaction (whether or not successful) authorized by the board of directors of Pubco and (z) other fees and expenses in connection with the maintenance of the existence of Pubco (including any costs or expenses associated with being a public company listed on a national securities exchange). For the avoidance of doubt, distributions made under this Section 5.03(c) may not be used to pay or facilitate dividends or distributions on the Pubco Common Stock and must be used solely for one of the express purposes set forth under clause (i) or (ii) of the immediately preceding sentence.

 

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(d)                Distributions in Kind . Any distributions to the Nonvoting Members in kind shall be made at such times and in such amounts as the Managing Member, in its sole discretion, shall determine based on their fair market value as determined by the Managing Member in the same proportions as if distributed in accordance with Section 5.03(b), with all Nonvoting Members participating in proportion to their respective Nonvoting Percentage Interests. If cash and property are to be distributed in kind simultaneously, the Company shall distribute such cash and property in kind in the same proportion to each Nonvoting Member.

 

(e)                 Tax Distributions .

 

(i)                  Notwithstanding any other provision of this Section 5.03 to the contrary, to the extent permitted by Applicable Law and consistent with the Company’s obligations to its creditors as reasonably determined by the Managing Member, the Company shall make cash distributions by wire transfer of immediately available funds pursuant to this Section 5.03(e)(i) to each Nonvoting Member with respect to its Nonvoting Common Units at least two (2) Business Days prior to the date on which any U.S. federal corporate estimated tax payments are due, in an amount equal to such Nonvoting Member’s Tax Distribution Amount, if any; provided that the Managing Member shall have no liability to any Member in connection with any underpayment of estimated taxes, so long as cash distributions are made in accordance with this Section 5.03(e)(i) and the Tax Distribution Amounts are determined as provided in paragraph (i) of the definition of Tax Distribution Amount.

 

(ii)                On any date that the Company makes a distribution to the Members with respect to their Nonvoting Common Units under a provision of Section 5.03 other than this Section 5.03(e), if the Tax Distribution Amount is greater than zero, the Company shall designate all or a portion of such distribution as a Tax Distribution with respect to a Member’s Nonvoting Common Units to the extent of the Tax Distribution Amount with respect to such Member’s Nonvoting Common Units as of such date (but not to exceed the amount of such distribution). For the avoidance of doubt, such designation shall be performed with respect to all Members with respect to which there is a Tax Distribution Amount as of such date.

 

(iii)              Notwithstanding any other provision of this Section 5.03 to the contrary, if the Tax Distribution Amount for such Fiscal Year is greater than zero, to the extent permitted by Applicable Law and consistent with the Company’s obligations to its creditors as reasonably determined by the Managing Member, the Company shall make additional distributions under this Section 5.03(e)(iii) to the extent of such Tax Distribution Amount for such Fiscal Year as soon as reasonably practicable after the end of such Fiscal Year (or as soon as reasonably practicable after any event that subsequently adjusts the taxable income of such Fiscal Year).

 

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(iv)              Under no circumstances shall Tax Distributions reduce the amount otherwise distributable to any Member pursuant to this Section 5.03 (other than this Section 5.03(e)) after taking into account the effect of Tax Distributions on the amount of cash or other assets available for distribution by the Company.

 

(f)                 Assignment . Holdings shall have the right to assign to any Transferee of Common Units, pursuant to a Transfer made in compliance with this Agreement, the right to receive any portion of the amounts distributable or otherwise payable to Holdings pursuant to Section 5.03(b).

 

Section 5.04         Allocations .

 

(a)                 Net Income and Net Loss . Except as otherwise provided in this Agreement, and after giving effect to the special allocations set forth in Section 5.04(b), Section 5.04(c) and Section 5.04(d), Net Income and Net Loss (and, to the extent necessary, individual items of income, gain, loss, deduction or credit) of the Company shall be allocated among the Nonvoting Members in a manner such that the Capital Account of each Nonvoting Member, immediately after making such allocation, is, as nearly as possible, equal to (i) the distributions that would be made to such Nonvoting Member pursuant to Section 5.03(b) if the Company were dissolved, its affairs wound up and its assets sold for cash equal to their Carrying Value, all Company liabilities were satisfied (limited with respect to each nonrecourse liability to the Carrying Value of the assets securing such liability), and the net assets of the Company were distributed, in accordance with Section 5.03(b), to the Nonvoting Members immediately after making such allocation, minus (ii) such Nonvoting Member’s share of Company Minimum Gain and Member Nonrecourse Debt Minimum Gain, computed immediately prior to the hypothetical sale of assets.

 

(b)                Special Allocations . The following special allocations shall be made in the following order:

 

(i)                  Minimum Gain Chargeback . Except as otherwise provided in Treasury Regulations Section 1.704-2(f), notwithstanding any other provision of this Article V, if there is a net decrease in Company Minimum Gain during any Fiscal Year, each Nonvoting Member shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Nonvoting Member’s share of the net decrease in Company Minimum Gain, determined in accordance with Treasury Regulations Section 1.704-2(g). Allocations pursuant to the immediately preceding sentence shall be made in proportion to the respective amounts required to be allocated to each Nonvoting Member pursuant thereto. The items to be so allocated shall be determined in accordance with Treasury Regulations Section 1.704-2(f)(6) and 1.704-2(j)(2). This Section 5.04(b)(i) is intended to comply with the minimum gain chargeback requirement in Treasury Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.

 

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(ii)                Member Minimum Gain Chargeback . Except as otherwise provided in Treasury Regulations Section 1.704-2(i)(4), notwithstanding any other provision of this Article V, if there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt during any Fiscal Year, each Nonvoting Member who has a share of the Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulations Section 1.704-2(i)(5), shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Nonvoting Member’s share of the net decrease in Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Nonvoting Member pursuant thereto. The items to be so allocated shall be determined in accordance with Treasury Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 5.04(b)(ii) is intended to comply with the minimum gain chargeback requirement in Treasury Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

 

(iii)              Qualified Income Offset . In the event any Nonvoting Member unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or Section 1.704-1(b)(2)(ii)(d)(6), items of Company income and gain shall be specially allocated to such Nonvoting Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of the Nonvoting Member as promptly as possible; provided that an allocation pursuant to this Section 5.04(b)(iii) shall be made only if and to the extent that the Nonvoting Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article V have been tentatively made as if this Section 5.04(b)(iii) were not in the Agreement.

 

(iv)              Nonrecourse Deductions . Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Members in a manner determined by the Managing Member consistent with Treasury Regulations Sections 1.704-2(b) and 1.704-2(c).

 

(v)                Member Nonrecourse Deductions . Any Member Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Nonvoting Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulations Sections 1.704-2(i)(1) and 1.704-2(j)(1).

 

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(vi)              Section 754 Adjustments . (A) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Sections 734(b) or 743(b) of the Code is required pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Nonvoting Member’s interest in the Company, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of such asset) or loss (if the adjustment decreases the basis of such asset) from the disposition of the asset and shall be taken into account for purposes of computing Net Income and Net Loss. (B) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Sections 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as the result of a distribution to a Nonvoting Member in complete liquidation of such Nonvoting Member’s interest in the Company, the amount of such adjustment to 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 specially allocated to such Nonvoting Members in accordance with their interests in the Company in the event Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Nonvoting Member to whom such distribution was made in the event Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

 

(c)                 Curative Allocations . The allocations set forth in Section 5.04(b)(i) through Section 5.04(b)(vi) and Section 5.04(d) (the “ Regulatory Allocations ”) are intended to comply with certain requirements of the Treasury Regulations. It is the intent of the Nonvoting Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Company income, gain, loss, or deduction pursuant to this Section 5.04(c). Therefore, notwithstanding any other provision of this Article V (other than the Regulatory Allocations), the Managing Member shall make such offsetting special allocations of Company income, gain, loss, or deduction in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Nonvoting Member’s Capital Account balance is, to the extent possible, equal to the Capital Account balance such Nonvoting Member would have had if the Regulatory Allocations were not part of the Agreement and all Company items were allocated pursuant to Section 5.04.

 

(d)                Loss Limitation . Net Loss (or individual items of loss or deduction) allocated pursuant to Section 5.04 hereof shall not exceed the maximum amount of Net Loss (or individual items of loss or deduction) that can be allocated without causing any Nonvoting Member to have an Adjusted Capital Account Deficit at the end of any Fiscal Year. In the event some but not all of the Nonvoting Members would have Adjusted Capital Account Deficits as a consequence of an allocation of Net Loss (or individual items of loss or deduction) pursuant to Section 5.04 hereof, the limitation set forth in this Section 5.04(d) shall be applied on a Member by Member basis and Net Loss (or individual items of loss or deduction) not allocable to any Nonvoting Member as a result of such limitation shall be allocated to the other Nonvoting Members in accordance with the positive balances in such Nonvoting Members’ Capital Accounts so as to allocate the maximum permissible Net Loss to each Nonvoting Member under Treasury Regulations Section 1.704-1(b)(2)(ii)(d). Any reallocation of Net Loss pursuant to this Section 5.04(d) shall be subject to chargeback pursuant to the curative allocation provision of Section 5.04(c).

 

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Section 5.05         Other Allocation Rules .

 

(a)                 Interim Allocations Due to Percentage Adjustment . If a Nonvoting Percentage Interest is the subject of a Transfer or the Nonvoting Members’ interests in the Company change pursuant to the terms of the Agreement during any Fiscal Year, the amount of Net Income and Net Loss (or items thereof) to be allocated to the Nonvoting Members for such entire Fiscal Year shall be allocated to the portion of such Fiscal Year which precedes the date of such Transfer or change (and if there shall have been a prior Transfer or change in such Fiscal Year, which commences on the date of such prior Transfer or change) and to the portion of such Fiscal Year which occurs on and after the date of such Transfer or change (and if there shall be a subsequent Transfer or change in such Fiscal Year, which precedes the date of such subsequent Transfer or change) in accordance with Section 706 of the Code and the regulations thereunder as determined by the Managing Member and the amounts of the items so allocated to each such portion shall be credited or charged to the Members in accordance with Section 5.04 as in effect during each such portion of the Fiscal Year in question. As of the date of such Transfer, the Transferee Member shall succeed to the Capital Account of the Transferor Member with respect to the transferred Units.

 

(b)                Tax Allocations: Code Section 704(c) . In accordance with Section 704(c) of the Code and the Treasury Regulations thereunder, income, gain, loss, and deduction with respect to any Property contributed to the capital of the Company and with respect to reverse Code Section 704(c) allocations described in Treasury Regulations 1.704-3(a)(6) shall, solely 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 initial Carrying Value or its Carrying Value determined pursuant to Treasury Regulation 1.704-1(b)(2)(iv)(f) (computed in accordance with the definition of Carrying Value) using the traditional allocation method under Treasury Regulation 1.704-3(b). Any elections or other decisions relating to such allocations shall be made by the Managing Member in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to this Section 5.05(b), Section 704(c) of the Code (and the principles thereof), and Treasury Regulation 1.704-1(b)(4)(i) 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 Nonvoting Member’s Capital Account or share of Net Income, Net Loss, other items, or distributions pursuant to any provision of this Agreement.

 

Section 5.06         Tax Withholding; Withholding Advances .

 

(a)                 Tax Withholding .

 

(i)                  If requested by the Managing Member, each Nonvoting Member shall, if able to do so, deliver to the Managing Member: (A) an affidavit in form satisfactory to the Company that the applicable Nonvoting Member (or its partners, as the case may be) is not subject to withholding under the provisions of any federal, state, local, foreign or other law; (B) any certificate that the Company may reasonably request with respect to any such laws; and/or (C) any other form or instrument reasonably requested by the Company relating to any Nonvoting Member’s status under such law. In the event that a Nonvoting Member fails or is unable to deliver to the Company an affidavit described in subclause (A) of this clause (i), the Company may withhold amounts from such Nonvoting Member in accordance with Section 5.06(b).

 

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(ii)                After receipt of a written request of any Nonvoting Member, the Company shall provide such information to such Nonvoting Member and take such other action as may be reasonably necessary to assist such Nonvoting Member in making any necessary filings, applications or elections to obtain any available exemption from, or any available refund of, any withholding imposed by any foreign taxing authority with respect to amounts distributable or items of income allocable to such Nonvoting Member hereunder to the extent not adverse to the Company or any Member. In addition, the Company shall, at the request of any Nonvoting Member, make or cause to be made (or cause the Company to make) any such filings, applications or elections; provided that any such requesting Nonvoting Member shall cooperate with the Company, with respect to any such filing, application or election to the extent reasonably determined by the Company and that any filing fees, taxes or other out-of-pocket expenses reasonably incurred and related thereto shall be paid and borne by such requesting Nonvoting Member or, if there is more than one requesting Nonvoting Member, by such requesting Nonvoting Members in accordance with their Relative Percentage Interests.

 

(b)                Withholding Advances . To the extent the Company is required by Applicable Law to withhold or to make tax payments on behalf of or with respect to any Nonvoting Member (e.g., backup withholding) (“ Withholding Advances ”), the Company may withhold such amounts and make such tax payments as so required.

 

(c)                 Repayment of Withholding Advances . All Withholding Advances made on behalf of a Nonvoting Member, plus interest thereon at a rate equal to the Prime Rate as of the date of such Withholding Advances plus 2.0% per annum, shall (i) be paid on demand by the Nonvoting Member on whose behalf such Withholding Advances were made (it being understood that no such payment shall increase such Member’s Capital Account), or (ii) with the consent of the Managing Member and the affected Member be repaid by reducing the amount of the current or next succeeding distribution or distributions that would otherwise have been made to such Nonvoting Member or, if such distributions are not sufficient for that purpose, by so reducing the proceeds of liquidation otherwise payable to such Nonvoting Member. Whenever repayment of a Withholding Advance by a Nonvoting Member is made as described in clause (ii) of this Section 5.06(c), for all other purposes of this Agreement such Nonvoting Member shall be treated as having received all distributions (whether before or upon any Dissolution Event) unreduced by the amount of such Withholding Advance and interest thereon.

 

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(d)                Withholding Advances — Reimbursement of Liabilities . Each Nonvoting Member hereby agrees to reimburse the Company for any liability with respect to Withholding Advances (including interest thereon) required or made on behalf of or with respect to such Nonvoting Member (including penalties imposed with respect thereto).

 

Article VI

CERTAIN TAX MATTERS

 

Section 6.01         Tax Matters Partner . The “ Tax Matters Partner ” (as such term is defined in Section 6231(a)(7) of the Code) of the Company shall be selected by the Managing Member with the initial Tax Matters Partner being Pubco. The Tax Matters Partner shall use its reasonable efforts to comply with the responsibilities outlined in Sections 6221 through 6233 of the Code (including the Treasury Regulations promulgated thereunder) and shall have any powers necessary to perform fully in such capacity. The Tax Matters Partner is authorized to represent the Company before taxing authorities and courts in tax matters affecting the Company and the Members in their capacity as such and shall keep the Members promptly informed of any such administrative and judicial proceedings; provided that Holdings shall be entitled to participate with the Tax Matters Partner in any tax matters that would reasonably be expected to have a materially adverse effect on Holdings (or any beneficial owners of Holdings). The Tax Matters Partner shall be entitled to be reimbursed by the Company for all reasonable third-party costs and expenses incurred by it in connection with any administrative or judicial proceeding affecting tax matters of the Company and the Members in their capacity as such. The Tax Matters Partner shall not bind any Member to any settlement agreement or closing agreement without such Member’s prior written consent. Any Member who enters into a settlement agreement with any tax authority with respect to any Company item shall notify the Tax Matters Partner of such settlement agreement and its terms within thirty (30) days after the date of settlement. This provision shall survive any termination of this Agreement.

 

Section 6.02         Section 754 Election . The Company shall make a timely election under Section 754 of the Code (and a corresponding election under state and local law) effective starting with the taxable year ended December 31, 2015, and the Managing Member shall not take any action to revoke such election.

 

Article VII

MANAGEMENT OF THE COMPANY

 

Section 7.01         Management by the Managing Member . Except as otherwise specifically set forth in this Agreement, the Managing Member shall be deemed to be a “manager” for purposes of applying the Delaware Act. Except as expressly provided in this Agreement or the Delaware Act, the day-to-day business and affairs of the Company and its Subsidiaries shall be managed, operated and controlled by the Managing Member in accordance with the terms of this Agreement and no other Members shall have management authority or rights over the Company or its Subsidiaries. The Managing Member is, to the extent of its rights and powers set forth in this Agreement, an agent of the Company for the purpose of the Company’s and its Subsidiaries’ business, and the actions of the Managing Member taken in accordance with such rights and powers, shall bind the Company (and no other Members shall have such right). Except as expressly provided in this Agreement, the Managing Member shall have all necessary powers to carry out the purposes, business, and objectives of the Company and its Subsidiaries. The Managing Member may delegate to Members, employees, officers or agents of the Company or any Subsidiary in its discretion the authority to sign agreements and other documents on behalf of the Company or any Subsidiary.

 

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Section 7.02         Withdrawal of the Managing Member . Pubco may withdraw as the Managing Member and appoint as its successor at any time upon written notice to the Company (i) any wholly-owned Subsidiary of Pubco, (ii) any Person of which Pubco is a wholly-owned Subsidiary, (iii) any Person into which Pubco is merged or consolidated or (iv) any transferee of all or substantially all of the assets of Pubco, which withdrawal and replacement shall be effective upon the delivery of such notice. No appointment of a Person other than Pubco (or its successor, as applicable) as Managing Member shall be effective unless Pubco (or its successor, as applicable) and the new Managing Member (as applicable) provide all other Members with contractual rights, directly enforceable by such other Members against the new Managing Member, to cause the new Managing Member to comply with all the Managing Member’s obligations under this Agreement and the Exchange Agreement.

 

Section 7.03         Decisions by the Members .

 

(a)                 Other than the Managing Member, the Members shall take no part in the management of the Company’s business, shall transact no business for the Company and shall have no power to act for or to bind the Company; provided , however , that the Company may engage any Member or principal, partner, member, shareholder or interest holder thereof as an employee, independent contractor or consultant to the Company, in which event the duties and liabilities of such individual or firm with respect to the Company as an employee, independent contractor or consultant shall be governed by the terms of such engagement with the Company.

 

(b)                Except as expressly provided herein (including with respect to any special approval rights granted to Holdings hereunder), no Members (other than Pubco in its capacity as the Class M Member) nor any class of Members (other than the Class M Common Units) shall have any voting rights nor the power or authority to vote, approve or consent to any matter or action taken by the Company. Except as otherwise provided herein, any proposed matter or action subject to the vote, approval or consent of the Members shall require the approval of the Class M Member.

 

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Section 7.04         [Reserved] .

 

Section 7.05         Officers .

 

(a)                 Appointment of Officers . The Managing Member may appoint individuals as officers (“ Officers ”) of the Company, which may include such officers as the Managing Member determines are necessary and appropriate. No Officer need be a Member. An individual may be appointed to more than one office.

 

(b)                Authority of Officers . The Officers shall have the duties, rights, powers and authority as may be prescribed by the Managing Member from time to time.

 

(c)                 Removal, Resignation and Filling of Vacancy of Officers . The Managing Member may remove any Officer, for any reason or for no reason, at any time. Any Officer may resign at any time by giving written notice to the Company, and such resignation shall take effect at the date of the receipt of that notice or any later time specified in that notice; provided that, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any such resignation shall be without prejudice to the rights, if any, of the Company or such Officer under this Agreement. A vacancy in any office because of death, resignation, removal or otherwise shall be filled by the Managing Member.

 

Article VIII

TRANSFERS OF INTERESTS

 

Section 8.01         Restrictions on Transfers .

 

(a)                 Except as expressly permitted by Section 8.02, and subject to Section 8.01(b), Section 8.01(c), and Section 8.01(d), any underwriter lock-up agreement applicable to such Member, and/or any other agreement between such Member and the Company, Pubco or any of their controlled Affiliates, without the prior written approval of the Managing Member, no Member shall directly or indirectly Transfer all or any part of its Units or any right or economic interest pertaining thereto, including the right to vote or consent on any matter or to receive or have any economic interest in distributions or advances from the Company pursuant thereto. Any such Transfer which is not in compliance with the provisions of this Agreement shall be deemed a Transfer by such Member of Units in violation of this Agreement (and a breach of this Agreement by such Member) and shall be null and void ab initio . Notwithstanding anything to the contrary in this Article VIII, (i) the Exchange Agreement shall govern the exchange of Paired Interests for shares of Class A Common Stock, and an exchange pursuant to and in accordance with the Exchange Agreement shall not be considered a “Transfer” for purposes of this Agreement, (ii) a Transfer of Registrable Securities (as such term is defined in the Investor Rights Agreement) in accordance with the Investor Rights Agreement shall not be considered a “Transfer” for the purposes of the Agreement, and (iii) any other Transfer of shares of Class A Common Stock shall not be considered a “Transfer” for purposes of this Agreement.

 

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(b)                Except as otherwise expressly provided herein, it shall be a condition precedent to any Transfer otherwise permitted or approved pursuant to this Article VIII that:

 

(i)                the Transferor shall have provided to the Company prior notice of such Transfer;

 

(ii)               the Transfer shall comply with all Applicable Laws; and

 

(iii)              with respect to any Transfer of any Nonvoting Common Unit that constitutes a portion of a Paired Interest, concurrently with such Transfer, such Transferor shall also Transfer to such Transferee the number of shares of Class B Common Stock constituting the remainder of such Paired Interest (which, as of the date hereof, would be one share of Class B Common Stock).

 

(c)                 Notwithstanding any other provision of this Agreement to the contrary, no Member shall directly or indirectly Transfer all or any part of its Units or any right or economic interest pertaining thereto if such Transfer, in the reasonable discretion of the Managing Member, would cause the Company to be classified as a “publicly traded partnership” as that term is defined in Section 7704 of the Code and Regulations promulgated thereunder.

 

(d)                Any Transfer of Units pursuant to this Agreement, including this Article VIII, shall be subject to the provisions of Section 3.01 and Section 3.02.

 

Section 8.02         Certain Permitted Transfers . Notwithstanding anything to the contrary herein, the following Transfers shall be permitted:

 

(a)                 Any Transfer by any Member of its Units pursuant to a Pubco Offer (as such term is defined in the Exchange Agreement) or Disposition Event;

 

(b)                 Any Transfer of Units pursuant to a pledge agreement or other security document entered into by a Member (or direct or indirect parent of such Member) controlled directly or indirectly by MacAndrews & Forbes Incorporated, including any exercise of foreclosure sale or other remedies thereunder; provided, that no such Transfer shall be permitted if the Managing Member reasonably determines that such Transfer would materially increase the risk that the Company would be classified as a “publicly traded partnership” as that term is defined in Section 7704 of the Code and Regulations promulgated thereunder; or

 

(c)                At any time, any Transfer by any Member of Units to any Transferee approved in writing by the Managing Member (not to be unreasonably withheld), it being understood that it shall be reasonable for the Managing Member to withhold such consent if the Managing Member reasonably determines that such Transfer would materially increase the risk that (i) the Company would be classified as a “publicly traded partnership” as that term is defined in Section 7704 of the Code and Regulations promulgated thereunder or (ii) the Company would be required to register a class of securities under the Exchange Act.

 

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Section 8.03         Registration of Transfers . When any Units are Transferred in accordance with the terms of this Agreement, the Company shall cause such Transfer to be registered on the books of the Company.

 

Article IX

[RESERVED]

 

Article X

LIMITATION ON LIABILITY, EXCULPATION
AND INDEMNIFICATION

 

Section 10.01     Limitation on Liability . The debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and no Covered Person shall be obligated personally for any such debt, obligation or liability of the Company; provided that the foregoing shall not alter a Member’s obligation to return funds wrongfully distributed to it.

 

Section 10.02     Exculpation and Indemnification .

 

(a)                 Neither the Managing Member nor any other Covered Person described in clause (iii) of the definition thereof shall be liable, including under any legal or equitable theory of fiduciary duty or other theory of liability, to the Company or to any other Covered Person for any losses, claims, damages or liabilities incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company. There shall be, and each Covered Person shall be entitled to, a presumption that such Covered Person acted in good faith.

 

(b)                A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any Person as to matters the Covered Person reasonably believes are within such Person’s professional or expert competence.

 

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(c)                 The Company shall indemnify, defend and hold harmless each Covered Person against any losses, claims, damages, liabilities, expenses (including all reasonable out-of-pocket fees and expenses of counsel and other advisors), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, in which such Covered Person may be involved or become subject to, in connection with any matter arising out of or in connection with the Company’s business or affairs, or this Agreement or any related document, unless such loss, claim, damage, liability, expense, judgment, fine, settlement or other amount (i) is as a result of a Covered Person not acting in good faith on behalf of the Company or arose as a result of the willful commission by such Covered Person of any act that is dishonest and materially injurious to the Company, (ii) results from its contractual obligations under any Reorganization Document to be performed in a capacity other than as a Covered Person or (iii) results from the breach by any Member (in such capacity) of its contractual obligations under this Agreement. If any Covered Person becomes involved in any capacity in any action, suit, proceeding or investigation in connection with any matter arising out of or in connection with the Company’s business or affairs, or this Agreement or any related document (other than any Reorganization Document), other than by reason of any act or omission performed or omitted by such Covered Person that was not in good faith on behalf of the Company or constituted a willful commission by such Covered Person of an act that is dishonest and materially injurious to the Company, the Company shall reimburse such Covered Person for its reasonable legal and other reasonable out-of-pocket expenses (including the cost of any investigation and preparation) as they are incurred in connection therewith; provided that such Covered Person shall promptly repay to the Company the amount of any such reimbursed expenses paid to it if it shall be finally judicially determined that such Covered Person was not entitled to indemnification by, or contribution from, the Company in connection with such action, suit, proceeding or investigation. If for any reason (other than the bad faith of a Covered Person or the willful commission by such Covered Person of an act that is dishonest and materially injurious to the Company) the foregoing indemnification is unavailable to such Covered Person, or insufficient to hold it harmless, then the Company shall contribute to the amount paid or payable by such Covered Person as a result of such loss, claim, damage, liability, expense, judgment, fine, settlement or other amount in such proportion as is appropriate to reflect any relevant equitable considerations. There shall be, and each Covered Person shall be entitled to, a rebuttable presumption that such Covered Person acted in good faith.

 

(d)                The obligations of the Company under Section 10.02(c) shall be satisfied solely out of and to the extent of the Company’s assets, and no Covered Person shall have any personal liability on account thereof.

 

34
 

(e)                 Given that certain Jointly Indemnifiable Claims may arise by reason of the service of a Covered Person to the Company and/or as a director, trustee, officer, partner, member, manager, employee, consultant, fiduciary or agent of other corporations, limited liability companies, partnerships, joint ventures, trusts, employee benefit plans or other enterprises controlled by the Company (collectively, the “ Controlled Entities ”), or by reason of any action alleged to have been taken or omitted in any such capacity, the Company acknowledges and agrees that the Company shall, and to the extent applicable shall cause the Controlled Entities to, be fully and primarily responsible for the payment to the Covered Person in respect of indemnification or advancement of all out-of-pocket costs of any type or nature whatsoever (including, without limitation, all attorneys’ fees and related disbursements) in each case, actually and reasonably incurred by or on behalf of a Covered Person in connection with either the investigation, defense or appeal of a claim, demand, action, suit or proceeding or establishing or enforcing a right to indemnification under this Agreement or otherwise incurred in connection with a claim that is indemnifiable hereunder (collectively, “ Expenses ”) in connection with any such Jointly Indemnifiable Claim, pursuant to and in accordance with (as applicable) the terms of (i) the Delaware Act, (ii) this Agreement, (iii) any other agreement between the Company or any Controlled Entity and the Covered Person pursuant to which the Covered Person is indemnified, (iv) the laws of the jurisdiction of incorporation or organization of any Controlled Entity and/or (v) the certificate of incorporation, certificate of organization, bylaws, partnership agreement, operating agreement, certificate of formation, certificate of limited partnership, certificate of qualification or other organizational or governing documents of any Controlled Entity ((i) through (v) collectively, the “ Indemnification Sources ”), irrespective of any right of recovery the Covered Person may have from the Indemnitee-Related Entities. Under no circumstance shall the Company or any Controlled Entity be entitled to any right of subrogation or contribution by the Indemnitee-Related Entities and no right of advancement or recovery the Covered Person may have from the Indemnitee-Related Entities shall reduce or otherwise alter the rights of the Covered Person or the obligations of the Company or any Controlled Entity under the Indemnification Sources. In the event that any of the Indemnitee-Related Entities shall make any payment to the Covered Person in respect of indemnification or advancement of Expenses with respect to any Jointly Indemnifiable Claim, (i) the Company shall, and to the extent applicable shall cause the Controlled Entities to, reimburse the Indemnitee-Related Entity making such payment to the extent of such payment promptly upon written demand from such Indemnitee-Related Entity, (ii) to the extent not previously and fully reimbursed by the Company and/or any Controlled Entity pursuant to clause (i), the Indemnitee-Related Entity making such payment shall be subrogated to the extent of the outstanding balance of such payment to all of the rights of recovery of the Covered Person against the Company and/or any Controlled Entity, as applicable, and (iii) the Covered Person shall execute all papers reasonably required and shall do all things that may be reasonably necessary to secure such rights, including the execution of such documents as may be necessary to enable the Indemnitee-Related Entities effectively to bring suit to enforce such rights. The Company and the Covered Person agree that each of the Indemnitee-Related Entities shall be third-party beneficiaries with respect to this Section 10.02(e), entitled to enforce this Section 10.02(e) as though each such Indemnitee-Related Entity were a party to this Agreement. The Company shall cause each of the Controlled Entities to perform the terms and obligations of this Section 10.02(e) as though each such Controlled Entity was the “Company” under this Agreement. For purposes of this Section 10.02(e), the following terms shall have the following meanings:

 

(i)                  The term “ Indemnitee-Related Entities ” means any corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise (other than the Company, any Controlled Entity or the insurer under and pursuant to an insurance policy of the Company or any Controlled Entity) from whom a Covered Person may be entitled to indemnification or advancement of Expenses with respect to which, in whole or in part, the Company or any Controlled Entity may also have an indemnification or advancement obligation.

 

(ii)                The term “ Jointly Indemnifiable Claims ” shall be broadly construed and shall include, without limitation, any claim, demand, action, suit or proceeding for which the Covered Person shall be entitled to indemnification or advancement of Expenses from both (i) the Company and/or any Controlled Entity pursuant to the Indemnification Sources, on the one hand, and (ii) any Indemnitee-Related Entity pursuant to any other agreement between any Indemnitee-Related Entity and the Covered Person pursuant to which the Covered Person is indemnified, the laws of the jurisdiction of incorporation or organization of any Indemnitee-Related Entity and/or the certificate of incorporation, certificate of organization, bylaws, partnership agreement, operating agreement, certificate of formation, certificate of limited partnership or other organizational or governing documents of any Indemnitee-Related Entity, on the other hand.

 

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Article XI

DISSOLUTION AND TERMINATION

 

Section 11.01     Dissolution .

 

(a)                 The Company shall not be dissolved by the admission of Additional Members or Substitute Members pursuant to Section 3.02.

 

(b)                No Member shall (i) resign from the Company prior to the dissolution and winding up of the Company except in connection with a Transfer of Units pursuant to the terms of this Agreement or (ii) take any action to dissolve, terminate or liquidate the Company or to require apportionment, appraisal or partition of the Company or any of its assets, or to file a bill for an accounting, except as specifically provided in this Agreement, and each Member, to the fullest extent permitted by Applicable Law, hereby waives any rights to take any such actions under Applicable Law, including any right to petition a court for judicial dissolution under Section 18-802 of the Delaware Act.

 

(c)                 The Company shall be dissolved and its business wound up only upon the earliest to occur of any one of the following events (each a “ Dissolution Event ”):

 

(i)                  The expiration of forty-five (45) days after the sale or other disposition of all or substantially all the assets of the Company; or

 

(ii)                upon the approval of the Managing Member.

 

(d)                The death, retirement, resignation, expulsion, bankruptcy, insolvency or dissolution of a Member or the occurrence of any other event that terminates the continued membership of a Member of the Company shall not in and of itself cause dissolution of the Company.

 

Section 11.02     Winding Up of the Company .

 

(a)                 The Managing Member shall promptly notify the other Members of any Dissolution Event. Upon dissolution, the Company’s business shall be liquidated in an orderly manner. The Managing Member shall appoint a liquidating trustee to wind up the affairs of the Company pursuant to this Agreement. In performing its duties, the liquidating trustee is authorized to sell, distribute, exchange or otherwise dispose of the assets of the Company in accordance with the Delaware Act and in any reasonable manner that the liquidating trustee shall determine to be in the best interest of the Members.

 

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(b)                The proceeds of the liquidation of the Company shall be distributed in the following order and priority:

 

(i)                  first , to the creditors (including any Members or their respective Affiliates that are creditors) of the Company in satisfaction of all of the Company’s liabilities (whether by payment or by making reasonable provision for payment thereof, including the setting up of any reserves which are, in the judgment of the liquidating trustee, reasonably necessary therefor); and

 

(ii)                second , to the Nonvoting Members in the same manner as distributions under Section 5.03(b), subject to Section 5.03(e).

 

(c)                 Distribution of Property . In the event it becomes necessary in connection with the liquidation of the Company to make a distribution of Property in-kind, subject to the priority set forth in Section 11.02, the liquidating trustee shall have the right to compel each Nonvoting Member to accept a distribution of any Property in-kind (with such Property, as a percentage of the total liquidating distributions to such Nonvoting Member, corresponding as nearly as possible to such Nonvoting Member’s Nonvoting Percentage Interest), with such distribution being based upon the amount of cash that would be distributed to such Members if such Property were sold for an amount of cash equal to the fair market value of such Property, as determined by the liquidating trustee in good faith, subject to the last sentence of Section 5.03(d).

 

Section 11.03     Termination . The Company shall terminate when all of the assets of the Company, after payment of or reasonable provision for the payment of all debts and liabilities of the Company, shall have been distributed to the Members in the manner provided for in this Article XI, and the certificate of formation of the Company shall have been cancelled in the manner required by the Delaware Act.

 

Section 11.04     Survival . Termination, dissolution, liquidation or winding up of the Company for any reason shall not release any party from any liability which at the time of such termination, dissolution, liquidation or winding up already had accrued to any other party or which thereafter may accrue in respect to any act or omission prior to such termination, dissolution, liquidation or winding up.

 

Article XII

MISCELLANEOUS

 

Section 12.01     Expenses . All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such cost or expense.

 

37
 

Section 12.02     Further Assurances . Each Member agrees to execute, acknowledge, deliver, file and record such further certificates, amendments, instruments and documents, and to do all such other acts and things, as may be required by Applicable Law or as, in the reasonable judgment of the Managing Member, may be necessary or advisable to carry out the intent and purposes of this Agreement.

 

Section 12.03     Notices . All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission and electronic mail (“ e-mail ”) transmission, so long as a receipt of such e-mail is requested and received) and shall be given to such party at the address, facsimile number or e-mail address specified for such party on the Member Schedule hereto, or to such other address or facsimile number as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. on a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed to have been received on the next succeeding Business Day in the place of receipt.

 

Section 12.04     Binding Effect; Benefit; Assignment .

 

(a)                 The provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. No provision of this Agreement is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the parties hereto and their respective successors and assigns.

 

(b)                Except as provided in Article VIII, no Member may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the Managing Member.

 

Section 12.05     Jurisdiction .

 

(a)                 The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby (whether brought by any party or any of its Affiliates or against any party or any of its Affiliates) shall be brought in the Delaware Court of Chancery or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 12.03 shall be deemed effective service of process on such party.

 

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(b)                EACH OF THE COMPANY AND THE MEMBERS HEREBY IRREVOCABLY DESIGNATES CORPORATION SERVICE COMPANY (IN SUCH CAPACITY, THE “ PROCESS AGENT ”), WITH AN OFFICE AT 2711 CENTERVILLE ROAD, SUITE 400, WILMINGTON, NEW CASTLE COUNTY, DELAWARE 19808, AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, FOR AND ON ITS BEHALF SERVICE OF PROCESS IN SUCH JURISDICTION IN ANY LEGAL ACTION OR PROCEEDINGS WITH RESPECT TO THIS AGREEMENT OR ANY OTHER AGREEMENT EXECUTED IN CONNECTION WITH THIS AGREEMENT, AND SUCH SERVICE SHALL BE DEEMED COMPLETE UPON DELIVERY THEREOF TO THE PROCESS AGENT; PROVIDED THAT IN THE CASE OF ANY SUCH SERVICE UPON THE PROCESS AGENT, THE PARTY EFFECTING SUCH SERVICE SHALL ALSO DELIVER A COPY THEREOF TO EACH OTHER SUCH PARTY IN THE MANNER PROVIDED IN SECTION 12.03 OF THIS AGREEMENT. EACH PARTY SHALL TAKE ALL SUCH ACTION AS MAY BE NECESSARY TO CONTINUE SAID APPOINTMENT IN FULL FORCE AND EFFECT OR TO APPOINT ANOTHER AGENT SO THAT SUCH PARTY SHALL AT ALL TIMES HAVE AN AGENT FOR SERVICE OF PROCESS FOR THE ABOVE PURPOSES IN WILMINGTON, DELAWARE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE PROCESS IN ANY MANNER PERMITTED BY APPLICABLE LAW. EACH PARTY EXPRESSLY ACKNOWLEDGES THAT THE FOREGOING WAIVER IS INTENDED TO BE IRREVOCABLE UNDER THE LAWS OF THE STATE OF DELAWARE AND OF THE UNITED STATES OF AMERICA.

 

Section 12.06     WAIVER OF JURY TRIAL . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 12.07     Counterparts . This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Until and unless each party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).

 

Section 12.08     Entire Agreement . This Agreement and the Reorganization Documents constitute the entire agreement between the parties with respect to the subject matter of this Agreement and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement. Nothing in this Agreement shall create any third-party beneficiary rights in favor of any Person or other party, except to the extent provided herein with respect to Indemnitee-Related Entities, each of whom are intended third-party beneficiaries of those provisions that specifically relate to them with the right to enforce such provisions as if they were a party hereto.

 

39
 

Section 12.09     Severability . If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.

 

Section 12.10     Amendment .

 

(a)                 This Agreement can be amended at any time and from time to time by the Managing Member; provided , in addition to the approval of the Managing Member, no amendment to this Agreement may adversely modify in any material respect the Units (or the rights, preferences or privileges of the Units) then held by any Members in any materially disproportionate manner to those then held by any other Members without the prior written consent of a majority in interest of such disproportionately affected Member or Members.

 

(b)                For the avoidance of doubt: (i) the Managing Member, acting alone, may amend this Agreement, including the Member Schedule, (x) to reflect the admission of new Members or Transfers of Units, each as provided by and in accordance with, the terms of this Agreement, (y) to effect any subdivisions or combinations of Units made in compliance with Section 4.02(c) and (z) to issue additional Nonvoting Common Units or any new class of Units (whether or not pari passu with the Nonvoting Common Units) in accordance with the terms of this Agreement and to provide that the Members being issued such new Units be entitled to the rights provided to Holdings with respect to all or a portion of the provisions applicable thereto hereunder and any other rights that do not diminish or eliminate any of the express rights of Holdings described herein; and (ii) any merger, consolidation or other business combination that constitutes a Disposition Event in which the Non-Pubco Members are required to exchange all of their Paired Interests pursuant to Section 2.03(b) of the Exchange Agreement and receive consideration in such Disposition Event in accordance with the terms of this Agreement and the Exchange Agreement as in effect immediately prior to the consummation of such Disposition Event shall not be deemed an amendment hereof; provided , that such amendment is only effective upon consummation of such Disposition Event.

 

(c)                 No waiver of any provision or default under, nor consent to any exception to, the terms of this Agreement or any agreement contemplated hereby shall be effective unless in writing and signed by the party to be bound and then only to the specific purpose, extent and instance so provided.

 

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Section 12.11     Confidentiality .

 

(a)                 Holdings, Pubco and each other Member (collectively the “ Equityholders ”) shall, and shall direct those of its Affiliates and their respective directors, officers, members, stockholders, partners, employees, attorneys, accountants, consultants, trustees and other advisors (the “ Equityholder Parties ”) who have access to Confidential Information to, keep confidential and not disclose any Confidential Information to any Person other than a Equityholder Party who agrees to keep such Confidential Information confidential in accordance with this Section 12.11, in each case without the express consent, in the case of Confidential Information acquired from the Company, of the Managing Member or, in the case of Confidential Information acquired from another Equityholder, such other Equityholder, unless:

 

(i)                  such disclosure shall be required by Applicable Law;

 

(ii)                such disclosure is reasonably required in connection with any tax audit involving the Company or any Equityholder or its Affiliates;

 

(iii)              such disclosure is reasonably required in connection with any litigation against or involving the Company or any Equityholder; or

 

(iv)              such disclosure is reasonably required in connection with any proposed Transfer of all or any part of such Member’s Units in the Company; provided that with respect to any such use of any Confidential Information referred to in this clause (iv), advance notice must be given to the Managing Member so that it may require any proposed Transferee that is not a Member to enter into a confidentiality agreement with terms substantially similar to the terms of this Section 12.11 (excluding this clause (iv)) prior to the disclosure of such Confidential Information.

 

(b)                Confidential Information ” means any information related to the activities of the Company, the Equityholders and their respective Affiliates that an Equityholder may acquire from the Company or the Equityholders, other than information that (i) is already available through publicly available sources of information (other than as a result of disclosure by such Equityholder), (ii) was available to a Equityholder on a non-confidential basis prior to its disclosure to such Equityholder by the Company, or (iii) becomes available to a Equityholder on a non-confidential basis from a third party, provided such third party is not known by such Equityholder, after reasonable inquiry, to be bound by this Agreement or another confidentiality agreement with the Company. Such Confidential Information may include information that pertains or relates to the business and affairs of any other Equityholder or any other Company matters. Confidential Information may be used by a Equityholder and its Equityholder Parties only in connection with Company matters and in connection with the maintenance of its interest in the Company.

 

41
 

(c)                 In the event that any Equityholder or any Equityholder Parties of such Equityholder is required to disclose any of the Confidential Information, such Equityholder shall use reasonable efforts to provide the Company with prompt written notice so that the Company may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement, and such Equityholder shall use reasonable efforts to cooperate with the Company in any effort any such Person undertakes to obtain a protective order or other remedy. In the event that such protective order or other remedy is not obtained, or that the Company waives compliance with the provisions of this Section 12.11, such Equityholder and its Equityholder Parties shall furnish only that portion of the Confidential Information that is legally required and shall exercise all reasonable efforts to obtain reasonably reliable assurance that the Confidential Information shall be accorded confidential treatment.

 

(d)                Notwithstanding anything in this Agreement to the contrary, each Equityholder may disclose to any persons the U.S. federal income tax treatment and tax structure of the Company and the transactions set out in the Reorganization Agreement. For this purpose, “tax structure” is limited to any facts relevant to the U.S. federal income tax treatment of the Company and does not include information relating to the identity of the Company or any Equityholder.

 

Section 12.12     Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such State that would result in the application of the laws of any other State.

 

[signature pages follow]

 

42
 

IN WITNESS WHEREOF, the parties hereto have caused this Second Amended and Restated Limited Liability Company Agreement to be duly executed as of the day and year first written above.

 

  VTV THERAPEUTICS LLC  
       
       
  By: /s/ Stephen L. Holcombe  
    Name: Stephen L. Holcombe  
    Title: President and Chief Executive Officer  
       
       
  VTV THERAPEUTICS INC.  
       
       
  By: /s/ Stephen L. Holcombe  
    Name: Stephen L. Holcombe  
    Title: President and Chief Executive Officer  
       
       
  VTV THERAPEUTICS HOLDINGS LLC  
       
       
  By: /s/ Stephen L. Holcombe  
    Name: Stephen L. Holcombe  
    Title: President  

 

[Signature Page to the Amended and Restated Limited Liability Company Agreement of vTv Therapeutics LLC]
 

Schedule A

 

Member Schedule

 

Member Address Class M
Common
Units
Nonvoting
Common
Units
Capital
Account
Balance
Class M Member
vTv
Therapeutics
Inc.
4170 Mendenhall Oaks Parkway
High Point, NC 27265
Facsimile:  (336) 841-0310
E-mail: sholcombe@vtvtherapeutics.com
1 0 --
Nonvoting Members
vTv
Therapeutics
Holdings LLC
c/o MacAndrews & Forbes Incorporated
35 East 62nd Street
New York, NY 10065
Facsimile:  (212) 572-5695
E-mail:
0 25,000,000 $375,000,000

 
 

Exhibit 10.3

 

INVESTOR RIGHTS AGREEMENT

dated as of

July 29, 2015

among

VTV THERAPEUTICS INC.

and

VTV THERAPEUTICS HOLDINGS LLC

 

 
 

 

TABLE OF CONTENTS

 

 

Page

 

ARTICLE 1 Definitions
Section 1.01.    Definitions 1
Section 1.02.    Other Definitional and Interpretative Provisions 7
ARTICLE 2 Registration Rights
Section 2.01.    Demand Registration 7
Section 2.02.    Shelf and Piggyback Registration 11
Section 2.03.    Lock-Up Agreements 16
Section 2.04.    Registration Procedures 17
Section 2.05.    Indemnification by the Company 21
Section 2.06.    Indemnification by Registering Stockholders 22
Section 2.07.    Conduct of Indemnification Proceedings 22
Section 2.08.    Contribution 23
Section 2.09.    Participation in Public Offering 24
Section 2.10.    Other Indemnification 24
Section 2.11.    Cooperation by the Company 24
Section 2.12.    Transfer of Registration Rights 24
Section 2.13.    Limitations on Subsequent Registration Rights 24
Section 2.14.    Free Writing Prospectuses 25
Section 2.15.    Information from Registering Stockholders; Obligations of Registering Stockholders 25
ARTICLE 3 Board of Directors
Section 3.01.    Board of Directors 26
Section 3.02.    Termination of Holdings’ Rights 27
ARTICLE 4 Termination
Section 4.01.    Termination 28
 
 
ARTICLE 5 Miscellaneous
Section 5.01.    Successors and Assigns 29
Section 5.02.    Notices 29
Section 5.03.    Amendments and Waivers 30
Section 5.04.    Governing Law 30
Section 5.05.    Jurisdiction 30
Section 5.06.    WAIVER OF JURY TRIAL 30
Section 5.07.    Specific Enforcement 31
Section 5.08.    Counterparts; Effectiveness; Third Party Beneficiaries 31
Section 5.09.    Entire Agreement 31
Section 5.10.    Severability 31
Section 5.11.    Sophisticated Parties; Advice of Counsel 31
Section 5.12.    Certificate of Incorporation Supersedes 31

 

Exhibit A         Joinder Agreement 

Schedule 1      Plan of Distribution

 

 
 

 

INVESTOR RIGHTS AGREEMENT

 

THIS INVESTOR RIGHTS AGREEMENT dated as of July 29, 2015 (this “ Agreement ”) among (i) vTv Therapeutics Inc., a Delaware corporation (the “ Company ”), (ii) vTv Therapeutics Holdings LLC, a Delaware limited liability company (“ Holdings ”), and (iii) other stockholders party hereto from time to time.

 

W I T N E S S E T H:

 

WHEREAS, in connection with the initial public offering of the Company and the related reorganization transactions, Holdings has received 25,000,000 shares of Class B common stock, par value $0.01, of the Company; and

 

WHEREAS, the parties hereto are entering into this Agreement to provide (i) certain registration rights under the Securities Act and applicable state securities laws to each Stockholder (as defined below) with respect to Registrable Securities (as defined below) each may hold and (ii) certain governance rights to Holdings.

 

NOW, THEREFORE, in consideration of the covenants and agreements contained herein, the parties hereto agree as follows:

 

ARTICLE 1
Definitions

 

Section 1.01.       Definitions. (a) As used herein, the following terms have the following meanings:

 

Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person; provided that no securityholder of the Company shall be deemed an Affiliate of any other securityholder solely by reason of any investment in the Company. For the purpose of this definition, the term “ control ” (including, with correlative meanings, the terms “ controlling ”, “ controlled by ” and “ under common control with ”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

Applicable Governance Rules ” means applicable federal and state securities laws and the rules of NASDAQ relating to the Board and the corporate governance of the Company, including, without limitation, Rule 10A-3 of the Exchange Act and Rule 5600 of the NASDAQ Stock Market Rules, in each case, subject to applicable phase-in periods.

 

Automatic Shelf Registration Statement ” means an “automatic shelf registration statement” as defined in Rule 405 promulgated under the Securities Act.

 

beneficial ownership ” and “ beneficially own ” and similar terms have the meaning set forth in Rule 13d-3 under the Exchange Act.

 

Board ” means the board of directors of the Company.

 

 
 

 

Business Day ” means any day except a Saturday, Sunday or other day on which commercial banks in New York City are authorized by law to close.

 

By-laws ” means the Amended and Restated By-laws of the Company, as the same may be amended, supplemented and or restated from time to time.

 

Certificate of Incorporation ” means the Amended and Restated Certificate of Incorporation of the Company, as the same may be amended, modified or restated from time to time.

 

Charter ” means the Amended and Restated Certificate of Incorporation of the Company, as the same may be amended, supplemented and/or restated from time to time.

 

Class A Common Stock ” means the Class A common stock, par value $0.01 per share, of the Company.

 

Class B Common Stock ” means the Class B common stock, par value $0.01 per share, of the Company.

 

Company Securities ” means (i) the Class A Common Stock, (ii) any securities of the Company or any successor or assign of the Company into which such Class A Common Stock is reclassified or reconstituted or into which such Class A Common Stock is converted or otherwise exchanged in connection with a split or combination of shares, recapitalization, merger, sale of assets, consolidation or other reorganization or otherwise or (iii) any securities received as a dividend or a distribution in respect of the securities described in clauses (i) or (ii) above.

 

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC thereunder.

 

Exchange Agreement ” means the Exchange Agreement, dated as of the date hereof, by and among the Company, vTv Therapeutics LLC, Holdings (and its successors or assigns) and any other Person that becomes a “Holder” thereunder, as the same may be amended, restated, supplemented and/or otherwise modified, from time to time.

 

Exchange Securities ” means, together, the Nonvoting Common Units of vTv Therapeutics LLC and shares of Class B Common Stock.

 

FINRA ” means the Financial Industry Regulatory Authority.

 

Free Writing Prospectus ” means any “free writing prospectus” as defined in Rule 405 promulgated under the Securities Act relating to the Registrable Securities included in the applicable Registration Statement.

 

Hedging Counterparty ” means a broker-dealer registered under Section 15(b) of the Exchange Act or an Affiliate thereof.

 

Hedging Transaction ” means any transaction involving a security linked to the Registrable Class Securities or any security that would be deemed to be a “derivative security” (as defined in Rule 16a-1(c) promulgated under the Exchange Act) with respect to the Registrable Class Securities or transaction (even if not a security) which would (were it a security) be considered such a derivative security, or which transfers some or all of the economic risk of ownership of the Registrable Class Securities, including any forward contract, equity swap, put or call, put or call equivalent position, collar, non-recourse loan, sale of exchangeable security or similar transaction. For the avoidance of doubt, the following transactions shall be deemed to be Hedging Transactions:

 

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(i)    transactions by a Stockholder in which a Hedging Counterparty engages in short sales of Registrable Class Securities pursuant to a prospectus and may use Registrable Securities to close out its short position;

 

(ii)    transactions pursuant to which a Stockholder sells short Registrable Class Securities pursuant to a prospectus and delivers Registrable Securities to close out its short position;

 

(iii)    transactions by a Stockholder in which the Stockholder delivers, in a transaction exempt from registration under the Securities Act, Registrable Securities to the Hedging Counterparty who will then publicly resell or otherwise transfer such Registrable Securities pursuant to a prospectus or an exemption from registration under the Securities Act; and

 

(iv)    a loan or pledge of Registrable Securities to a Hedging Counterparty who may then become a selling stockholder and sell the loaned shares or, in an event of default in the case of a pledge, sell the pledged shares, in each case, in a public transaction pursuant to a prospectus.

 

Independent Director ” means a director who qualifies as an “independent director” of the Company under the NASDAQ Stock Market Rules.

 

Initial Public Offering ” means the initial underwritten public offering of the Class A Common Stock of the Company on July 29, 2015.

 

MacAndrews Party ” means each of Holdings, MacAndrews & Forbes Incorporated and M&F TTP Holdings LLC and each of their respective Affiliates (other than the Company and its Subsidiaries).

 

MacAndrews Stockholder ” means each MacAndrews Party that is a Stockholder.

 

Person ” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof, and shall include any successor (by merger or otherwise) thereto.

 

Public Offering ” means an underwritten public offering of Registrable Securities (or in the case of the Company, Company Securities) pursuant to an effective registration statement under the Securities Act, other than pursuant to a registration statement on Form S-4 or Form S-8 or any similar or successor form under the Securities Act.

 

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Registering Stockholder ” means, with respect to any Registration Statement, each Stockholder whose Registrable Securities are or are to be registered pursuant to such Registration Statement.

 

Registrable Class Securities ” means the Registrable Securities and any other securities of the Company that are of the same class as the relevant Registrable Securities.

 

Registrable Securities ” means, at any time, any Company Securities beneficially owned (whether beneficially owned as of the date hereof or hereinafter beneficially owned) by a Stockholder until (i) a registration statement covering such securities has been declared effective by the SEC and such securities have been disposed of pursuant to such effective registration statement, (ii) such securities are sold pursuant to Rule 144 (or any similar provisions then in force) under the Securities Act, (iii) such securities are otherwise transferred, assigned, sold, conveyed or otherwise disposed of and thereafter such securities may be resold without subsequent registration under the Securities Act or (iv) with respect to any such securities held by any single Stockholder (or group of Stockholders that are aggregated for purposes of Rule 144), all of such securities held by any Stockholder or group of Stockholders are able to be sold in a single transaction pursuant to Rule 144 (or any similar provisions then in force) and such securities of such Stockholder (or group of Stockholder) represent no more than 2.5% of the relevant class of Company Securities. Upon written request to the Company, Holdings may, from time to time, designate as additional Registrable Securities an aggregate of up to 2,500,000 shares (which number shall be subject to adjustment to take account of any splits, combinations, share dividends or other similar transactions affecting the Company Securities) of Company Securities that have been issued or are issuable upon exchange of Exchange Securities that are beneficially owned by parties other than Stockholders. For the avoidance of doubt, in connection with any designation pursuant to the preceding sentence, parties other than Stockholders will not have any rights, benefits, remedies, obligations, or liabilities under this Agreement.

 

 

Registration Expenses ” means any and all expenses incident to the performance of or compliance with any registration or marketing of Registrable Securities, regardless of whether such Registration Statement is declared effective, including all (i) registration and filing fees, and all other fees and expenses payable in connection with the listing of securities on any securities exchange or automated interdealer quotation system, (ii) fees and expenses incurred in complying with any securities or “blue sky” laws (including reasonable fees and disbursements of counsel in connection with “blue sky” qualifications of the Registrable Securities as may be set forth in any underwriting agreement), (iii) expenses in connection with the preparation, printing, mailing and delivery of any registration statements, prospectuses and other documents in connection therewith and any amendments or supplements thereto, (iv) security engraving and printing expenses, (v) internal expenses of the Company (including all salaries and expenses of its officers and employees performing legal or accounting duties), (vi) reasonable fees and disbursements of counsel for the Company and customary fees and expenses for independent certified public accountants retained by the Company (including the expenses relating to any comfort letters or costs associated with the delivery by independent certified public accountants of any “comfort” letters requested pursuant to Section 2.04(h) or any special audits incidental to or required by any registration or qualification), (vii) reasonable fees and expenses of any special experts retained by the Company in connection with such registration, (viii) reasonable fees, out-of-pocket costs and expenses of one firm of counsel selected by the holder(s) of a majority of the Registrable Securities covered by each Registration Statement (the “ Holders’ Counsel ”), (ix) fees and expenses in connection with any review by the FINRA of the underwriting arrangements or other terms of the offering, and all fees and expenses of any qualified independent underwriter, including the reasonable fees and expenses of any counsel thereto, (x) fees and disbursements of underwriters customarily paid by issuers or sellers of securities, but excluding any underwriting fees, discounts and commissions attributable to the sale of Registrable Securities, (xi) costs of printing and producing any agreements among underwriters, underwriting agreements, any “blue sky” or legal investment memoranda and any selling agreements and other documents in connection with the offering, sale or delivery of the Registrable Securities, (xii) transfer agents’ and registrars’ fees and expenses and the fees and expenses of any other agent or trustee appointed in connection with such offering, (xiii) expenses relating to any analyst or investor presentations or any “road shows” undertaken in connection with the registration, marketing or selling of the Registrable Securities, (xiv) fees and expenses payable in connection with any ratings of the Registrable Securities, including expenses relating to any presentations to rating agencies, (xv) all out-of pocket costs and expenses incurred by the Company or its appropriate officers in connection with their compliance with Section 2.04(m) and (xvi) any liability insurance or other premiums for insurance obtained in connection with any Demand Registration, Piggyback Registration or Shelf Registration pursuant to the terms of this Agreement.

 

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Registration Statement ” means any registration statement of the Company under the Securities Act that covers any of the Registrable Securities pursuant to the provisions of this Agreement.

 

Requesting Stockholder ” means, with respect to any Demand Registration or Shelf Registration, any Stockholder holding any Registrable Securities initially making the request for such Demand Registration or Shelf Registration.

 

Rule 144 ” means Rule 144 promulgated under the Securities Act.

 

SEC ” means the U.S. Securities and Exchange Commission or any successor governmental agency.

 

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

 

Shares ” means shares of Common Stock.

 

Shelf Registered Securities ” means any Registrable Securities whose offer and sale is registered pursuant to a Registration Statement filed in connection with a Shelf Registration (including an Automatic Shelf Registration Statement).

 

Specified Period ” means 90 days; provided that such period may be extended as may be reasonably requested by the managing or co-managing underwriter of a registered offering required hereunder to accommodate regulatory restrictions on (i) the publication or other distribution of research reports and (ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in the FINRA rules or any successor provisions or amendments thereto.

 

Stockholder ” means at any time, (i) each MacAndrews Party beneficially owning Company Securities or Exchange Securities and (ii) any Person (other than the Company) who shall be a party to or bound by this Agreement (including any permitted transferee or assignee of a MacAndrews Party) pursuant to Section 2.12 , so long as such Person shall beneficially own any Company Securities.

 

Subsidiary ” means, with respect to any Person, any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions at the time are directly or indirectly owned by such Person.

 

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(b)                Each of the following terms is defined in the Section set forth opposite such term:

 

Term

 

Section

 

Alternative Transaction 2.02(d)
Audit Committee Independent Director 3.01(a)(ii)
Committees 3.01(c)
Company Preamble
Damages 2.05
Demand Registration 2.01(a)
Determination Date 2.02(f)

Holdings

Preamble

Holdings Nominee 3.01(a)(i)
Holders’ Counsel 1.01(a),
Definition of
“Registration
Expenses”
Indemnified Party 2.07
Indemnifying Party 2.07
Independent Director 3.01(c)(ii)
Inspectors 2.04(g)
Issuer Free Writing Prospectus 2.14
Maximum Offering Size 2.01(e)
Piggyback Registration 2.02(h)(i)
Records 2.04(g)
Registration Actions 2.01(f)
Requested Shelf Registered Securities 2.02(b)
Shelf Public Offering 2.02(b)
Shelf Public Offering Notice 2.02(b)
Shelf Public Offering Request 2.02(b)
Shelf Public Offering Requesting Stockholder 2.02(b)
Shelf Registration 2.02(a)
Stockholder Parties 2.05
Suspension Notice 2.01(f)
Suspension Period 2.01(f)
Well-Known Seasoned Issuer 2.02(f)

 

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Section 1.02.       Other Definitional and Interpretative Provisions. The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise specified. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. References to laws, rules, regulations and forms shall be deemed to be references to such laws, rules, regulations and forms as amended, succeeded or replaced.

 

ARTICLE 2
Registration Rights

 

Section 2.01.       Demand Registration. (a) At any time following the Initial Public Offering, any Stockholder may give a written request to the Company to effect the registration under the Securities Act (other than pursuant to a registration statement on Form S-4 or S-8 or any similar or successor form under the Securities Act) of all or any portion of such Requesting Stockholder’s Registrable Securities, which written request shall specify the number of Registrable Securities to be registered and the intended method of disposition thereof. Such registration may be for the offering of the Stockholder’s Registrable Securities on a delayed or continuous basis under Rule 415 under the Securities Act. At any time the Company is eligible for use of Form S-3ASR, such registration shall occur on such form. Upon the receipt of such written request, the Company shall promptly give notice (via facsimile or electronic transmission) of such requested registration (each such registration shall be referred to herein as a “ Demand Registration ”) at least 10 Business Days prior to the anticipated filing date of the Registration Statement relating to such Demand Registration to any other Stockholders. Thereafter, the Company shall use its commercially reasonable efforts to effect, as soon as possible, the registration under the Securities Act of:

 

(i)                  all Registrable Securities for which the Requesting Stockholder has requested registration under this Section 2.01 ;

 

(ii)                 all other Registrable Securities of the same class or series as those requested to be registered by the Requesting Stockholder that any other Stockholder have requested the Company to register by request received by the Company within 10 Business Days after such Stockholders receive the Company’s notice of the Demand Registration; and

 

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(iii)              any Company Securities to be offered or sold by the Company;

 

all to the extent necessary to permit the disposition (in accordance with the intended methods thereof as described in the Requesting Stockholder’s written request) of the Registrable Securities so to be registered; provided that, subject to Section 2.01(d) , the Company shall not be obligated to effect (1) any such Demand Registration (i) within the Specified Period after the effective date of any other registration statement of the Company in connection with which Stockholders were given Piggyback Registration rights (other than a registration statement filed in connection with an employee benefit plan or business combination transaction or a registration statement on Form S-4 or S-8) or (ii) in accordance with Section 2.01(f ), (2) any Demand Registration if the aggregate proceeds expected to be received from the sale of the Registrable Securities requested to be included in such Demand Registration is less than $25,000,000 (other than with respect to the registration of the exchange of the Exchange Securities for shares of Class A Common Stock pursuant to the Exchange Agreement) or (3) any Demand Registration requested by a Stockholder other than the MacAndrews Stockholders if the Company has completed three Demand Registrations after the date hereof as a result of requests by Stockholders other than MacAndrews Stockholders pursuant to this Section 2.01(a) . A Requesting Stockholder may require any Demand Registration that involves a Public Offering of at least $25,000,000 to be conducted as an underwritten offering. Notwithstanding the foregoing, a Requesting Stockholder may request that a Demand Registration take the form of a primary offering by the Company of Class A Common Stock, whose net proceeds shall be used by the Company, pursuant to the Exchange Agreement, to pay cash in exchange for the Exchange Securities that underlie the Registrable Securities proposed to be registered pursuant to such Demand Registration, in which case, (i) the Demand Registration shall cover the primary sale of the number of shares of Class A Common Stock requested by the Requesting Stockholder, (ii) the Requesting Holder shall exercise its right, pursuant to Section 2.02 of the Exchange Agreement, to exchange the number of Exchange Securities that is equal to the number of shares of Class A Common Stock sold in such Public Offering, contingent on (among other things) the closing of such Public Offering and receipt by the Company of net proceeds therefrom, (iii) upon receipt of the net proceeds from such Public Offering, the Company shall elect, pursuant to Section 2.01 of the Exchange Agreement, to exchange such net proceeds for the number of Exchange Securities equal to the number of shares of Class A Common Stock sold pursuant to such Public Offering and (iv) except where the context otherwise requires, references to “Registrable Securities” with respect to such Demand Registration shall be to such shares of Class A Common Stock requested to be offered in such Pubic Offering. In addition, to the extent requested by a Stockholder and agreed by the MacAndrews Stockholders, such Stockholder may request that the Demand Registration cover the exchange of the Exchange Securities for shares of Class A Common Stock pursuant to the Exchange Agreement instead of the resale of the Registrable Securities.

 

(b)                Promptly after the expiration of the 10 Business Day period referred to in Section 2.01(a)(ii) , the Company will notify all Registering Stockholders of the identities of the other Registering Stockholders and the number of shares of Registrable Securities requested to be included in the Demand Registration. At any time prior to the effective date of the Registration Statement relating to such Demand Registration, the Requesting Stockholder may upon notice to the Company, revoke such request in whole or in part with respect to the number of shares of Registrable Securities requested to be included in such Registration Statement, without liability to any of the other Registering Stockholders.

 

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(c)                 The Company shall be liable for and pay all Registration Expenses in connection with any Demand Registration, regardless of whether such Demand Registration becomes effective.

 

(d)                A Demand Registration shall not be deemed to have occurred or have been completed for purposes of Section 2.01(a) :

 

(i)                  unless the Registration Statement relating thereto (A) has become effective under the Securities Act and (B) has remained continuously effective for a period of at least (x) 180 days (or such shorter period in which all Registrable Securities of the Registering Stockholders included in such registration have actually been sold thereunder) or (y) with respect to a Shelf Registration, until the date set forth in Section 2.04(a) ; provided that such Registration Statement shall not be considered a Demand Registration if, after such Registration Statement becomes effective, (1) such Registration Statement is interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court and (2) less than 75% of the Registrable Securities included in such Registration Statement have been sold thereunder; or

 

(ii)                if the Maximum Offering Size is reduced in accordance with Section 2.01(e) such that less than 66 2 / 3 % of the Registrable Securities of the Requesting Stockholder sought to be included in such registration are included.

 

(e)                 If a Demand Registration involves a Public Offering and the lead managing underwriter advises the Company and the Requesting Stockholder that, in its view, the number of shares of Registrable Securities requested to be included in such registration (including any securities that the Company proposes to be included that are not Registrable Securities) exceeds the largest number of shares that can be sold without having a material and adverse effect on such offering, including the price at which such shares can be sold (the “ Maximum Offering Size ”), the Company shall include in such registration, in the priority listed below, up to the Maximum Offering Size:

 

(i)                  first, all Registrable Securities requested to be registered by the Requesting Stockholder and all other Registering Stockholders (allocated, if necessary for the offering not to exceed the Maximum Offering Size, to give first priority to the inclusion of the Registrable Securities of the Requesting Stockholder and, thereafter, pro rata among the remaining Registering Stockholders on the basis of the relative number of shares of Registrable Securities so requested to be included in such registration by each such Registering Stockholder);

 

(ii)                second, any securities proposed to be registered by the Company; and

 

(iii)               third, any securities proposed to be registered for the account of any other Persons, with such priorities among them as the Company shall determine.

 

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(f)                 Notwithstanding anything to the contrary contained in this Agreement, but subject to the limitation set forth in the next succeeding paragraph, the Company shall be entitled to suspend its obligation to file (but not the preparation of) any Registration Statement in connection with a Demand Registration and any Shelf Registration, file any amendment to such a Registration Statement, furnish any supplement or amendment to a prospectus included in such a Registration Statement, make any other filing with the SEC, cause such a Registration Statement or other filing with the SEC to become or remain effective or take any similar action (collectively, “ Registration Actions ”) upon (i) the issuance by the SEC of a stop order suspending the effectiveness of any such Registration Statement or the initiation of proceedings with respect to such a Registration Statement under Section 8(d) or 8(e) of the Securities Act, (ii) the Board’s determination, in its good faith judgment, that any such Registration Action should not be taken because it would reasonably be expected to materially interfere with or require the public disclosure of any material corporate development or plan, including any material financing, securities offering, acquisition, disposition, corporate reorganization or merger or other transaction involving the Company or any of its Subsidiaries or (iii) the Company possessing material non-public information the disclosure of which the Board determines, in its good faith judgment, would reasonably be expected to not be in the best interests of the Company. Upon the occurrence of any of the conditions described in (i), (ii) or (iii) above, the Company shall give prompt notice of such suspension (and whether such action is being taken pursuant to (i), (ii) or (iii) above) (a “ Suspension Notice ”) to the Stockholders. Upon the termination of such condition, the Company shall give prompt notice thereof to the Stockholders and shall promptly proceed with all Registration Actions that were suspended pursuant to this paragraph.

 

The Company may only suspend Registration Actions pursuant to the preceding paragraph on two occasions during any one-year period for a reasonable time specified in the Suspension Notice but not exceeding an aggregate of 90 days (which period may not be extended or renewed) (each such occasion, a “ Suspension Period ”). Each Suspension Period shall be deemed to begin on the date the relevant Suspension Notice is given to the Stockholders and shall be deemed to end on the earlier to occur of (i) the date on which the Company gives the Stockholders a notice that the Suspension Period has terminated and (ii) the date on which the number of days during which a Suspension Period has been in effect exceeds the 90-day period. If the filing of any Demand Registration is suspended pursuant to this Section 2.01(f) , once the Suspension Period ends the Requesting Stockholder may request a new Demand Registration. Notwithstanding anything to the contrary in this Agreement, the Company shall not be in breach of, or failed to comply with, any obligation under this Agreement where the Company acts or omits to take any action in order to comply with applicable law, any interpretation of the staff of the SEC or any order or decree of any court or governmental agency.

 

(g)                The Company shall have no obligation to file a Registration Statement under this Section 2.01 or Section 2.02 or proceed with Registration Actions related thereto during any time such filing or Registration Actions are prohibited by any applicable underwriting or lock-up agreement to which the Company is a party relating to the Initial Public Offering or an offering pursuant to a Registration Statement.

 

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Section 2.02.       Shelf and Piggyback Registration . (a) At any time when (i) the Company is eligible for use of Form S-3 in connection with a secondary public offering of its equity securities and (ii) a Shelf Registration on a Form S-3 registering Registrable Securities for resale is not then effective (subject to any applicable Suspension Period), upon the written request of any Stockholder, the Company shall use its commercially reasonable efforts to register, under the Securities Act on Form S-3 for an offering on a delayed or continuous basis pursuant to Rule 415 promulgated under the Securities Act (a “ Shelf Registration ”), the offer and sale of all or a portion of the Registrable Securities owned by such Requesting Stockholder. Upon the receipt of such written request, the Company shall promptly give notice (via facsimile or electronic transmission) of such requested Shelf Registration at least 10 Business Days prior to the anticipated filing date of such Shelf Registration to the other Stockholders, and such notice shall describe the proposed Shelf Registration, the intended method of disposition of such Registrable Securities and any other information that at the time would be appropriate to include in such notice, and offer such Stockholders the opportunity to register the number of Registrable Securities as each such Stockholder may request in writing to the Company, given within 10 Business Days after such Stockholders receive the Company’s notice of the Shelf Registration. The “Plan of Distribution” section of such Shelf Registration shall permit all lawful means of disposition of Registrable Securities, including firm-commitment underwritten public offerings, block trades, agented transactions, sales directly into the market, purchases or sales by brokers and sales not involving a public offering. With respect to each Shelf Registration, the Company shall, subject to any Suspension Period, (i) as promptly as practicable after the written request of the Requesting Stockholder, file a Registration Statement and (ii) use its commercially reasonable efforts to cause such Registration Statement to be declared effective as promptly as practicable, and remain effective until the date set forth in Section 2.04(a)(ii) . No Stockholder shall be entitled to include any of its Registrable Securities in a Shelf Registration unless such Stockholder has complied with Section 2.15 . The Company shall not be required to amend a Shelf Registration (or the related prospectus) to add or change the disclosure regarding selling securityholders during any Suspension Period. The obligations set forth in this Section 2.02(a) shall not apply if the Company has a currently effective Automatic Shelf Registration Statement covering all Registrable Securities in accordance with Section 2.02(f) and has otherwise complied with its obligations pursuant to this Agreement.

 

(b)                Upon written request by a Requesting Stockholder holding Shelf Registered Securities (such Stockholder, the “ Shelf Public Offering Requesting Stockholder ”), which request (the “ Shelf Public Offering Request ”) shall specify the class or series and amount of such Shelf Public Offering Requesting Stockholder’s Shelf Registered Securities to be sold (the “ Requested Shelf Registered Securities ”), the Company shall (subject to any Suspension Period) perform its obligations hereunder with respect to the sale of such Requested Shelf Registered Securities in the form of a firm commitment underwritten public offering (unless otherwise consented to by the Shelf Public Offering Requesting Stockholder) (a “ Shelf Public Offering ”) if the aggregate proceeds expected to be received from the sale of the Requested Shelf Registered Securities equals or exceeds $25,000,000. Promptly upon receipt of a Shelf Public Offering Request, the Company shall provide notice (the “ Shelf Public Offering Notice ”) of such proposed Shelf Public Offering (which notice shall state the material terms of such proposed Shelf Public Offering, to the extent known, as well as the identity of the Shelf Public Offering Requesting Stockholder) to the other Stockholders holding Shelf Registered Securities. Such other Stockholders may, by written request to the Company and the Shelf Public Offering Requesting Stockholder, within two Business Days after receipt of such Shelf Public Offering Notice, include up to all of their Shelf Registered Securities of the same class or series as the Requested Shelf Registered Securities in such proposed Shelf Public Offering; provided , that any such Shelf Registered Securities shall be sold subject to the same terms as are applicable to the Shelf Registered Securities of the Shelf Public Offering Requesting Stockholder. No Stockholder shall be entitled to include any of its Registrable Securities in a Shelf Public Offering unless such Stockholder has complied with Section 2.15 . The lead managing underwriter or underwriters selected for such Shelf Public Offering shall be selected in accordance with Section 2.04(f)(i) .

 

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(c)                 In a Shelf Public Offering, if the lead managing underwriter advises the Company and the Shelf Public Offering Requesting Stockholder that, in its view, the number of shares of Registrable Securities requested to be included in such Shelf Public Offering (including any securities that the Company proposes to be included that are not Registrable Securities) exceeds the Maximum Offering Size, the Company shall include in such Shelf Public Offering, in the priority listed below, up to the Maximum Offering Size:

 

(i)                  first, all Shelf Registered Securities requested to be included in the Shelf Public Offering by the Shelf Public Offering Requesting Stockholder and all other Stockholders, pro rata on the basis of the relative number of shares of Shelf Registered Securities so requested to be included in the Shelf Public Offering by each such Stockholder;

 

(ii)                second, any securities proposed to be included in the Shelf Public Offering by the Company; and

 

(iii)               third, any securities proposed to be included in the Shelf Public Offering for the account of any other Persons, with such priorities among them as the Company shall determine.

 

(d)                The Company shall use its commercially reasonable efforts to cooperate in a timely manner with any request of the Stockholders in respect of any block trade, hedging transaction or other transaction that is registered pursuant to a Shelf Registration that is not a firm commitment underwritten offering (each, an “ Alternative Transaction ”), including, without limitation, entering into customary agreements with respect to such Alternative Transactions (and providing customary representations, warranties, covenants and indemnities in such agreements) as well as providing other reasonable assistance in respect of such Alternative Transactions of the type applicable to a Public Offering subject to Section 2.04 , to the extent customary for such transactions. The Company shall bear all Registration Expenses in connection with any Shelf Registration, any Shelf Public Offering or any other transaction (including any Alternative Transaction) registered under a Shelf Registration pursuant to this Section 2.02 , whether or not such Shelf Registration becomes effective or such Shelf Public Offering or other transactions is completed; provided , however , that if the Shelf Public Offering Requesting Stockholder revokes its request in whole with respect to a Shelf Public Offering, then the Shelf Public Offering Requesting Stockholder shall reimburse the Company for and/or pay directly all Registration Expenses incurred relating to such Shelf Public Offering.

 

(e)                 After the Registration Statement with respect to a Shelf Registration is declared effective but subject to the Suspension Period, upon written request by one or more Stockholders (which written request shall specify the amount of such Stockholders’ Registrable Securities to be registered), the Company shall, as promptly as practicable after receiving such request, (i) if it is eligible for use of Form S-3 in connection with a secondary public offering of its equity securities, or if such Registration Statement is an Automatic Shelf Registration Statement, file a prospectus supplement to include such Stockholders as selling stockholders in such Registration Statement or (ii) if it is not eligible for use of Form S-3 in connection with a secondary public offering of its equity securities, and the Registrable Securities requested to be registered represent more than 5% of the outstanding Registrable Securities and the aggregate proceeds expected to be received from the sale thereof is at least $10,000,000, file a post-effective amendment to the Registration Statement to include such Stockholders in such Shelf Registration and use commercially reasonable efforts to have such post-effective amendment declared effective.

 

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(f)                 Upon the Company becoming aware that it is a “Well-Known Seasoned Issuer” (as defined in Rule 405 under the Securities Act), (i) the Company shall give written notice to all of the Stockholders as promptly as practicable but in no event later than 20 Business Days thereafter, and such notice shall describe, in reasonable detail, the basis on which the Company has become a Well-Known Seasoned Issuer, and (ii) the Company shall, as promptly as practicable and subject to any Suspension Period, register, under an Automatic Shelf Registration Statement, the sale of all of the Registrable Securities in accordance with the terms of this Agreement. The Company shall use its commercially reasonable efforts to file such Automatic Shelf Registration Statement as promptly as practicable, but in no event later than 15 Business Days after it becomes a Well-Known Seasoned Issuer, and to cause such Automatic Shelf Registration Statement to remain effective thereafter until the date set forth in Section 2.04(a)(ii) . The Company shall give written notice of filing such Registration Statement to all of the Stockholders as promptly as practicable thereafter. The Company shall not be required to include any Stockholder as a selling stockholder in any Registration Statement or prospectus unless such Stockholder has complied with Section 2.15 . At any time after the filing of an Automatic Shelf Registration Statement by the Company, if it is reasonably likely that it will no longer be a Well-Known Seasoned Issuer as of a future determination date (the “ Determination Date ”), at least 30 days prior to such Determination Date, the Company shall (A) give written notice thereof to all of the Stockholders as promptly as practicable but in no event later than 10 Business Days prior to such Determination Date and (B) if the Company is eligible to file a Registration Statement on Form S-3 with respect to a secondary public offering of its equity securities, file a Registration Statement on Form S-3 with respect to a Shelf Registration in accordance with Section 2.02(a) , treating all selling stockholders identified as such in the Automatic Shelf Registration Statement (and amendments or supplements thereto) as Requesting Stockholders and use all commercially reasonable efforts to have such Registration Statement declared effective prior to the Determination Date. Any registration pursuant to this Section 2.02(f) shall be deemed a Shelf Registration for purposes of this Agreement.

 

(g)                Notwithstanding anything to the contrary, no Shelf Registration pursuant to this Section 2.02 shall be deemed a Demand Registration for purposes of Section 2.01 .

 

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(h)                Piggyback Registration.

 

(i)                  If the Company proposes to register any Company Securities under the Securities Act (other than a registration on Form S-8 or S-4 relating to Shares or any other class of Company Securities issuable upon exercise of employee stock options or in connection with any employee benefit or similar plan of the Company or in connection with a direct or indirect acquisition by the Company of another Person) other than in connection with a rights offering, whether or not for sale for its own account, the Company shall each such time give prompt notice (via facsimile or electronic transmission) at least 10 Business Days prior to the anticipated filing date of the registration statement relating to such registration to each Stockholder, which notice shall set forth such Stockholder’s rights under this Section 2.02 and shall offer such Stockholder the opportunity to include in such registration statement the number of Registrable Securities of the same class or series as those proposed to be registered as each such Stockholder may request (a “ Piggyback Registration ”), subject to the provisions of Section 2.02(h)(ii) . Upon the request of any such Stockholder made within 10 Business Days after the receipt of notice from the Company regarding a Piggyback Registration (which request shall specify the number of Registrable Securities intended to be registered by such Stockholder), the Company shall use its commercially reasonable efforts to effect the registration under the Securities Act of all Registrable Securities that the Company has been so requested to register by all such Requesting Stockholders, to the extent requisite to permit the disposition of the Registrable Securities so to be registered in accordance with the plan of distribution intended by the Company for such registration statement; provided that (i) if such registration involves a Public Offering, all such Registering Stockholders requesting to be included in the Company’s registration must sell their Registrable Securities to the underwriters selected as provided in Section 2.04(f)(i) on the same terms and conditions as apply to the Company and (ii) if, at any time after giving notice of its intention to register any Company Securities pursuant to this Section 2.02(h) and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register such securities, the Company shall give notice to all Registering Stockholders and, thereupon, shall be relieved of its obligation to register any Registrable Securities in connection with such registration. No registration effected under this Section 2.02 shall relieve the Company of its obligations to effect a Demand Registration or Shelf Registration to the extent required by Section 2.01 . The Company shall pay all Registration Expenses in connection with each Piggyback Registration.

 

(ii)                If a Piggyback Registration involves a Public Offering (other than any Demand Registration, in which case the provisions with respect to priority of inclusion in such offering set forth in Section 2.01(e) shall apply) and the lead managing underwriter advises the Company that, in its view, the number of Registrable Securities that the Company and such Registering Stockholders intend to include in such registration exceeds the Maximum Offering Size, the Company shall include in such registration, in the following priority, up to the Maximum Offering Size:

 

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(A)              first, so much of the Registrable Securities proposed to be registered for the account of the Company as would not cause the offering to exceed the Maximum Offering Size;

 

(B)               second, all Registrable Securities requested to be included in such registration by any Registering Stockholders pursuant to this Section 2.02 (allocated, if necessary for the offering not to exceed the Maximum Offering Size, pro rata among such Stockholders on the basis of the relative number of shares of Registrable Securities so requested to be included in such registration by each such Stockholder); and

 

(C)               third, any securities proposed to be registered for the account of any other Persons with such priorities among them as the Company shall determine.

 

(i)                  Hedging Transactions .

 

(i)                  The Company agrees that, in connection with any proposed Hedging Transaction, if, in the reasonable judgment of Holders’ Counsel, it is necessary or desirable to register under the Securities Act such Hedging Transaction or sales or transfers (whether short or long) of Registrable Class Securities in connection therewith, then the Company shall use its commercially reasonable efforts to take such actions (which may include, among other things, the filing of a post-effective amendment to a Registration Statement to include additional or changed information that is material or is otherwise required to be disclosed, including a description of such Hedging Transaction, the name of the Hedging Counterparty, identification of the Hedging Counterparty or its Affiliates as underwriters or potential underwriters, if applicable, or any change to the plan of distribution) as may reasonably be required to register such Hedging Transaction or sales or transfers of Registrable Class Securities in connection therewith under the Securities Act in a manner consistent with the rights and obligations of the Company hereunder with respect to the registration of Registrable Securities. Any information provided by the Stockholders regarding the Hedging Transaction that is included in a Registration Statement, prospectus or Free Writing Prospectus pursuant to this Section 2.02(h) shall be deemed to be information provided by the Registering Stockholders pursuant to such Registration Statement for purposes of Section 2.15 .

 

(ii)                All Registration Statements in which Stockholders may include Registrable Securities under this Agreement shall be subject to the provisions of this Section 2.02(h) , and the registration of Registrable Class Securities thereunder pursuant to this Section 2.02(h) shall be subject to the provisions of this Agreement applicable to any such Registration Statements; provided , however , that the selection of any Hedging Counterparty shall not be subject to Section 2.04(f) , but the Hedging Counterparty shall be selected by the holders of a majority of the Registrable Class Securities subject to the Hedging Transaction that are proposed to be included in such Registration Statement.

 

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(iii)              If in connection with a Hedging Transaction, a Hedging Counterparty or any Affiliate thereof is (or may be considered) an underwriter or selling stockholder, then it shall be required to provide customary indemnities to the Company regarding the plan of distribution and like matters.

 

(iv)              The Company further agrees to include, under the caption “Plan of Distribution” (or the equivalent caption), in each Registration Statement, and any related prospectus (to the extent such inclusion is permitted under applicable SEC regulations and is consistent with comments received from the SEC during any SEC review of the Registration Statement), language substantially in the form of Schedule 1 hereto and to include in each prospectus supplement filed in connection with any proposed Hedging Transaction language mutually agreed upon by the Company, the relevant Stockholders and the Hedging Counterparty describing such Hedging Transaction.

 

Section 2.03.       Lock-Up Agreements. (a) Each Stockholder hereby agrees that it will not effect any public sale or distribution (including sales pursuant to Rule 144) of Registrable Securities, (i) during (A) the 10 days prior to and the 90-day period beginning on the effective date of the registration of such Registrable Securities in connection with a Public Offering (which period following the effective date may, in each case, be extended as reasonably requested by the underwriters participating in such Public Offering to accommodate regulatory restrictions on (I) the publication or other distribution of research reports and (II) analyst recommendations and opinions, including, but not limited to, the restrictions contained in the FINRA rules or any successor provisions or amendments thereto) or (B) such shorter period as the underwriters participating in such Public Offering may require, and (ii) upon notice from the Company of the commencement of a Public Offering in connection with any Shelf Registration, during (A) 10 days prior to and the 90-day period beginning on the date of commencement of such Public Offering or (B) such shorter period as the underwriters participating in such Public Offering may require, in each case except as part of such Public Offering. Each Stockholder agrees to execute a lock-up agreement in favor of the underwriters in form and substance reasonably acceptable to the Company and the underwriters to such effect and, in any event, that the underwriters in any relevant offering shall be third party beneficiaries of this Section 2.03(a) . The lock-up agreement to be executed by each Stockholder pursuant to this Section 2.03(a) shall be no less favorable to such Stockholder than the lock-up agreements (or provisions in any underwriting agreement) executed by the Company or any of the executive officers or directors of the Company pursuant to Section 2.03(b) .

 

(b)                The Company shall not effect any public sale or distribution of Registrable Securities (except pursuant to registrations on Form S-8 or Form S-4), (i) with respect to any Public Offering pursuant to a Demand Registration or any Piggyback Registration in which the holders of Registrable Securities are participating, during (A) the 10 days prior to and the 90-day period beginning on the effective date of such registration (which period following the effective date may, in each case, be extended as reasonably requested by the underwriters participating in such Public Offering to accommodate regulatory restrictions on (I) the publication or other distribution of research reports and (II) analyst recommendations and opinions, including, but not limited to, the restrictions contained in the FINRA rules or any successor provisions or amendments thereto) or (B) such shorter period as the underwriters participating in such Public Offering may require, and (ii) upon notice from any holder(s) of Registrable Securities subject to a Shelf Registration that such holder(s) intend to effect a Public Offering of Registrable Securities pursuant to such Shelf Registration (upon receipt of which, the Company will promptly notify all other Stockholders of the date of commencement of such Public Offering), during (A) the 10 days prior to and the 90-day period beginning on the date of commencement of such Public Offering and (B) such shorter period as the underwriters participating in such Public Offering may require), in each case except as part of such Public Offering. To the extent required by any underwriter participating in such Public Offering, the Company shall use commercially reasonable efforts to cause its executive officers and directors to execute customary lock-up agreements in connection with such Public Offering, which lock-up agreements shall not have a duration shorter than that of the lock-up agreement or provisions applicable to the Company.

 

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Section 2.04.       Registration Procedures . Whenever a Stockholder requests that any Registrable Securities be registered pursuant to Section 2.01 or 2.02 , subject to the provisions of such Sections, the Company shall use its commercially reasonable efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof as soon as reasonably practicable, and, in connection with any such request:

 

(a)                 The Company shall as soon as reasonably practicable prepare and file with the SEC a Registration Statement on any form for which the Company then qualifies or that counsel for the Company shall deem appropriate and which form shall be available for the sale of the Registrable Securities to be registered thereunder in accordance with the intended method of distribution thereof, and use its commercially reasonable efforts to cause such filed Registration Statement to become and remain effective for a period of (i) not less than 180 days (or, if sooner, until all Registrable Securities have been sold under such Registration Statement), or (ii) in the case of a Shelf Registration, until the earlier of the date (x) on which all of the securities covered by such Shelf Registration are no longer Registrable Securities and (y) on which the Company cannot extend the effectiveness of such Shelf Registration because it is no longer eligible for use of Form S-3; subject in each case to any Suspension Period.

 

(b)                Prior to filing a Registration Statement or related prospectus or any amendment or supplement thereto (including any documents incorporated by reference therein), or before using any Free Writing Prospectus, the Company shall provide to each Registering Stockholder, the Holders’ Counsel and each underwriter, if any, with an adequate and appropriate opportunity to review and comment on such Registration Statement, each prospectus included therein (and each amendment or supplement thereto) and each Free Writing Prospectus proposed to be filed with the SEC, and thereafter the Company shall furnish to such Registering Stockholder, the Holders’ Counsel and underwriter, if any, such number of copies of such Registration Statement, each amendment and supplement thereto filed with the SEC (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such Registration Statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424, Rule 430A, Rule 430B or Rule 430C under the Securities Act and such other documents as such Registering Stockholder or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Registering Stockholder; provided , however , that in no event shall the Company be required to provide to any Person any materials, information or document required to be filed by the Company pursuant to the Exchange Act prior to its filing other than in connection with a Public Offering. In addition, the Company shall, as expeditiously as practicable, keep Holders’ Counsel advised in writing as to the initiation and progress of any registration under Sections 2.01 and 2.02 and provide Holders’ Counsel with copies of all correspondence (including any comment letter) with the SEC, any self regulatory organization or other governmental agency in connection with any such Registration Statement. Each Registering Stockholder shall have the right to request that the Company modify any information contained in such Registration Statement, amendment and supplement thereto pertaining to such Registering Stockholder and the Company shall use its commercially reasonable efforts to comply with such request; provided, however , that the Company shall not have any obligation so to modify any information if the Company reasonably expects that so doing would cause the prospectus to contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.

 

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(c)                 After the filing of the Registration Statement, the Company shall (i) cause the related prospectus to be supplemented by any required prospectus supplement, and, as so supplemented, to be filed pursuant to Rule 424 under the Securities Act, (ii) comply with the provisions of the Securities Act applicable to the Company with respect to the disposition of all Registrable Securities covered by such Registration Statement during the applicable period in accordance with the intended methods of disposition by the Registering Stockholder thereof set forth in such Registration Statement or supplement to such prospectus and (iii) promptly notify each Registering Stockholder holding Registrable Securities covered by such Registration Statement and the Holders’ Counsel of any stop order issued or threatened by the SEC or any state securities commission and take all commercially reasonable actions required to prevent the entry of such stop order or to remove it if entered.

 

(d)                The Company shall use its commercially reasonable efforts to (i) register or qualify the Registrable Securities covered by such Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as any Registering Stockholder holding such Registrable Securities reasonably (in light of such Registering Stockholder’s intended plan of distribution) requests, and continue such registration or qualification in effect in such jurisdiction for the shortest of (A) as long as permissible pursuant to the laws of such jurisdiction, (B) as long as any such Registering Stockholder requests or (C) until all such Registrable Securities are sold and (ii) cause such Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be reasonably necessary or advisable to enable such Registering Stockholder to consummate the disposition of the Registrable Securities owned by such Registering Stockholder; provided that the Company shall not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 2.04(d) , (B) subject itself to taxation in any such jurisdiction or (C) consent to general service of process in any such jurisdiction.

 

(e)                 The Company shall promptly notify each Registering Stockholder holding such Registrable Securities covered by such Registration Statement (i) at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon the discovery that, or upon the occurrence of an event as a result of which, the preparation of a supplement or amendment to such prospectus is required so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and the Company shall promptly (subject to any applicable Suspension Period) prepare and make available to each Registering Stockholder and file with the SEC any such supplement or amendment, (ii) as soon as the Company becomes aware of any request by the SEC or any Federal or state governmental authority for amendments or supplements to a Registration Statement or related prospectus covering Registrable Securities or for additional information relating thereto, (iii) as soon as the Company becomes aware of the issuance or threatened issuance by the SEC of any stop order suspending or threatening to suspend the effectiveness of a Registration Statement covering the Registrable Securities or (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose.

 

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(f)                 (i) The Registering Stockholders holding a majority of the Registrable Securities to be included in a Demand Registration or intended to be sold pursuant to a Public Offering pursuant to a “take down” under a Shelf Registration shall have the right to select an underwriter or underwriters in connection with such Public Offering or “take down” (as the case may be) (which underwriter or underwriters may include any Affiliate of any Registering Stockholder so long as including such Affiliate would not require the separate engagement of a qualified independent underwriter with respect to such offering), subject to the Company’s approval (which shall not be unreasonably withheld, conditioned or delayed) and (ii) the Company shall select an underwriter or underwriters in connection with any other Public Offering. In connection with any Public Offering, the Company shall enter into customary agreements (including an underwriting agreement in customary form) and take all other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities in any such Public Offering, including, if required, the engagement of a “qualified independent underwriter” in connection with the qualification of the underwriting arrangements with the FINRA.

 

(g)                Subject to confidentiality arrangements customarily applicable to underwriters and the Registering Stockholders, the Company shall make available for inspection by any Registering Stockholder and any underwriter participating in any disposition pursuant to a Registration Statement being filed by the Company pursuant to this Section 2.04 and any attorney, accountant or other professional retained by any such Stockholder or underwriter (collectively, the “ Inspectors ”), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “ Records ”) as shall be reasonably necessary or desirable to enable them to exercise their due diligence responsibility, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any Inspectors in connection with such Registration Statement.

 

(h)                The Company shall furnish to each Registering Stockholder and to each such underwriter, if any, a signed counterpart, addressed to such Registering Stockholder or underwriter, of (i) an opinion or opinions of counsel to the Company and (ii) a comfort letter or comfort letters from the Company’s independent public accountants, each in customary form and covering such matters of the kind customarily covered by opinions or comfort letters, as the case may be, any Registering Stockholder or the lead managing underwriter therefor reasonably requests.

 

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(i)                  The Company shall otherwise comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably available, an earnings statement or such other document that shall satisfy the provisions of Section 11(a) of the Securities Act and the requirements of Rule 158 thereunder.

 

(j)                  The Company may require each Registering Stockholder promptly to furnish in writing to the Company such information regarding the distribution of the Registrable Securities as the Company may from time to time reasonably request and such other information as may be reasonably required in connection with such registration.

 

(k)                 Each Registering Stockholder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 2.04(e) , such Stockholder shall forthwith discontinue disposition of Registrable Securities pursuant to the Registration Statement (including any Shelf Registration) covering such Registrable Securities until such Stockholder’s receipt of (i) copies of the supplemented or amended prospectus from the Company or (ii) further notice from the Company that distribution can proceed without an amended or supplemented prospectus, and, in the circumstances described in clause (i) , if so directed by the Company, such Stockholder shall deliver to the Company all copies, other than any permanent file copies then in such Stockholder’s possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice. If the Company shall give such notice, the Company shall extend the period during which such registration statement shall be maintained effective (including the period referred to in Section 2.04(a)) by the number of days during the period from and including the date of the giving of notice pursuant to Section 2.04(e) to the date when the Company shall (x) make available to such Stockholder a prospectus supplemented or amended to conform with the requirements of Section 2.04(e) or (y) deliver to such Stockholder the notice described in clause (ii) .

 

(l)                  The Company shall use its commercially reasonable efforts to list all Registrable Securities of any class or series covered by such Registration Statement on any national securities exchange on which any of the Registrable Securities of such class or series are then listed or traded.

 

(m)                Upon written request (which notice shall be given with reasonable advance notice) to the Company by Registering Stockholders holding a majority of the Registrable Securities being sold in such offering, the Company shall have appropriate officers of the Company (i) upon reasonable request and at reasonable times prepare and make presentations at any “road shows” and before analysts and rating agencies, as the case may be, provided that officers of the Company shall not be required to participate in “road shows” within 60 days of the completion of a prior Public Offering with a “road show,” (ii) take other actions to obtain ratings for any Registrable Securities and (iii) otherwise use its commercially reasonable efforts to cooperate as requested by the underwriters in the offering, marketing or selling of the Registrable Securities.

 

(n)                The Company shall as soon as possible following its actual knowledge thereof, notify each Registering Stockholder: (A) when a prospectus, any prospectus supplement, a Registration Statement or a post-effective amendment to a Registration Statement has been filed with the SEC, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective; (B) of any request by the SEC or any other federal or state governmental authority for amendments or supplements to a Registration Statement, a related prospectus (including a Free Writing Prospectus) or for any other additional information; or (C) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceedings for such purpose.

 

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(o)                The Company shall reasonably cooperate with each Registering Stockholder and each underwriter participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made by FINRA.

 

(p)                The Company shall take all other steps reasonably necessary to effect the registration of such Registrable Securities and reasonably cooperate with the holders of such Registrable Securities to facilitate the disposition of such Registrable Securities.

 

(q)                 The Company shall, within the deadlines specified by the Securities Act, make all required filings of all prospectuses (including any Free Writing Prospectus) with the SEC and make all required filing fee payments in respect of any Registration Statement or related prospectus used under this Agreement (and any offering covered hereby).

 

(r)                  The Company shall, if such registration is pursuant to a Registration Statement on Form S-3 or any similar short-form registration, include in such Registration Statement such additional information for marketing purposes as the managing underwriter with respect to an underwritten public offering reasonably requests.

 

(s)                  To the extent a Registering Stockholder wishes to register on a Registration Statement the resale of Registrable Securities to be received upon the exchange of Exchange Securities pursuant to the Exchange Agreement, if required by applicable law, rule or regulation, each such Registering Stockholder shall exchange its Exchange Securities for shares of Class A Common Stock or commit to make such exchange prior to the filing of the relevant Registration Statement (or such later time as may be permitted under applicable law, rule or regulation).

 

Section 2.05.       Indemnification by the Company . The Company agrees to indemnify and hold harmless each Registering Stockholder holding Registrable Securities covered by a Registration Statement, its partners, Affiliates, stockholders, members, officers, directors, employees, partners and agents, and each Person, if any, who controls such Registering Stockholder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, “ Stockholder Parties ”) from and against any and all losses, claims, damages, liabilities and expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses) (“ Damages ”) caused by or relating to any untrue statement or allegedly untrue statement of a material fact contained in any Registration Statement or prospectus relating to the Registrable Securities (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus or Free Writing Prospectus relating to the Registrable Securities (including any information that has been deemed to be a part of any prospectus under Rule 159 under the Securities Act), or caused by or relating to any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however , that the Company shall not be liable to any Stockholder Party for any Damages that are caused by or related to any such untrue statement or omission or alleged untrue statement or omission so made based upon information furnished in writing to the Company by or on behalf of such Registering Stockholder expressly for use therein. The Company also agrees to indemnify and hold harmless any underwriters of the Registrable Securities, their respective officers and directors and each Person who controls any underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act on substantially the same basis as that of the indemnification of the Registering Stockholders provided in this Section 2.05 .

 

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Section 2.06.       Indemnification by Registering Stockholders . Each Registering Stockholder holding Registrable Securities included in any Registration Statement agrees, severally but not jointly, to indemnify and hold harmless (i) the Company, (ii) each Person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, (iii) each other Registering Stockholder participating in any offering of Registrable Securities and (iv) the respective partners, Affiliates, stockholders, members, officers, directors, employees, partners and agents of each of the Persons specified in clauses (i) through (iii) from and against all Damages to the same extent as the foregoing indemnity from the Company to such Registering Stockholder, but only with respect to information furnished in writing by or on behalf of such Registering Stockholder expressly for use in any Registration Statement or prospectus relating to the Registrable Securities, or any amendment or supplement thereto, or any preliminary prospectus or Free Writing Prospectus relating to the Registrable Securities (including any information that has been deemed to be a part of any prospectus under Rule 159 under the Securities Act). Each Registering Stockholder also agrees to indemnify and hold harmless any underwriters of the Registrable Securities, their respective officers and directors and each Person who controls any underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act on substantially the same basis as that of the indemnification of the Company and the other Registering Stockholders provided in this Section 2.06 . As a condition to including Registrable Securities in any Registration Statement filed in accordance with Article 2 , the Company may require that it shall have received an undertaking reasonably satisfactory to it from any underwriter to indemnify and hold the Company harmless to the extent customarily provided by underwriters with respect to similar securities and offerings. No Registering Stockholder shall be liable under this Section 2.06 for any Damages in excess of the net proceeds (after deducting the underwriters’ discounts and commissions) realized by such Registering Stockholder in the sale of Registrable Securities of such Registering Stockholder to which such Damages relate.

 

Section 2.07.       Conduct of Indemnification Proceedings . If any proceeding (including any investigation by any governmental authority) shall be instituted involving any Person in respect of which indemnity may be sought pursuant to Section 2.05 or 2.06 , such Person (an “ Indemnified Party ”) shall promptly notify the Person against whom such indemnity may be sought (the “ Indemnifying Party ”) in writing and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party, and shall assume the payment of all reasonable fees and expenses; provided that the failure of any Indemnified Party so to notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure to notify. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel; (ii) in the reasonable judgment of such Indemnified Party, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them; or (iii) the Indemnified Party shall have reasonably concluded (based on the advice of counsel) that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Party . It is understood that, in connection with any proceeding or related proceedings in the same jurisdiction, the Indemnifying Party shall not be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties, and that all such fees and expenses shall be reimbursed promptly after receipt of a invoice setting forth such fees and expenses in reasonable detail. In the case of any such separate firm for the Indemnified Parties, such firm shall be designated in writing by the Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any Damages (to the extent obligated herein) by reason of such settlement or judgment. Without the prior written consent of the Indemnified Party, no Indemnifying Party shall effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability arising out of such proceeding.

 

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Section 2.08.       Contribution . If the indemnification provided for in Section 2.05 or 2.06 is unavailable to the Indemnified Parties or insufficient in respect of any Damages caused by or relating to any untrue statement or allegedly untrue statement of a material fact contained in any Registration Statement or prospectus relating to the Registrable Securities (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus or Free Writing Prospectus relating to the Registrable Securities (including any information that has been deemed to be a part of any prospectus under Rule 159 under the Securities Act), or caused by or relating to any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Damages in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and the Indemnified Parties in connection with such actions which resulted in such Damages, as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and the Indemnified Parties shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact has been made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action.

 

The parties agree that it would not be just and equitable if contribution pursuant to this Section 2.08 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by a party as a result of the Damages referred to in the preceding paragraph shall be deemed to include, subject to the limitations set forth in Sections 2.05 and 2.06 , any legal or other expenses reasonably incurred by a party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 2.08 , no Registering Stockholder shall be required to contribute any amount in excess of the net proceeds (after deducting the underwriters’ discounts and commissions) received by such Registering Stockholder in the offering. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. Each Registering Stockholder’s obligation to contribute pursuant to this Section 2.08 is several in the proportion that the net proceeds of the offering received by such Registering Stockholder bears to the net total proceeds of the offering received by all such Registering Stockholders and not joint.

 

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Section 2.09.       Participation in Public Offering . No Stockholder may participate in any Public Offering hereunder unless such Stockholder (i) agrees to sell such Stockholder’s Registrable Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements and the provisions of this Agreement in respect of registration rights.

 

Section 2.10.       Other Indemnification . Indemnification similar to that specified herein (with appropriate modifications) shall be given by the Company and each Registering Stockholder participating therein with respect to any required registration or other qualification of securities under any federal or state law or regulation or governmental authority other than the Securities Act.

 

Section 2.11.       Cooperation by the Company . At any time following the Initial Public Offering, if any Stockholder shall transfer, assign, sell, convey or otherwise dispose of any Registrable Securities pursuant to Rule 144, the Company shall reasonably cooperate (subject to the terms and conditions of the Certificate of Incorporation) with such Stockholder, provide to such Stockholder such information as such Stockholder shall reasonably request and make publicly available information necessary to permit sales pursuant to Rule 144 for so long as necessary.

 

Section 2.12.       Transfer of Registration Rights . The rights of a Stockholder under this Article 2 may be transferred or assigned in connection with a transfer of Registrable Securities provided that all of the following additional conditions are satisfied: (x) such transfer or assignment is effected in accordance with applicable securities laws, (y) the Company is given written notice by such transferor of such transfer or assignment, stating the name and address of the transferee or assignee and identifying the amount of Registrable Securities with respect to which such rights are being transferred or assigned and (z) such transferee or assignee executes and delivers to the Company an agreement to be bound by this Agreement in the form of Exhibit A .

 

Section 2.13.       Limitations on Subsequent Registration Rights . The Company agrees that it shall not enter into any agreement with any holder or prospective holder of any securities of the Company (i) that would allow such holder or prospective holder to include such securities in any Demand Registration, Piggyback Registration or Shelf Registration unless, under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that their inclusion would not be on terms more favorable in the aggregate to such holder or prospective holder than this Agreement. The Company also represents and warrants to each Stockholder that it has not prior to the date of this Agreement entered into any agreement with respect to any of its securities granting any registration rights to any Person.

 

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Section 2.14.       Free Writing Prospectuses . Except for a prospectus relating to Registrable Securities included in a Registration Statement, an “Issuer Free Writing Prospectus” (as defined in Rule 433 under the Securities Act) or other materials prepared by the Company, each Registering Stockholder represents and agrees that it (i) shall not make any offer relating to the Registrable Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a Free Writing Prospectus, and (ii) has not distributed and will not distribute any written materials in connection with the offer or sale pursuant to a Registration Statement of Registrable Securities without the prior written consent of the Company and, in connection with any Public Offering, the underwriters.

 

Section 2.15.       Information from Registering Stockholders; Obligations of Registering Stockholders .

 

(a)                 It shall be a condition precedent to the obligations of the Company to include the Registrable Securities of any Registering Stockholder that has requested inclusion of its Registrable Securities in any Registration Statement or related prospectus, as the case may be, that such Registering Stockholder shall take the actions described in this Section 2.15 .

 

(b)                Each Registering Stockholder that has requested inclusion of its Registrable Securities in any Registration Statement shall (i) furnish to the Company (as a condition precedent to such Registering Stockholder’s participation in such registration) in writing such information with respect to such Registering Stockholder, its ownership of Company Securities and the intended method of disposition of its Registrable Securities as the Company may reasonably request or as may be required by law or regulations for use in connection with any related Registration Statement or prospectus (or amendment or supplement thereto) and all information required to be disclosed in order to make the information previously furnished to the Company by such Registering Stockholder not contain a material misstatement of fact or necessary to cause such Registration Statement or prospectus (or amendment or supplement thereto) not to omit a material fact with respect to such Registering Stockholder necessary in order to make the statements therein not misleading and (ii) comply with the Securities Act and the Exchange Act and all applicable state securities laws and comply with all applicable regulations in connection with the registration and the disposition of Registrable Securities.

 

(c)                 Each Registering Stockholder shall promptly (i) following its actual knowledge thereof, notify the Company of the occurrence of any event that makes any statement made in a Registration Statement, prospectus, Issuer Free Writing Prospectus or other Free Writing Prospectus regarding such Registering Stockholder untrue in any material respect or that requires the making of any changes in a Registration Statement, prospectus or Free Writing Prospectus so that, in such regard, it shall not contain any untrue statement of a material fact or omit any material fact required to be stated therein or necessary to make the statements not misleading and (ii) provide the Company with such information as may be required to enable the Company to prepare a supplement or post-effective amendment to any such Registration Statement or a supplement to such prospectus or Free Writing Prospectus.

 

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(d)                Each Registering Stockholder shall use commercially reasonable efforts to cooperate with the Company in preparing the applicable Registration Statement.

 

(e)                 Each Stockholder agrees that no Stockholder shall be entitled to sell any Registrable Securities pursuant to a Registration Statement or to receive a prospectus relating thereto unless such Stockholder has furnished the Company with all information required to be included in such Registration Statement by applicable securities laws in connection with the disposition of such Registrable Securities as reasonably requested by the Company.

 

(f)                 Notwithstanding anything to the contrary herein, no Registering Stockholder shall be required to make any representations or warranties to or agreements with the Company, the underwriters of any underwritten Public Offering, or any other Person in connection with a disposition of Registrable Securities other than representations, warranties or agreements regarding such Registering Stockholder, such Registering Stockholder's ownership of Registrable Securities and such Registering Stockholder's intended method of distribution of Registrable Securities.

 

ARTICLE 3
Board of Directors

 

Section 3.01.       Board of Directors .

 

(a)                 Board Nominees. Immediately after the consummation of the Initial Public Offering, the Board shall initially consist of six directors. The Board may increase or decrease the number of Directors, subject to the rights of Holdings under this Agreement and Applicable Governance Rules, in accordance with the Charter and By-laws. Immediately after the consummation of the Initial Public Offering, of such six directors:

 

(i)                  the number of directors permitted to be designated by Holdings pursuant to Section 3.02 shall be those designated by Holdings (such persons, the “ Holdings Nominees ”); and

 

(ii)                 two shall be independent directors permitted by SEC rules to serve on the Company’s audit committee after applicable phase-in periods have expired (such persons, the “ Audit Committee Independent Directors ”) who shall be designated by the Board and at least one of which shall be an audit committee financial expert under the NASDAQ Stock Market Rules or SEC rules as currently in effect.

 

In addition, within one year after the date of the initial listing of the Class A Common Stock on NASDAQ for the Initial Public Offering, one additional Audit Committee Independent Director shall be appointed.

 

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(b)                Holdings Nominees. With respect to any Holdings Nominees after the date of the Initial Public Offering, Holdings shall designate the Holdings Nominees by delivering to the Company its written statement at least (i) 10 days following their receipt of written notice from the Company to the Holdings notifying Holdings of the setting of the date of the first annual meeting after the date of the Initial Public Offering, in the case of the first annual meeting after the date of the Initial Public Offering, and (ii) 60 days prior to the one year anniversary of the preceding annual meeting, in the case of subsequent annual meetings, designating the Holdings Nominees and setting forth such Holdings Nominees’ business address, telephone number, facsimile number and e-mail address; provided, that if Holdings shall fail to deliver such written notice, Holdings shall be deemed to have nominated the Holdings Nominees previously designated. The Company hereby agrees that at each annual meeting of stockholders of the Company, subject to any rights of the holders of shares of any class or series of preferred stock of the Company, the Company shall ensure that the directors required to be nominated pursuant to this Article 3 shall be nominated at such annual meeting and shall use its reasonable best efforts to cause the Holdings Nominees to be elected to the Board.

 

(c)                 Committees. The Board shall have a nominating and corporate governance committee, a compensation committee, an audit committee and such other committees as the Board may determine (collectively, the “ Committees ”). Subject to Section 3.02 :

 

(i)                  the audit committee shall consist of at least three Audit Committee Independent Directors, subject to the exceptions provided by the applicable transition periods under Rule 10A-3 of the Exchange Act and the NASDAQ Stock Market Rules, and Holdings shall have the right to designate the members thereof; and

 

(ii)                 each other Committee shall consist of at least three directors, and Holdings shall have the right to designate the members thereof;

 

provided, however, that: (i) the membership of each Committee shall meet the requirements of Applicable Governance Rules (after giving effect to applicable transition periods, if any), and (ii) each Committee shall have such additional members as the Board may determine, which determination shall be made on the recommendation of the nominating and corporate governance committee. Each Committee shall have such powers and responsibilities as the Board may from time to time authorize.

 

(d)                Removal and Replacement of Directors. If a vacancy is created on the Board or a Committee as a result of the death, disability, retirement, resignation or removal of any Holdings Nominee, then Holdings shall have the right to designate such person’s replacement. No Holdings Nominee shall be required to resign or be removed from the Board or any committee thereof as a result of a decrease in the size of the Board or any committee thereof, except as required by Applicable Governance Rules.

 

Section 3.02.       Reduction and Termination of Holdings’ Rights .

 

(a)                 Board Nominees . Notwithstanding anything to the contrary in this Agreement, after the Initial Public Offering the number of Holdings Nominees that may be designated by Holdings or any Person designated by Holdings pursuant to Section 3.01(a)(i) shall be reduced and the number of other directors shall be increased, based on the percentage of the total Shares of the Company then beneficially owned by the MacAndrews Stockholders so that the Holdings Nominees constitute:

 

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(i)                 a majority of the directors on the Board (and if the number of directors on the Board is even, one director more than 50% of the number of directors on the Board) if the MacAndrews Stockholders beneficially own greater than 50% of the outstanding Shares of the Company;

 

(ii)                one less than a majority of the directors on the Board (and if the number of directors on the Board is even, 50% of the number of directors on the Board) if the MacAndrews Stockholders beneficially own greater than 25% but less than 50% of the outstanding Shares of the Company;

 

(iii)              one-third of the directors on the Board (rounded down to the nearest whole number) if the MacAndrews Stockholders beneficially own greater than 10% but less than 25% of the outstanding Shares of the Company; and

 

(iv)              no directors if the MacAndrews Stockholders beneficially own less than 10% of the outstanding Shares of the Company.

 

Holdings shall cause the appropriate number of Holdings Nominees to resign as required to comply with this Section 3.02 upon the earlier to occur of (i) the date on which the current term of the resigning Holdings Nominee ends, and (ii) 12 months from the occurrence of such event. To the extent deemed reasonably necessary by the Board to comply with Applicable Governance Rules (including with respect to composition of committees), Holdings shall designate Independent Directors as Holdings Nominees; provided that directors who are affiliated with a MacAndrews Party shall not be automatically deemed not to be Independent Directors.

 

(b)                Committees . Notwithstanding anything to the contrary in this Agreement, if the MacAndrews Stockholders beneficially own less than 25% of the outstanding Shares of the Company, Holdings shall cease to have the rights to designate members of Committees pursuant to Section 3.01(c) .

 

ARTICLE 4
Termination

 

Section 4.01.       Termination. This Agreement shall terminate when the MacAndrews Stockholders beneficially own less than 2.5% of the outstanding Shares; provided, however, that any Stockholder that ceases to own beneficially any Registrable Securities shall cease to be bound by the terms hereof other than (i) Sections 2.05 , 2.06 , 2.07 , 2.08 and 2.10 applicable to such Stockholder with respect to any offering of Registrable Securities completed before the date such Stockholder ceased to own any Registrable Securities) and (ii) Sections 5.01 , 5.02 and 5.04 through 5.12 .

 

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ARTICLE 5
Miscellaneous

 

Section 5.01.       Successors and Assigns. (a) This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors, legal representatives and permitted assigns.

 

(b)                Subject to Section 2.12 , neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by any party.

 

(c)                 Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the parties hereto, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

 

(d)                if and to the extent Holdings is dissolved or liquidated, the MacAndrews Stockholders holding Shares shall be the successors of Holdings, and references to “Holdings” herein shall be references to such successors of Holdings, collectively, and the Company shall (and shall cause its Subsidiaries to) enter into such amendments and supplements hereto to effectuate the intent of this Section 5.01(d) .

 

Section 5.02.       Notices . All notices, requests and other communications to any party hereunder shall be in writing (including facsimile or electronic transmission) and shall be given,

 

if to the Company, to:

 

vTv Therapeutics Inc.
4170 Mendenhall Oaks Pkwy

High Point, NC 27265

Attention: Stephen L. Holcombe

 

with a copy to:

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas

New York, NY 10019

Facsimile: (212) 492-0052
Attention: Lawrence G. Wee, Esq.

if to Holdings, to:

 

c/o MacAndrews & Forbes Incorporated

35 East 62nd Street

New York, NY 10065

Facsimile: (212) 572-5695

Attention: Paul G. Savas

 

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or such other address or facsimile number as such party may hereafter specify for the purpose by notice to the other parties hereto. All notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Any Person that becomes a Stockholder shall provide its address and fax number to the Company, which shall promptly provide such information to each other Stockholder.

 

Section 5.03.       Amendments and Waivers . Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Company and Stockholders holding more than 50% of the remaining Registrable Securities; provided that any amendment or waiver of the provisions of Article 3 , to the extent adverse in any respect to Holdings, shall require the written consent of Holdings. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

 

Section 5.04.       Governing Law . The corporate law of the State of Delaware shall govern all issues and questions concerning the relative rights of the Company and its stockholders pursuant to Article 3 hereto. All other issues and questions concerning the construction, validity, interpretation and enforcement of this Agreement and the exhibits and schedules hereto shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the choice of law or conflicts of law provisions that would indicate the applicability of the laws of any other jurisdiction.

 

Section 5.05.       Jurisdiction . The parties hereby agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in New York City, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.

 

Section 5.06.       WAIVER OF JURY TRIAL . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

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Section 5.07.       Specific Enforcement . Each party hereto acknowledges that the remedies at law of the other parties for a breach or threatened breach of this Agreement would be inadequate and, in recognition of this fact, any party to this Agreement, without posting any bond, and in addition to all other remedies that may be available, shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy that may then be available.

 

Section 5.08.       Counterparts; Effectiveness; Third Party Beneficiaries . This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each initial party hereto shall have received a counterpart hereof signed by all of the other initial parties hereto. Until and unless each initial party has received a counterpart hereof signed by the other initial parties hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication). No provision of this Agreement is intended to confer any rights, benefits, remedies, obligations, or liabilities hereunder upon any Person other than the parties hereto and their respective successors and assigns.

 

Section 5.09.       Entire Agreement . This Agreement, together with the Schedules and Exhibit hereto and any documents, instruments and writings that are delivered pursuant hereto, constitutes the entire agreement among the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, among the parties hereto with respect to the subject matter of this Agreement.

 

Section 5.10.       Severability . If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner so that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

 

Section 5.11.       Sophisticated Parties; Advice of Counsel . Each of the parties to this Agreement specifically acknowledges that (i) it is a knowledgeable, informed, sophisticated Person capable of understanding and evaluating the provisions set forth in this Agreement and (ii) it has been fully advised and represented by legal counsel of its own independent selection and has relied wholly upon its independent judgment and the advice of such counsel in negotiating and entering into this Agreement.

 

Section 5.12.       Certificate of Incorporation Supersedes . Nothing in this Agreement is intended to conflict with any provision of the Charter or By-laws, each in effect on the date hereof and, in the event of any such conflict, the applicable provisions of the Charter or By-laws shall supersede the conflicting provision of this Agreement. Except as provided in Article 3 , nothing in this Agreement is intended to limit or restrict in any manner whatsoever, the rights or powers of the Company under the Charter or By-laws and the exercise of any such right or power by the Company shall not be, and shall not be construed to be, a breach or violation of, or a default under, this Agreement or any provision hereof.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

  VTV THERAPEUTICS INC.
   
   
  By: /s/ Stephen L. Holcombe
    Name: Stephen L. Holcombe  
    Title: President and CEO  

 

[Signature Page to Investor Rights Agreement]

 

 
 
  VTV THERAPEUTICS HOLDINGS LLC
   
   
  By: /s/ Stephen L. Holcombe  
    Name: Stephen L. Holcombe  
    Title: President  
         

 

[Signature Page to Investor Rights Agreement]

 

 
 

 

EXHIBIT A

 

JOINDER TO INVESTOR RIGHTS AGREEMENT

 

This Joinder Agreement (this “ Joinder Agreement ”) is made as of the date written below by the undersigned (the “ Joining Party ”) in accordance with the Investor Rights Agreement dated as of _________, 2015 (the “ Investor Rights Agreement ”) among vTv Therapeutics Inc. and the other parties thereto, as the same may be amended from time to time. Capitalized terms used, but not defined, herein shall have the meaning ascribed to such terms in the Investor Rights Agreement.

 

The Joining Party hereby acknowledges, agrees and confirms that, by its execution of this Joinder Agreement, the Joining Party shall be deemed to be a party to the Investor Rights Agreement as of the date hereof and shall have all of the rights and obligations of a “Stockholder” thereunder as if it had executed the Investor Rights Agreement. The Joining Party hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Investor Rights Agreement.

 

IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as of the date written below.

 

Date: ___________ ___, ______

 

  [NAME OF JOINING PARTY]
   
   
  By:  
    Name:  
    Title:  
       
  Address for Notices:  

 

 
 

 

SCHEDULE 1

 

Plan of Distribution

 

A selling stockholder may also enter into hedging and/or monetization transactions. For example, a selling stockholder may:

 

(a) enter into transactions involving short sales of the shares of Class A common stock by underwriters, brokers, dealers or third parties;

 

(b) itself sell short Class A common stock and deliver the shares to close out any short positions;

 

(c) enter into options, forwards or other transactions that require the selling stockholder to deliver Class A common stock to an underwriter, broker, dealer or other third party who may then resell or otherwise transfer that common stock under this prospectus; or

 

(d) loan or pledge shares of Class A common stock to an underwriter, broker, dealer or other third party who may sell the loaned shares or, in an event of default, sell the pledged shares.

 

 

 
 

Exhibit 10.4

 

EXCHANGE AGREEMENT

 

EXCHANGE AGREEMENT (this “ Agreement ”), dated as of July 29, 2015, by and among vTv Therapeutics LLC, a Delaware limited liability company (the “ Company ”), vTv Therapeutics Inc., a Delaware corporation (“ Pubco ”), and vTv Therapeutics Holdings LLC (“ Holdings ” and together with any person that executes a joinder as set forth in Section 4.01 hereof, the “ Holders ” and each, a “ Holder ”).

 

W I T N E S S E T H:

 

WHEREAS, on the date hereof, the Company, Pubco and Holdings entered into the LLC Agreement;

 

WHEREAS, the parties hereto desire to provide for the exchange of Nonvoting Common Units together with shares of Class B Common Stock for (i) shares of Class A Common Stock (as defined below) or (ii) cash, in any case, on the terms and subject to the conditions set forth herein;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein made and other good and valuable consideration, the parties hereto hereby agree as set forth herein.

 

Article I

DEFINITIONS AND USAGE

 

Section 1.01         Definitions .

 

(a)           The following terms shall have the following meanings for the purposes of this Agreement:

 

Affiliate ” shall have the meaning set forth in Rule 405 under the Securities Act (as in effect on the date hereof).

 

Applicable Law ” means, with respect to any Person, any federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority or Regulatory Agency that is binding upon or applicable to such Person or its assets, as amended unless expressly specified otherwise.

 

Business Day ” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Applicable Law to close.

 

Class A Common Stock ” means Class A common stock, $0.01 par value per share, of Pubco.

 

Class B Common Stock ” means Class B common stock, $0.01 par value per share, of Pubco.

 

 
 

Code ” means the Internal Revenue Code of 1986, as amended from time to time.

 

Deliverable Common Stock ” means Class A Common Stock deliverable in connection with the Exchange of a Paired Interest as set forth herein.

 

Determination Date ” means the third Trading Day prior to the Exchange Date.

 

Disposition Event ” means any merger, consolidation or other business combination of Pubco, whether effectuated through one transaction or a series of related transactions (including a tender offer followed by a merger in which the holders of Class A Common Stock receive the same consideration per share paid in the tender offer), unless, following such transaction, all or substantially all of the holders of the voting power of all outstanding classes of common stock of Pubco and series of preferred stock of Pubco that are generally entitled to vote in the election of directors of Pubco prior to such transaction or series of transactions, continue to hold a majority of the voting power of the surviving entity (or its parent) resulting from such transaction or series of transactions in substantially the same proportions as immediately prior to such transaction or series of transaction.

 

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

Exchange Date ” means the date of effectiveness of an Exchange, or, in the case of a Synthetic Secondary Offering, immediately prior to the time which such Synthetic Secondary Offering closes.

 

Exchange Rate ” means the number of shares of Class A Common Stock for which one Paired Interest is entitled to be Exchanged. On the date of this Agreement, the Exchange Rate shall be one, subject to adjustment pursuant to Section 2.03 of this Agreement.

 

Exchanging Holder ” means a Holder effecting an Exchange pursuant to this Agreement.

 

Fair Market Value ” of Class A Common Stock with respect to any Exchange Date shall be determined as follows:

 

(i)                  If Class A Common Stock is then traded on a national securities exchange, then such Fair Market Value shall equal the VWAP of such Class A Common Stock;

 

(ii)                If Class A Common Stock is then traded on the over-the-counter system, then such Fair Market Value shall be the average of the closing bid and ask prices of a share of such Class A Common Stock over the prior 20 Trading Days ending on the Determination Date; and

 

(iii)              If there is then no public market for the Class A Common Stock, then such Fair Market Value shall be the highest price per share which could be obtained from a willing buyer (not a current employee or director of the Company or Pubco) for a share of Class A Common Stock sold from authorized but unissued shares, as determined in good faith by the board of directors of Pubco.

 

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Notwithstanding the foregoing, in connection with a Synthetic Secondary Offering, the Fair Market Value per share of Class A Common Stock shall be the amount of proceeds per share of Class A Common Stock, net of underwriting discounts, received by the Company in such Synthetic Secondary Offering.

 

Governmental Authority ” means any transnational, domestic or foreign federal, state or local governmental, regulatory or administrative authority, department, court, agency or official, including any political subdivision thereof.

 

Investor Rights Agreement ” means that certain Investor Rights Agreement, dated as of July 29, 2015, by and between Pubco and Holdings (and its successors and assigns), as the same may be amended, restated, supplemented and/or otherwise modified, from time to time.

 

LLC Agreement ” means the Amended and Restated Limited Liability Company Agreement of the Company, dated on or about the date hereof, as such agreement may be amended from time to time.

 

MacAndrews Stockholder ” means each of Holdings, MacAndrews & Forbes Incorporated and M&F TTP Holdings LLC and each of their respective Affiliates (other than Pubco and its subsidiaries).

 

Market Disruption Event ” means a failure by the Principal Market to open for trading during its regular trading session.

 

Nonvoting Common Units ” means the Nonvoting Common Units of the Company (as such term is defined in the LLC Agreement).

 

Paired Interest ” means one Nonvoting Common Unit together with one share of Class B Common Stock, subject to adjustment pursuant to Section 2.03(a) .

 

Person ” means any individual, firm, corporation, partnership, limited liability company, trust, estate, joint venture, governmental authority or other entity.

 

Principal Market ” means (i) NASDAQ, if the Class A Common Stock is listed on NASDAQ, (ii) the principal U.S. national or regional securities exchange on which the Class A Common Stock is listed, if the Class A Common Stock is not listed on NASDAQ or (iii) the principal market on which the Class A Common Stock is then traded, if the Class A Common Stock is not listed on NASDAQ or any other U.S. national or regional securities exchange.

 

Pubco Charter ” means the Amended and Restated Certificate of Incorporation of Pubco.

 

Regulatory Agency ” means the United States Securities and Exchange Commission, Financial Industry Regulatory Authority, Inc., the Financial Services Authority, any non-U.S. regulatory agency and any other regulatory authority or body (including any state or provincial securities authority and any self-regulatory organization) with jurisdiction over the Company or any of its Subsidiaries.

 

Securities Act ” means the United States Securities Act of 1933, as amended, and the rules and regulations thereunder.

 

Securities Exchange ” means the national securities exchange on which the Class A Common Stock is traded.

 

Synthetic Secondary Offering ” means an offering by the Company of shares of Class A Common Stock to generate net proceeds to pay cash in an Exchange of Paired Interests pursuant to Section 2.01 .

 

Tax Receivable Agreement ” shall mean that certain Tax Receivable Agreement, dated as of July 29, 2015, by and among Pubco and each of the parties identified as Members therein, including Holdings (and its successors and assigns) for the benefit of M&F TTP Holdings, LLC, as the same may be amended, restated, supplemented and/or otherwise modified, from time to time.

 

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Trading Day ” means a day on which (i) trading in securities generally occurs on the Principal Market, (ii) a volume weighted average price for the Class A Common Stock is able to be calculated with respect to the Principal Market and (iii) there is no Market Disruption Event with respect to the Principal Market.

 

VWAP ” means the dollar volume weighted average price for the Class A Common Stock on a national securities exchange for the 20 consecutive Trading Day period ending on the Determination Date as reported by Bloomberg Financial Markets (“ Bloomberg ”), or, if no dollar volume weighted average price is reported for the Class A Common Stock by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets;” provided , however , that the calculation of VWAP for a particular Trading Day shall exclude any block trade of 10,000 shares or greater that is executed on such day.

 

(b)         Capitalized terms used but not defined herein shall have the meaning ascribed thereto in the LLC Agreement.

 

(c)           Each of the following terms is defined in the Section set forth opposite such term:

 

Term Section
Agreement Preamble
Company Preamble
e-mail 4.03
Exchange 2.01
Exchange Agent 2.02(a)
Holder Preamble
Holdings Preamble
Notice of Exchange 2.02(a)
Permitted Transferee 4.01
Process Agent 4.05(b)
Pubco Preamble
Pubco Offer 2.04(a)

 

Section 1.02         Other Definitional and Interpretative Provisions . The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles and Sections are to Articles and Sections of this Agreement unless otherwise specified. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. References to “law”, “laws” or to a particular statute or law shall be deemed also to include any Applicable Law. Unless otherwise expressly provided herein, when any approval, consent or other matter requires any action or approval of any group of Holders, including any holders of any class of Paired Interests, such approval, consent or other matter shall require the approval of a majority in interest of such group of Holders. Except to the extent otherwise expressly provided herein, all references to any Holder shall be deemed to refer solely to such Person in its capacity as such Holder and not in any other capacity.

 

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Article II
EXCHANGE

 

Section 2.01         Exchange of Paired Interests for Class A Common Stock . From and after the execution and delivery of this Agreement, each Holder shall be entitled at any time and from time to time upon the terms and subject to the conditions hereof, to surrender Paired Interests to Pubco (subject to adjustment as provided in Section 2.03 ) in exchange (such exchange, an “ Exchange ”) for, at the option of Pubco (in its capacity as managing member of the Company) (i) the delivery to such Holder of a number of shares of Class A Common Stock that is equal to the product of the number of Paired Interests surrendered multiplied by the Exchange Rate in effect as of immediately prior to the close of business on the Exchange Date or (ii) cash in an amount equal to the Fair Market Value of the shares of Class A Common Stock such Holder would have otherwise received pursuant to clause (i).

 

Section 2.02         Exchange Procedures; Notices and Revocations .

 

(a)         A Holder may exercise the right to effect an Exchange as set forth in Section 2.01 by delivering a written notice of exchange in respect of the Paired Interests to be Exchanged substantially in the form of Exhibit A hereto (the “ Notice of Exchange ”), duly executed by such Holder or such Holder’s duly authorized attorney, to Pubco at least 10 Business Days (or such shorter period of time as may be agreed by Pubco) in advance of the Exchange Date at Pubco’s address set forth in Section 4.03 during normal business hours, or if any agent for the Exchange is duly appointed and acting (the “ Exchange Agent ”), to the office of the Exchange Agent during normal business hours. The Notice of Exchange must set forth (i) the Exchange Date, which shall be at least 10 Business Days (or such shorter period of time as may be agreed by Pubco) after the date of the Notice of Exchange and (ii) the number of Paired Interests to be surrendered, which number shall not be less than 1,000 unless (x) the number of surrendered Paired Interests constitutes all of such Holder’s Paired Interests or (y) the Company or Holdings consents to such Exchange.

 

(b)          Contingent Notice of Exchange and Revocation by Holders .

 

(i)                  A Notice of Exchange from a Holder may specify that the Exchange is to be contingent (including as to the timing) upon the consummation of a purchase by another Person (whether in a tender or exchange offer, an underwritten offering or otherwise) of shares of Deliverable Common Stock into which the Paired Interests are exchangeable, or contingent (including as to timing) upon the closing of an announced merger, consolidation or other transaction or event in which the Deliverable Common Stock would be exchanged or converted or become exchangeable for or convertible into cash or other securities or property. For the avoidance of doubt, a Notice of Exchange delivered in connection with a Synthetic Secondary Offering (i) may be subject to the condition that a price per share of Class A Common Stock that is acceptable to the Holder in its sole and absolute discretion be received in such Synthetic Secondary Offering and (ii) may be deemed made in part only with respect to the number of Paired Interests that are able to be paid for using the proceeds (net of underwriting discounts) from such Synthetic Secondary Offering pursuant to Section 2.01 .

 

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(ii)                Notwithstanding anything herein to the contrary, a Holder may withdraw or amend a Notice of Exchange, in whole or in part, prior to the effectiveness of the Exchange, at any time prior to 5:00 p.m. New York City time, on the Business Day immediately preceding the Exchange Date (or any such later time as may be required by Applicable Law) by delivery of a written notice of withdrawal to Pubco or the Exchange Agent, specifying (1) the number of withdrawn Paired Interests, (2) if any, the number of Paired Interests as to which the Notice of Exchange remains in effect and (3) if the Holder so determines, a new Exchange Date or any other new or revised information permitted in the Notice of Exchange.

 

(c)         Each Exchange shall be deemed to be effective immediately prior to the close of business on the Exchange Date, and, from and after that time, (i) the Exchanging Holder (or other Person(s) whose name or names in which the Deliverable Common Stock is to be issued) shall be deemed to be a holder of Deliverable Common Stock, if any, or (ii) such Exchanging Holder’s (or other Person’s or Persons’ whose name or names in which the cash is to be delivered) right to receive cash, if any, shall vest. As promptly as practicable on or after the Exchange Date, Pubco shall deliver or cause to be delivered to the Exchanging Holder (or other Person(s) whose name or names in which the Deliverable Common Stock is to be issued or cash is to be paid) (1) the number of shares of Deliverable Common Stock deliverable upon such Exchange, if any, pursuant to Section 2.01 hereof, registered in the name of such Holder (or other Person(s) whose name or names in which the Deliverable Common Stock is to be issued) or (2) an amount of cash to which such Holder or such other Person(s) is entitled pursuant to Section 2.01 hereof, if any, by wire transfer of immediately available funds to the account or accounts designated by such Holder or such other Person(s) in the Notice of Exchange. To the extent an Exchanging Holder (or other Person(s) to which the Deliverable Common Stock is to be issued) is entitled to receive Deliverable Common Stock pursuant to Section 2.01 hereof, and the Deliverable Common Stock is settled through the facilities of The Depository Trust Company, Pubco will, subject to Section 2.02(d) below, upon the written instruction of an Exchanging Holder, deliver or cause to be delivered the shares of Deliverable Common Stock deliverable to such Holder (or other Person(s) whose name or names in which the Deliverable Common Stock is to be issued), through the facilities of The Depository Trust Company, to the account of the participant of The Depository Trust Company designated by such Holder.

 

(d)         The shares of Deliverable Common Stock issued upon an Exchange, if any, shall bear a legend in substantially the following form:

 

THE TRANSFER OF THESE SECURITIES HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTION, AND MAY NOT BE SOLD OR TRANSFERRED OTHER THAN IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED (OR OTHER APPLICABLE LAW), OR AN EXEMPTION THEREFROM.

 

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(e)         If (i) any shares of Deliverable Common Stock may be sold pursuant to a registration statement that has been declared effective by the Securities and Exchange Commission, (ii) all of the applicable conditions of Rule 144 are met, or (iii) the legend (or a portion thereof) otherwise ceases to be applicable, Pubco, as applicable, upon the written request of the Holder thereof shall promptly provide such Holder or its respective transferees, without any expense to such Persons (other than applicable transfer taxes and similar governmental charges, if any) with new certificates (or evidence of book-entry share) for securities of like tenor not bearing the provisions of the legend with respect to which the restriction has terminated. In connection therewith, such Holder shall provide Pubco with such information in its possession as Pubco may reasonably request in connection with the removal of any such legend.

 

(f)         Pubco shall bear all expenses in connection with the consummation of any Exchange, whether or not any such Exchange is ultimately consummated, including any transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by reason of, any Exchange; provided , however , that if any shares of Deliverable Common Stock are to be delivered in a name other than that of the Holder that requested the Exchange (or The Depository Trust Company or its nominee for the account of a participant of The Depository Trust Company that will hold the shares for the account of such Holder), then such Holder and/or the Person in whose name such shares are to be delivered shall pay to Pubco the amount of any transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by reason of, such Exchange or shall establish to the reasonable satisfaction of Pubco that such tax has been paid or is not payable.

 

(g)         Notwithstanding anything to the contrary in this Article II , a Holder shall not be entitled to effect an Exchange, and Pubco and the Company shall have the right to refuse to honor any request to effect an Exchange, at any time or during any period, if Pubco or the Company shall reasonably determine that such Exchange (i) would be prohibited by any Applicable Law (including the unavailability of any requisite registration statement filed under the Securities Act or any exemption from the registration requirements thereunder), or (ii) would not be permitted under (x) the LLC Agreement, (y) other agreements with Pubco, the Company or any of the Company’s subsidiaries to which such Exchanging Holder may be party or (z) any written policies of Pubco, the Company or any of the Company’s subsidiaries related to unlawful or inappropriate trading applicable to its directors, officers or other personnel. Upon such determination, Pubco or the Company (as applicable) shall notify the Holder requesting the Exchange of such determination, which such notice shall include an explanation in reasonable detail as to the reason that the Exchange has not been honored.

 

(h)         The parties hereto acknowledge and agree that Pubco’s determination of the settlement method (issuance of Deliverable Common Stock or payment of cash) for any Exchange shall be made by the entire board of directors of Pubco acting on behalf of Pubco in its capacity as managing member of the Company.

 

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Section 2.03         Adjustment .

 

(a)         The Exchange Rate with respect to Paired Interests shall be adjusted accordingly if there is: (i) any subdivision (by any stock or unit split, stock or unit dividend or distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse stock or unit split, reclassification, reorganization, recapitalization or otherwise) of the shares of Class B Common Stock or Nonvoting Common Units that is not accompanied by a substantively identical subdivision or combination of the Class A Common Stock; or (ii) any subdivision (by any stock split, stock dividend, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse stock split, reclassification, reorganization, recapitalization or otherwise) of the Class A Common Stock that is not accompanied by a substantively identical subdivision or combination of the shares of Class B Common Stock and Nonvoting Common Units. If there is any reclassification, reorganization, recapitalization or other similar transaction in which the Class A Common Stock is converted or changed into another security, securities or other property, then upon any subsequent Exchange, an Exchanging Holder or such other Person(s) shall be entitled to receive the amount of such security, securities or other property that such Exchanging Holder or such other Person(s) would have received if such Exchange had occurred immediately prior to the effective date of such reclassification, reorganization, recapitalization or other similar transaction, taking into account any adjustment as a result of any subdivision (by any split, dividend or distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse split, reclassification, reorganization, recapitalization or otherwise) of such security, securities or other property that occurs after the effective time of such reclassification, reorganization, recapitalization or other similar transaction. For the avoidance of doubt, if there is any reclassification, reorganization, recapitalization or other similar transaction in which the Class A Common Stock is converted or changed into another security, securities or other property, this Section 2.03(a) shall continue to be applicable, mutatis mutandis , with respect to such security or other property. This Agreement shall apply to, mutatis mutandis , and all references to “Paired Interests” shall be deemed to include, any security, securities or other property of Pubco or the Company which may be issued in respect of, in exchange for or in substitution of shares of Class B Common Stock or Nonvoting Common Units, as applicable, by reason of stock or unit split, reverse stock or unit split, stock or unit dividend or distribution, combination, reclassification, reorganization, recapitalization, merger, exchange (other than an Exchange) or other transaction.

 

(b)         This Agreement shall apply to the Paired Interests held by the Holders and their Permitted Transferees as of the date hereof, as well as any Paired Interests hereafter acquired by a Holder and his or her or its Permitted Transferees.

 

Section 2.04         Tender Offers and Other Events with Respect to Pubco .

 

(a)         In the event that a tender offer, share exchange offer, issuer bid, take-over bid, recapitalization or similar transaction with respect to Class A Common Stock (a “ Pubco Offer ”) is proposed by Pubco or is proposed to Pubco or its stockholders and approved by the board of directors of Pubco or is otherwise effected or to be effected with the consent or approval of the board of directors of Pubco, the Holders of Paired Interests shall be permitted to participate in such Pubco Offer by delivery of a Notice of Exchange (which Notice of Exchange shall be effective immediately prior to the consummation of such Pubco Offer (and, for the avoidance of doubt, shall be contingent upon such Pubco Offer and not be effective if such Pubco Offer is not consummated)). In the case of a Pubco Offer proposed by Pubco, Pubco will use its reasonable best efforts expeditiously and in good faith to take all such actions and do all such things as are necessary or desirable to enable and permit the Holders of Paired Interests to participate in such Pubco Offer to the same extent or on an economically equivalent basis as the holders of shares of Class A Common Stock without discrimination; provided , that without limiting the generality of this sentence, Pubco will use its reasonable best efforts expeditiously and in good faith to ensure that such Holders may participate in each such Pubco Offer without being required to Exchange Paired Interests. For the avoidance of doubt (but subject to Section 2.04(c) ), in no event shall the Holders of Paired Interests be entitled to receive in such Pubco Offer aggregate consideration for each Paired Interest that is greater than the consideration payable in respect of each share of Class A Common Stock in connection with a Pubco Offer.

 

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(b)         Notwithstanding any other provision of this Agreement, if a Disposition Event is approved by the board of directors of Pubco and consummated in accordance with Applicable Law, at the request of the Company (or following such Disposition Event, its successor) or Pubco (or following such Disposition Event, its successor), each of the Holders shall be required to exchange with Pubco, at any time and from time to time after, or simultaneously with, the consummation of such Disposition Event, all of such Holder’s Paired Interests for aggregate consideration for each Paired Interest that is equivalent to the consideration payable in respect of each share of Class A Common Stock in connection with the Disposition Event, provided , however , that in the event of a Disposition Event intended to qualify as a reorganization within the meaning of Section 368(a) of the Code or as a transfer described in Section 351(a) or Section 721 of the Code, a Holder shall not be required to exchange Paired Interest pursuant to this Section 2.04(b) unless, as a part of such transaction, the Holders are permitted to exchange their Paired Interest for securities in a transaction that is expected to permit such exchange without current recognition of gain or loss, for U.S. and non-U.S. tax purposes, for the direct and indirect holders of Paired Interests (except to the extent that property other than securities is received in such exchange), based on a “should” or “will” level opinion from independent tax counsel of recognized standing and expertise.

 

(c)         Notwithstanding any other provision of this Agreement,  in a Disposition Event or other Pubco Offer, payments under or in respect of the Tax Receivable Agreement shall not be considered part of the consideration payable in respect of any Paired Interest or share of Class A Common Stock in connection with such Disposition Event or other Pubco Offer for the purposes of Section 2.04(a) and Section 2.04(b).

 

Section 2.05         Listing of Deliverable Common Stock . If the Class A Common Stock is listed on a securities exchange, Pubco shall use its reasonable best efforts to cause all Class A Common Stock issued upon an exchange of Paired Interests to be listed on the same securities exchange at the time of such issuance.

 

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Section 2.06         Deliverable Common Stock to be Issued; Class B Common Stock to be Cancelled .

 

(a)         Pubco shall at all times reserve and keep available out of its authorized but unissued Class A Common Stock, solely for the purpose of issuance upon an Exchange, the maximum number of shares of Deliverable Common Stock as shall be deliverable upon Exchange of all then-outstanding Paired Interests; provided , that nothing contained herein shall be construed to preclude Pubco from satisfying its obligations in respect of an Exchange by (i) payment of cash as permitted by the terms of this agreement or (ii) delivery of shares of Deliverable Common Stock that are held in the treasury of Pubco or any of its subsidiaries or by delivery of purchased shares of Deliverable Common Stock (which may or may not be held in the treasury of Pubco or any subsidiary thereof). Pubco covenants that all shares of Deliverable Common Stock issued upon an Exchange, if any, will, upon issuance thereof, be validly issued, fully paid and non-assessable.

 

(b)         When a Paired Interest has been Exchanged in accordance with this Agreement, (i) the share of Class B Common Stock corresponding to such Paired Interest shall be cancelled by Pubco and (ii) the Nonvoting Common Unit corresponding to such Paired Interest shall be deemed transferred from the Exchanging Holder to Pubco and the Company shall cause such transfer to be registered in the books and records of the Company.

 

(c)         Pubco agrees that it has taken all or will take such steps as may be required to cause to qualify for exemption under Rule 16b-3(d) or (e), as applicable, under the Exchange Act, and to be exempt for purposes of Section 16(b) under the Exchange Act, any acquisitions from, or dispositions to, Pubco of equity securities of Pubco (including derivative securities with respect thereto) and any securities that may be deemed to be equity securities or derivative securities of Pubco for such purposes that result from the transactions contemplated by this Agreement, by each officer or director of Pubco, including any director by deputization. The authorizing resolutions shall be approved by either Pubco’s board of directors or a committee composed solely of two or more Non-Employee Directors (as defined in Rule 16b-3) of Pubco.

 

Section 2.07         Distributions . No Exchange shall impair the right of the Exchanging Holder to receive any distributions payable on the Nonvoting Common Units so exchanged in respect of a record date that occurs prior to the Exchange Date for such Exchange. No adjustments in respect of dividends or distributions on any Nonvoting Common Unit will be made on the Exchange of any Paired Interest, and if the Exchange Date with respect to a Nonvoting Common Unit occurs after the record date for the payment of a dividend or other distribution on Nonvoting Common Units but before the date of the payment, then the registered holder of the Nonvoting Common Unit at the close of business on the record date will be entitled to receive the dividend or other distribution payable on the Nonvoting Common Unit on the payment date (without duplication of any distribution to which such holder may be entitled under Section 5.03(e) of the LLC Agreement in respect of taxes) notwithstanding the Exchange of the Paired Interests or a default in payment of the dividend or distribution due on the Exchange Date. For the avoidance of doubt, no Exchanging Holder shall be entitled to receive, in respect of a single record date, distributions or dividends both on Nonvoting Common Units exchanged by such Holder and on shares of Deliverable Common Stock received by such Holder in such Exchange.

 

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Article III
REPRESENTATIONS AND WARRANTIES

 

Section 3.01         Representations and Warranties of Pubco and of the Company . Each of Pubco and the Company represents and warrants that (i) it is a corporation or limited liability company, as applicable, duly incorporated or formed and is existing in good standing under the laws of the State of Delaware, (ii) it has all requisite corporate or limited liability company power and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby and, in the case of Pubco, to issue the Deliverable Common Stock in accordance with the terms hereof, (iii) the execution and delivery of this Agreement by it and the consummation by it of the transactions contemplated hereby (including, without limitation, in the case of Pubco, the issuance of the Deliverable Common Stock) have been duly authorized by all necessary corporate or limited liability company action on its part and (iv) this Agreement constitutes a legal, valid and binding obligation of it enforceable against it in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.

 

Section 3.02         Representations and Warranties of the Holders . Each Holder, as to itself and not to any other Holder, severally and not jointly, represents and warrants that (i) if it is not a natural person, that it is duly incorporated or formed and, the extent such concept exists in its jurisdiction of organization, is in good standing under the laws of such jurisdiction, (ii) it has all requisite legal capacity and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby, (iii) if it is not a natural person, the execution and delivery of this Agreement by it of the transactions contemplated hereby have been duly authorized by all necessary corporate or other entity action on the part of such Holder and (iv) this Agreement constitutes a legal, valid and binding obligation of such Holder enforceable against it in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.

 

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Article IV
MISCELLANEOUS

 

Section 4.01         Additional Holders . To the extent a Holder validly transfers any or all of such Holder’s Paired Interests to another Person (including by Holdings to any member thereof) in a transaction in accordance with, and not in contravention of, the LLC Agreement or the Investor Rights Agreement, then such transferee (each, a “ Permitted Transferee ”) shall have the right to execute and deliver a joinder to this Agreement, substantially in the form of Exhibit B hereto, whereupon such Permitted Transferee shall become a Holder hereunder. To the extent the Company issues Nonvoting Common Units in the future, then the holder of such Nonvoting Common Units shall have the right to execute and deliver a joinder to this Agreement, substantially in the form of Exhibit B hereto, whereupon such holder shall become a Holder hereunder.

 

Section 4.02         Further Assurances . Each party hereto agrees to execute, acknowledge, deliver, file and record such further certificates, amendments, instruments and documents, and to do all such other acts and things, as may be required by law or as, in the reasonable judgment of Pubco, may be necessary or advisable to carry out the intent and purposes of this Agreement.

 

Section 4.03         Notices . All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission and electronic mail (“ e-mail ”) transmission, so long as a receipt of such e-mail is requested and received by non-automated response) and shall be given:

 

(a)   if to Pubco or the Company, to:
     
    Stephen L. Holcombe, President and CEO
4170 Mendenhall Oaks Parkway
High Point, NC 27265
Facsimile: (336) 841-0310
E-mail: sholcombe@vtvtherapeutics.com
     
    with a copy (which shall not constitute notice) to:
     
   

Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019-6064

    Telephone: (212) 373-3000 
    Facsimile: (212) 757-3990
    Attention: Angelo Bonvino 
      Lawrence G. Wee 
    Email: abonvino@paulweiss.com 
      lwee@paulweiss.com
     
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    if to Holdings, to:
     
   

c/o MacAndrews & Forbes Incorporated 

35 East 62nd Street 

New York, NY 10065 

    Attention: Paul G. Savas 
    Facsimile: (212) 572-5695
     
    with a copy (which shall not constitute notice) to:
     
   

Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019-6064

    Telephone: (212) 373-3000 
    Facsimile: (212) 757-3990
    Attention: Angelo Bonvino 
      Lawrence G. Wee 
    Email: abonvino@paulweiss.com 
      lwee@paulweiss.com
       
(b)   if to any Holder (other than Holdings), to the address and other contact information set forth in the records of Pubco or the Company from time to time,

      

 or to such other address or facsimile number as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. New York City time on a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed to have been received on the next succeeding Business Day in the place of receipt.

 

Section 4.04         Binding Effect; Successors and Assigns . The provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. No provision of this Agreement is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the parties hereto and their respective successors and assigns. If and to the extent Holdings is dissolved or liquidated, the MacAndrews Stockholders holding Paired Interests shall be the successors of Holdings, and references to “Holdings” herein shall be references to such successors of Holdings, collectively, and the Pubco shall (and shall cause its subsidiaries to) enter into such amendments and supplements hereto to effectuate the intent of this Section 4.04 .

 

Section 4.05         Jurisdiction .

 

(a)           The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby (whether brought by any party or any of its Affiliates or against any party or any of its Affiliates) shall be brought in the Delaware Court of Chancery or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in  Section 4.03 shall be deemed effective service of process on such party.

 

13
 

(b)           EACH OF THE PUBCO, COMPANY AND HOLDINGS HEREBY IRREVOCABLY DESIGNATES THE CORPORATION SERVICE COMPANY (IN SUCH CAPACITY, THE “ Process Agent ”), WITH AN OFFICE AT 2711 CENTERVILLE ROAD, SUITE 400, WILMINGTON, NEW CASTLE COUNTY, DELAWARE 19808, AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, FOR AND ON ITS BEHALF SERVICE OF PROCESS IN SUCH JURISDICTION IN ANY LEGAL ACTION OR PROCEEDINGS WITH RESPECT TO THIS AGREEMENT OR ANY OTHER AGREEMENT EXECUTED IN CONNECTION WITH THIS AGREEMENT, AND SUCH SERVICE SHALL BE DEEMED COMPLETE UPON DELIVERY THEREOF TO THE PROCESS AGENT; PROVIDED THAT IN THE CASE OF ANY SUCH SERVICE UPON THE PROCESS AGENT, THE PARTY EFFECTING SUCH SERVICE SHALL ALSO DELIVER A COPY THEREOF TO EACH OTHER SUCH PARTY IN THE MANNER PROVIDED IN SECTION 4.03 OF THIS AGREEMENT. EACH PARTY SHALL TAKE ALL SUCH ACTION AS MAY BE NECESSARY TO CONTINUE SAID APPOINTMENT IN FULL FORCE AND EFFECT OR TO APPOINT ANOTHER AGENT SO THAT SUCH PARTY SHALL AT ALL TIMES HAVE AN AGENT FOR SERVICE OF PROCESS FOR THE ABOVE PURPOSES IN WILMINGTON, DELAWARE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE PROCESS IN ANY MANNER PERMITTED BY APPLICABLE LAW. EACH PARTY EXPRESSLY ACKNOWLEDGES THAT THE FOREGOING WAIVER IS INTENDED TO BE IRREVOCABLE UNDER THE LAWS OF THE STATE OF DELAWARE AND OF THE UNITED STATES OF AMERICA.

 

Section 4.06         WAIVER OF JURY TRIAL . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 4.07         Counterparts . This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Until and unless each party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).

 

Section 4.08         Entire Agreement . This Agreement, the LLC Agreement and the other Investor Rights Agreement constitute the entire agreement between the parties with respect to the subject matter of this Agreement and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement. Nothing in this Agreement shall create any third-party beneficiary rights in favor of any Person or other party hereto.

 

14
 

Section 4.09         Severability . If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.

 

Section 4.10         Amendment . This Agreement can be amended at any time and from time to time by written instrument signed by the Company, Pubco and Holdings; provided , however , that the consent of any other Holder under this agreement shall be required for any amendments that disproportionately materially adversely affect such Holder in relation to the other Holders hereunder.

 

Section 4.11         Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such State that would result in the application of the laws of any other State.

 

Section 4.12         Tax Treatment . This Agreement shall be treated as part of the LLC Agreement as described in Section 761(c) of the Code and Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury Regulations promulgated thereunder. As required by the Code and the Treasury Regulations, and except with respect to an Exchange occurring pursuant to the proviso to Section 2.04(b), the parties shall report any Exchange consummated hereunder as a taxable sale of the Nonvoting Common Units and shares of Class B Common Stock by a Holder to Pubco, and no party shall take a contrary position on any income tax return or amendment thereof unless an alternate position is permitted under the Code and Treasury Regulations and Pubco consents in writing.

 

Section 4.13         Independent Nature of Holders’ Rights and Obligations . The obligations of each Holder hereunder are several and not joint with the obligations of any other Holder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder under hereunder. The decision of each Holder to enter into to this Agreement has been made by such Holder independently of any other Holder. Nothing contained herein, and no action taken by any Holder pursuant hereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated hereby.

 

[ Signature page follows ]

 

15
 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first written above.

 

  PUBCO:
     
  VTV THERAPEUTICS INC.
     
  By: /s/ Stephen L. Holcombe
    Name: Stephen L. Holcombe
    Title: President and CEO
     
  COMPANY:
     
  VTV THERAPEUTICS LLC
     
  By: /s/ Stephen L. Holcombe
    Name: Stephen L. Holcombe
    Title: President and CEO
     
  HOLDINGS:
     
  VTV THERAPEUTICS HOLDINGS LLC
     
  By: /s/ Stephen L. Holcombe
    Name: Stephen L. Holcombe
    Title: President

 

 

 

[Signature Page to the Exchange Agreement]

 

 

 
 

EXHIBIT A

 

FORM OF
NOTICE OF EXCHANGE

 

vTv Therapeutics Inc.
4170 Mendenhall Oaks Parkway
High Point, NC 27265
Attention: General Counsel

vTv Therapeutics LLC
4170 Mendenhall Oaks Parkway
High Point, NC 27265
Attention: General Counsel

 

Reference is hereby made to the Exchange Agreement, dated as of July 29, 2015 (the “ Exchange Agreement ”), by and among vTv Therapeutics Inc., a Delaware corporation (“ Pubco ”), vTv Therapeutics LLC, a Delaware limited liability company (the “ Company ”), vTv Therapeutics Holdings LLC (“ Holdings ”) and the other Persons who become “Holders” as set forth therein. Capitalized terms used but not defined herein shall have the meanings given to them in the Exchange Agreement.

 

The undersigned desires to transfer to Pubco the number of (i) shares of Class B Common Stock plus Nonvoting Common Units set forth below (the “ Paired Interests ”) in exchange for, at the election of Pubco (i) shares of Class A Common Stock (the “ Deliverable Common Stock ”) to be issued in its name as set forth below, or (ii) cash, in accordance with the terms of the Exchange Agreement.

 

Legal Name of Holder:  
   
Address:  
   
   
   
   
Number of Paired Interests to be  
Exchanged:  
   
Exchange Date:  
   
Account Information for Wire Transfer  
(in the event of cash settlement of  
Exchange):  
   
   
   
   
 
 

Conditions Precedent to Notice of Exchange (attach additional sheets if necessary):

 

[_]
 
   
Special delivery instructions:  
   
   
   
   

 

The undersigned hereby represents and warrants that (i) the undersigned has full legal capacity to execute and deliver this Notice of Exchange and to perform the undersigned’s obligations hereunder; (ii) this Notice of Exchange has been duly executed and delivered by the undersigned and is the legal, valid and binding obligation of the undersigned enforceable against it in accordance with the terms thereof or hereof, as the case may be, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and the availability of equitable remedies; (iii) the Paired Interests subject to this Notice of Exchange are being transferred to Pubco free and clear of any pledge, lien, security interest, encumbrance, equities or claim; and (iv) no consent, approval, authorization, order, registration or qualification of any third party or with any court or governmental agency or body having jurisdiction over the undersigned or the Paired Interests subject to this Notice of Exchange is required to be obtained by the undersigned for the transfer of such Paired Interests to Pubco.

 

The undersigned hereby irrevocably constitutes and appoints any officer of Pubco as the attorney of the undersigned, with full power of substitution and resubstitution in the premises, to do any and all things and to take any and all actions that may be necessary to transfer to Pubco the Paired Interests subject to this Notice of Exchange and to deliver to the undersigned the shares of Deliverable Common Stock or cash, as applicable, to be delivered in Exchange therefor.

 

IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice of Exchange to be executed and delivered by the undersigned or by its duly authorized attorney.

 

   
  Name:
   
  Date:
   

 

 

 
 

EXHIBIT B

 

FORM OF 

JOINDER AGREEMENT

 

This Joinder Agreement (“ Joinder Agreement ”) is a joinder to the Exchange Agreement, dated as of July 29, 2015 (the “ Agreement ”), among vTv Therapeutics Inc., a Delaware corporation (“ Pubco ”), vTv Therapeutics LLC, a Delaware limited liability company (the “ Company ”), vTv Therapeutics Holdings LLC and the other Persons who become “Holders” as set forth therein. Capitalized terms used but not defined in this Joinder Agreement shall have their meanings given to them in the Agreement. This Joinder Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such State that would result in the application of the laws of any other State. In the event of any conflict between this Joinder Agreement and the Agreement, the terms of this Joinder Agreement shall control.

 

The undersigned, having acquired shares of Class B Common Stock and Nonvoting Common Units, hereby joins and enters into the Agreement. By signing and returning this Joinder Agreement to Pubco, the undersigned (i) accepts and agrees to be bound by and subject to all of the terms and conditions of and agreements of a Holder contained in the Agreement, with all attendant rights, duties and obligations of a Holder thereunder and (ii) makes each of the representations and warranties of a Holder set forth in Section 3.02 of the Agreement as fully as if such representations and warranties were set forth herein. The parties to the Agreement shall treat the execution and delivery hereof by the undersigned as the execution and delivery of the Agreement by the undersigned and, upon receipt of this Joinder Agreement by Pubco and by the Company, the signature of the undersigned set forth below shall constitute a counterpart signature to the signature page of the Agreement.

  

Name:    
     
Address for Notices:    
     
     
     
     
With Copies To:    
     
     
     

 

 
 

 

Exhibit 10.5

 

 

 

 

 

 

 

 

 

 

 

 

TAX RECEIVABLE AGREEMENT

 

among

 

vTv THERAPEUTICS INC.,

 

and

 

THE PERSONS NAMED HEREIN
 

 

 

 

 

 

 

 

 


 

 

Dated as of July 29 , 2015

 

 


 

 

 

 

 

 

 

 

 

 

 

 
 

 

TABLE OF CONTENTS

 

    Page
     
ARTICLE I DEFINITIONS 2
Section 1.01 Definitions 2
     
ARTICLE II DETERMINATION OF REALIZED TAX BENEFIT 10
Section 2.01 Basis Adjustment 10
Section 2.02 Realized Tax Benefit and Realized Tax Detriment 10
Section 2.03 Procedures, Amendments 11
     
ARTICLE III TAX BENEFIT PAYMENTS 12
Section 3.01 Payments. 12
Section 3.02 No Duplicative Payments 13
     
ARTICLE IV TERMINATION 13
Section 4.01 Termination, Early Termination and Breach of Agreement 13
Section 4.02 Early Termination Notice 15
Section 4.03 Payment upon Early Termination 15
     
ARTICLE V SUBORDINATION AND LATE PAYMENTS 15
Section 5.01 Subordination 15
Section 5.02 Late Payments by the Corporate Taxpayer 16
     
ARTICLE VI NO DISPUTES; CONSISTENCY; COOPERATION 16
Section 6.01 Participation in the Corporate Taxpayer’s and OpCo’s Tax Matters 16
Section 6.02 Consistency 16
Section 6.03 Cooperation 16
     
ARTICLE VII MISCELLANEOUS 17
Section 7.01 Notices 17
Section 7.02 Binding Effect; Benefit; Assignment 18
Section 7.03 Resolution of Disputes 18
Section 7.04 Counterparts 19
Section 7.05 Entire Agreement 19
Section 7.06 Severability 19
Section 7.07 Amendment 20
Section 7.08 Governing Law 20
Section 7.09 Reconciliation 20
Section 7.10 Withholding 21
Section 7.11 Admission of the Corporate Taxpayer into a Consolidated Group; Transfers of Corporate Assets 21
Section 7.12 Confidentiality 21
Section 7.13 Partnership Agreement 21

 

i
 

 

TAX RECEIVABLE AGREEMENT

 

This TAX RECEIVABLE AGREEMENT (as amended from time to time, this “ Agreement ”), dated as of July 29 , 2015, is hereby entered into by and among vTv Therapeutics Inc., a Delaware corporation (the “ Corporate Taxpayer ”), each of the undersigned parties hereto identified as “ Members ,” and each Person who is assigned rights by a Member and executes a joinder hereto as provided in Section 7.02(b).

 

RECITALS

 

WHEREAS, vTv Therapeutics LLC, a Delaware limited liability company (“ OpCo ”), is classified as a partnership for U.S. federal income tax purposes;

 

WHEREAS, the Corporate Taxpayer is classified as an association taxable as a corporation for U.S. federal income tax purposes;

 

WHEREAS, each Member holds non-voting common units in OpCo (the “ Non-Voting Common Units ”);

 

WHEREAS, the Corporate Taxpayer will use the net proceeds from the transactions described in the registration statement on Form S-1 initially filed with the Securities and Exchange Commission on June 15, 2015 (Registration No. 333-204951), as amended prior to the date hereof, including the initial public offering of shares of Class A common stock, $0.01 par value per share (“ Class A Common Stock ”) by the Corporate Taxpayer (the “ IPO ”), to acquire newly-issued Non-Voting Common Units in Opco directly from OpCo (the “ Capital Contribution ”);

 

WHEREAS, under the terms of the Exchange Agreement, each Member may exchange each Non-Voting Common Unit held by it, together with a corresponding share of Class B common stock, $0.01 par value per share, of the Corporate Taxpayer (“ Class B Common Stock ”), either for shares of Class A Common Stock, on a one-for-one basis, or cash (based on the market price of the shares of the Class A Common Stock), at the Corporate Taxpayer’s option.

 

WHEREAS, OpCo and each of its direct and indirect subsidiaries classified as a partnership for U.S. federal income tax purposes will have in effect an election under Section 754 of the Internal Revenue Code of 1986, as amended (the “ Code ”), for the Taxable Year (as defined below) in which an Exchange (as defined below) occurs, which election is intended to result in an adjustment to the tax basis of the assets owned by OpCo (solely with respect to the Corporate Taxpayer) at the time of an Exchange (such time, the “ Exchange Date ”) by reason of the Exchange and the receipt of certain payments under this Agreement;

 

WHEREAS, the income, gain, loss, expense and other Tax (as defined below) items of the Corporate Taxpayer may be affected by (i) the Basis Adjustment (as defined below) and (ii) Imputed Interest (as defined below); and

 

 
 

 

WHEREAS, the parties to this Agreement desire to make certain arrangements with respect to the effect of the Basis Adjustment and Imputed Interest on the actual liability for Taxes of the Corporate Taxpayer.

 

NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows:

 

Article I

DEFINITIONS

 

Section 1.01         Definitions .

 

(a)                 The following terms shall have the following meanings for the purposes of this Agreement:

 

Affiliate ” shall have the meaning set forth in Rule 405 under the Securities Act of 1933, as amended (as in effect on the date hereof).

 

Agreed Rate ” means LIBOR plus 100 basis points.

 

Applicable Member ” means any Member to whom any portion of a Realized Tax Benefit may be Attributable under this Agreement.

 

Attributable ” means, with respect to any Applicable Member, the portion of any Realized Tax Benefit of the Corporate Taxpayer that is “attributable” to such Applicable Member, which shall be determined by reference to the assets from which arise the depreciation, amortization or other similar deductions for recovery of cost or basis (“ Depreciation ”) and with respect to increased basis upon a disposition of an asset or Imputed Interest that produce the Realized Tax Benefit, under the following principles:

 

(i)                  Any Realized Tax Benefit arising from a deduction to the Corporate Taxpayer with respect to a Taxable Year for Depreciation arising in respect of a Basis Adjustment to a Reference Asset resulting from an Exchange is Attributable to the Applicable Member to the extent that the ratio of all Depreciation for the Taxable Year in respect of Basis Adjustments resulting from all Exchanges by the Applicable Member bears to the aggregate of all Depreciation for the Taxable Year in respect of Basis Adjustments resulting from all Exchanges by the Applicable Members.

 

(ii)                Any Realized Tax Benefit arising from the disposition of a Reference Asset is Attributable to the Applicable Member to the extent that the ratio of all Basis Adjustments (to the extent not previously giving rise to Realized Tax Benefits) resulting from all Exchanges by the Applicable Member with respect to such Reference Asset bears to the aggregate of all Basis Adjustments (to the extent not previously giving rise to Realized Tax Benefits) with respect to such Reference Asset.

 

2
 

 

(iii)              Any Realized Tax Benefit arising from a deduction to the Corporate Taxpayer with respect to a Taxable Year in respect of Imputed Interest is Attributable to the Applicable Member that is required to include Imputed Interest in income (without regard to whether such Member is actually subject to tax thereon).

 

(iv)              For the avoidance of doubt, in the case of a Basis Adjustment with respect to an Exchange, depreciation, amortization or other similar deductions for recovery of cost of basis shall constitute Depreciation only to the extent that such depreciation, amortization or other similar deductions may produce a Realized Tax Benefit (and not to the extent that such depreciation, amortization or other similar deductions may be for the benefit of a Person other than the Corporate Taxpayer), as reasonably determined by the Corporate Taxpayer.

 

Basis Adjustment ” means the adjustment to the tax basis of a Reference Asset under Sections 732, 755 and 1012 of the Code and the Treasury Regulations promulgated thereunder (in situations where, as a result of one or more Exchanges, OpCo becomes classified as an entity that is disregarded as separate from its owner for U.S. federal income tax purposes) or under Sections 734(b), 743(b) and 755 of the Code and the Treasury Regulations promulgated thereunder (in situations where, following an Exchange, OpCo remains in existence as an entity for U.S. federal income tax purposes) and, in each case, comparable sections of state and local tax laws, as a result of (i) an Exchange and (ii) the payments made pursuant to this Agreement. For the avoidance of doubt, the amount of any Basis Adjustment resulting from an Exchange of one or more Non-Voting Common Units shall be determined without regard to any Pre-Exchange Transfer of such Non-Voting Common Units and as if any such Pre-Exchange Transfer had not occurred.

 

A “ Beneficial Owner ” of a security is a Person who directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares: (i) voting power, which includes the power to vote, or to direct the voting of, such security and/or (ii) investment power, which includes the power to dispose of, or to direct the disposition of, such security.

 

Board ” means the board of directors of the Corporate Taxpayer.

 

Business Day ” shall have the meaning ascribed to such term in the LLC Agreement.

 

Change of Control ” means the occurrence of any of the following events:

 

(i)                  any Person or any group of Persons acting together which would constitute a “group” for purposes of Section 13(d) of the Securities and Exchange Act of 1934, or any successor provisions thereto, other than any of the Permitted Holders, is or becomes the Beneficial Owner, directly or indirectly, of securities of the Corporate Taxpayer representing more than 50% of the combined voting power of the Corporate Taxpayer’s then outstanding voting securities; or

 

3
 

 

(ii)                  the following individuals cease for any reason to constitute a majority of the number of directors of the Corporate Taxpayer then serving: individuals who, on the IPO Date, constitute the Board and any new director whose appointment or election by the Board or nomination for election by the Corporate Taxpayer’s shareholders was approved or recommended by a vote of at least a majority of the directors then still in office who either were directors on the IPO Date or whose appointment, election or nomination for election was previously so approved or recommended by the directors referred to in this clause (ii); or

 

(iii)                 there is consummated a merger or consolidation of the Corporate Taxpayer with any other corporation or other entity, and, immediately after the consummation of such merger or consolidation, either (x) the Board immediately prior to the merger or consolidation does not constitute at least a majority of the board of directors of the company surviving the merger or, if the surviving company is a Subsidiary, the ultimate parent thereof, or (y) the voting securities of the Corporate Taxpayer immediately prior to such merger or consolidation do not continue to represent or are not converted into more than 50% of the combined voting power of the then outstanding voting securities of the Person resulting from such merger or consolidation or, if the surviving company is a Subsidiary, the ultimate parent thereof; or

 

(iv)                 the shareholders of the Corporate Taxpayer approve a plan of complete liquidation or dissolution of the Corporate Taxpayer or there is consummated an agreement or series of related agreements for the sale or other disposition, directly or indirectly, by the Corporate Taxpayer of all or substantially all of the Corporate Taxpayer’s assets, other than such sale or other disposition by the Corporate Taxpayer of all or substantially all of the Corporate Taxpayer’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned or beneficially owned, directly or indirectly, by (x) shareholders of the Corporate Taxpayer in substantially the same proportions as their ownership immediately prior to such sale or (y) the Permitted Holders.

 

Notwithstanding the foregoing, except with respect to clause (ii) and clause (iii)(x) above, (1) a “Change of Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which (a) the record or beneficial holders of the issued and outstanding shares of the Corporate Taxpayer immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in, and own substantially all of the shares of, an entity which owns all or substantially all of the assets of the Corporate Taxpayer immediately following such transaction or series of transactions, (b) no Person, other than a Permitted Holder, beneficially owns, directly or indirectly through one or more intermediaries, more than 50% of the voting power of the shares of an entity which owns all or substantially all of the assets of the Corporate Taxpayer immediately following such transaction or series of transactions; (2) any holding company whose only significant asset is shares of any direct or indirect parent of the Corporate Taxpayer shall not itself be considered a “Person” or “group” for purposes of this definition; (3) the transfer of assets between or among the Corporate Taxpayer and the Permitted Holders shall not itself constitute a Change of Control; (4) a Person or group of Persons shall not be deemed to have beneficial ownership of shares subject to a stock purchase agreement, merger agreement or similar agreement (or voting or option agreement related thereto) until the consummation of the transactions contemplated by such agreement; (5) any change in the relative beneficial ownership of the Permitted Holders that does not alter the overall beneficial ownership of the Permitted Holders shall not constitute a Change of Control; (6) the term “Change of Control” shall not include a merger or consolidation of the Corporate Taxpayer with or the sale, assignment, conveyance, transfer, lease or other disposition of all or substantially all of the Corporate Taxpayer’s assets to, an Affiliate incorporated or organized solely for the purpose of reincorporating or reorganizing the Corporate Taxpayer in another jurisdiction and/or for the sole purpose of forming or collapsing a holding company structure.

 

4
 

 

Corporate Taxpayer Return ” means the federal and/or state and/or local Tax Return, as applicable, of the Corporate Taxpayer filed with respect to Taxes of any Taxable Year.

 

Cumulative Net Realized Tax Benefit ” for a Taxable Year means the cumulative amount of Realized Tax Benefits for all Taxable Years of the Corporate Taxpayer, up to and including such Taxable Year, net of the cumulative amount of Realized Tax Detriments for the same period. The Realized Tax Benefit and Realized Tax Detriment for each Taxable Year shall be determined based on the most recent Tax Benefit Schedule or Amended Schedule, if any, in existence at the time of such determination.

 

Default Rate ” means LIBOR plus 500 basis points.

 

Determination ” shall have the meaning ascribed to such term in Section 1313(a) of the Code or similar provision of state and local tax law, as applicable, or any other event (including the execution of IRS Form 870-AD) that finally and conclusively establishes the amount of any liability for Tax and shall also include the acquiescence of the Corporate Taxpayer to the amount of any assessed liability for Tax.

 

Early Termination Date ” means the date of an Early Termination Notice for purposes of determining the Early Termination Payment.

 

Early Termination Rate ” means the lesser of (i) 6.5% per annum, compounded annually, and (ii) LIBOR plus 100 basis points.

 

Exchange ” means an acquisition of Non-Voting Common Units or a purchase of Non-Voting Common Units by OpCo or the Corporate Taxpayer, including by way of an exchange of stock of the Corporate Taxpayer for Non-Voting Common Units pursuant to the Exchange Agreement, in each case occurring on or after the date of this Agreement.

 

Exchange Agreement ” means the Exchange Agreement, dated as of the date hereof, by and among the Corporate Taxpayer, OpCo, Holdings (and its successors and assigns) and any other Person that becomes a “Holder” thereunder, as the same may be amended, restated, supplemented and/or otherwise modified, from time to time.

 

Governmental Authority ” means the government of any nation, state, territory, city, locality or other political subdivision thereof, any entity or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any court, quasi-governmental authority, self-regulatory organization, commission, tribunal, agency or any political or other subdivision, department, board, bureau, or branch or official of any of the foregoing.

 

5
 

 

Holdings ” means vTv Therapeutics Holdings LLC, a Delaware limited liability company.

 

Hypothetical Tax Liability ” means, with respect to any Taxable Year, the liability for Taxes of (i) the Corporate Taxpayer and (ii) without duplication, OpCo, but only with respect to Taxes imposed on OpCo or its Subsidiaries and allocable to the Corporate Taxpayer (or to the other members of the consolidated group of which the Corporate Taxpayer is the parent), in each case using the same methods, elections, conventions and similar practices used on the relevant Corporate Taxpayer Return, but (x) using the Non-Stepped Up Tax Basis as reflected on the Exchange Basis Schedule, including amendments thereto for the Taxable Year and (y) excluding any deduction attributable to Imputed Interest for the Taxable Year. For the avoidance of doubt, Hypothetical Tax Liability shall be determined without taking into account the carryover or carryback of any Tax item (or portions thereof) that is attributable to any of Basis Adjustments or Imputed Interest (which shall include Tax items that would not be available for use but for the prior use of Tax items relating to Basis Adjustments or Imputed Interest with respect to which there was no Realized Tax Benefit).

 

Imputed Interest ” shall mean any interest imputed under Section 1272, 1274 or 483 or other provision of the Code and any similar provision of state and local tax law with respect to the Corporate Taxpayer’s payment obligations under this Agreement.

 

IPO Date ” means the closing date of the IPO.

 

IRS ” means the U.S. Internal Revenue Service.

 

LIBOR ” means during any period, an interest rate per annum equal to the one-year LIBOR reported, on the date two days prior to the first day of such period, on the Telerate Page 3750 (or if such screen shall cease to be publicly available, as reported on Reuters Screen page “LIBOR01” or by any other publicly available source of such market rate) for London interbank offered rates for United States dollar deposits for such period.

 

LLC Agreement ” means the Amended and Restated Limited Liability Company Agreement of OpCo, dated as of the date hereof, as the same may be amended, restated, supplemented and/or otherwise modified, from time to time.

 

Market Value ” shall mean the closing price of the Class A Common Stock on the applicable Exchange Date on the national securities exchange or interdealer quotation system on which such Class A Common Stock is then traded or listed, as reported by the Wall Street Journal ; provided , that if the closing price is not reported by the Wall Street Journal for the applicable Exchange Date, then the Market Value shall mean the closing price of the Class A Common Stock on the Business Day immediately preceding such Exchange Date on the national securities exchange or interdealer quotation system on which such Class A Common Stock is then traded or listed, as reported by the Wall Street Journal ; provided , further , that if the Class A Common Stock is not then listed on a national securities exchange or interdealer quotation system, the Market Value shall mean the cash consideration paid for Class A Common Stock, or the fair market value of the other property delivered for Class A Common Stock, as determined by the Board in good faith.

 

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Non-Stepped Up Tax Basis ” means, with respect to any Reference Asset at any time, the Tax basis that such asset would have had at such time if no Basis Adjustments had been made.

 

Payment Date ” means any date on which a payment is required to be made pursuant to this Agreement.

 

Permitted Holder ” shall mean vTv Therapeutics Holdings LLC, vTvx Holdings I LLC, vTvx Holdings II LLC, M&F TTP Holdings LLC, MacAndrews & Forbes Incorporated, Ronald O. Perelman or any of his immediate family members, and their respective Affiliates and Related Parties.

 

Person ” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity.

 

Pre-Exchange Transfer ” means any transfer (including upon the death of a Member) or distribution in respect of one or more Non-Voting Common Units (i) that occurs prior to an Exchange of such Non-Voting Common Units, and (ii) to which Section 743(b) or 734(b) of the Code applies.

 

Realized Tax Benefit ” means, for a Taxable Year, the excess, if any, of the Hypothetical Tax Liability over the actual liability for Taxes of (i) the Corporate Taxpayer and (ii) without duplication, OpCo, but only with respect to Taxes imposed on OpCo and allocable to the Corporate Taxpayer (or to the other members of the consolidated group of which the Corporate Taxpayer is the parent) for such Taxable Year.  If all or a portion of the actual liability for such Taxes for the Taxable Year arises as a result of an audit by a Taxing Authority of any Taxable Year, such liability shall not be included in determining the Realized Tax Benefit unless and until there has been a Determination.

 

Realized Tax Detriment ” means, for a Taxable Year, the excess, if any, of the actual liability for Taxes of (i) the Corporate Taxpayer and (ii) without duplication, OpCo, but only with respect to Taxes imposed on OpCo and allocable to the Corporate Taxpayer (or to the other members of the consolidated group of which the Corporate Taxpayer is the parent) for such Taxable Year, over the Hypothetical Tax Liability for such Taxable Year.  If all or a portion of the actual liability for such Taxes for the Taxable Year arises as a result of an audit by a Taxing Authority of any Taxable Year, such liability shall not be included in determining the Realized Tax Detriment unless and until there has been a Determination.

 

Reference Asset ” means an asset that is held by OpCo, or by any of its direct or indirect subsidiaries treated as a partnership or disregarded entity for purposes of the applicable Tax, at the time of an Exchange. A Reference Asset also includes any asset that is “substituted basis property” under Section 7701(a)(42) of the Code with respect to a Reference Asset.

 

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Related Party ” shall mean, with respect to any Person, (a) any controlling stockholder, controlling member, general partner, subsidiary, spouse or immediate family member (in the case of an individual) of such Person, (b) any estate, trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners or owners of which consist solely of one or more Permitted Holders and/or such other Persons referred to in the immediately preceding clause (a), or (c) any executor, administrator, trustee, manager, director or other similar fiduciary of any Person referred to in the immediately preceding clause (b), acting solely in such capacity.

 

Schedule ” means any of the following: (i) an Exchange Basis Schedule, (ii) a Tax Benefit Schedule, or (iii) the Early Termination Schedule.

 

Subsidiaries ” shall have the meaning ascribed to such term in the LLC Agreement.

 

Tax Return ” means any return, declaration, report or similar statement required to be filed with respect to Taxes (including any attached schedules), including any information return, claim for refund, amended return and declaration of estimated Tax.

 

Taxable Year ” means a taxable year of the Corporate Taxpayer as defined in Section 441(b) of the Code or comparable section of state or local tax law, as applicable (and, therefore, for the avoidance of doubt, may include a period of less than 12 months for which a Tax Return is made), ending on or after the IPO Date.

 

Taxes ” means any and all U.S. federal, state and local taxes, assessments or similar charges that are based on or measured with respect to net income or profits, and any interest related to such Tax.

 

Taxing Authority ” shall mean any domestic, federal, national, state, county or municipal or other local government, any subdivision, agency, commission or authority thereof, or any quasi-governmental body exercising any taxing authority or any other authority exercising Tax regulatory authority.

 

Treasury Regulations ” means the final, temporary and proposed regulations under the Code promulgated from time to time (including corresponding provisions and succeeding provisions) as in effect for the relevant taxable period.

 

Valuation Assumptions ” shall mean, as of an Early Termination Date, the assumptions that (1) in each Taxable Year ending on or after such Early Termination Date, the Corporate Taxpayer will have taxable income sufficient to fully utilize the deductions arising from the Basis Adjustments and Imputed Interest during such Taxable Year or future Taxable Years (including, for the avoidance of doubt, Basis Adjustments and Imputed Interest that would result from future Tax Benefit Payments that would be paid in accordance with the Valuation Assumptions) in which such deductions would become available, (2) the U.S. federal income tax rates and state and local income tax rates that will be in effect for each such Taxable Year will be those specified for each such Taxable Year by the Code and other law as in effect on the Early Termination Date, (3) any loss carryovers generated by deductions arising from Basis Adjustments or Imputed Interest that are available as of such Early Termination Date will be utilized by the Corporate Taxpayer on a pro rata basis from the Early Termination Date through the scheduled expiration date of such loss carryovers, (4) any non-amortizable assets will be disposed of on the fifteenth anniversary of the applicable Basis Adjustment; provided , that in the event of a Change of Control, such non-amortizable assets shall be deemed disposed of at the time of sale of the relevant asset (if earlier than such fifteenth anniversary), and (5) if, at the Early Termination Date, there are Non-Voting Common Units that have not been Exchanged, then each such Non-Voting Common Unit shall be deemed to be Exchanged for the Market Value of the number of shares of Class A Common Stock and the amount of cash that would be transferred if the Exchange occurred on the Early Termination Date.

 

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(b)                Each of the following terms is defined in the Section set forth opposite such term:

 

Term   Section
Agreement   Preamble
Amended Schedule   2.03(b)
Class A Common Stock   Recitals
Class B Common Stock   Recitals
Code   Recitals
Corporate Taxpayer   Preamble
Dispute   7.03(a)
Early Termination Effective Date   4.02
Early Termination Notice   4.02
Early Termination Payment   4.03(b)
Early Termination Schedule   4.02
e-mail   7.01
Exchange Basis Schedule   2.01
Exchange Date   Recitals
Expert   7.09
Interest Amount   3.01(b)
Material Objection Notice   4.02
Members   Preamble
Net Tax Benefit   3.01(b)
Objection Notice   2.03(a)
OpCo   Recitals
Reconciliation Dispute   7.09
Reconciliation Procedures   2.03(a)
Senior Obligations   5.01
Tax Benefit Payment   3.01(b)
Tax Benefit Schedule   2.02(a)

 

(c)                 Other Definitional and Interpretative Provisions . The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles and Sections are to Articles and Sections of this Agreement unless otherwise specified. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.

 

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Article II

DETERMINATION OF REALIZED TAX BENEFIT

 

Section 2.01         Basis Adjustment . Within 120 calendar days after the filing of the U.S. federal income tax return of the Corporate Taxpayer for each Taxable Year in which any Exchange has been effected by any Member, the Corporate Taxpayer shall deliver to such Member a schedule (the “ Exchange Basis Schedule ”) that shows, in reasonable detail necessary to perform the calculations required by this Agreement, including with respect to each Exchanging party, (i) the Non-Stepped Up Tax Basis of the Reference Assets as of each applicable Exchange Date, (ii) the Basis Adjustments with respect to the Reference Assets as a result of the Exchanges effected in such Taxable Year, calculated (x) in the aggregate, (y) solely with respect to Exchanges by such Member and (z) in the case of a Basis Adjustment under Section 734(b) of the Code solely with respect to the amount that is available to the Corporate Taxpayer in such Taxable Year, (iii) the period (or periods) over which the Reference Assets are amortizable and/or depreciable and (iv) the period (or periods) over which each Basis Adjustment is amortizable and/or depreciable.

 

Section 2.02         Realized Tax Benefit and Realized Tax Detriment .

 

(a)                 Tax Benefit Schedule . Within 120 calendar days after the filing of the U.S. federal income tax return of the Corporate Taxpayer for any Taxable Year in which there is a Realized Tax Benefit or Realized Tax Detriment all or a portion of which is Attributable to a Member, the Corporate Taxpayer shall provide to such Member a schedule showing, in reasonable detail and, at the request of such Member, with respect to each separate Exchange, the calculation of the Realized Tax Benefit or Realized Tax Detriment and the portion Attributable to such Member for such Taxable Year (a “ Tax Benefit Schedule ”). The Tax Benefit Schedule will become final as provided in Section 2.03(a) and may be amended as provided in Section 2.03(b) (subject to the procedures set forth in Section 2.03(b)). 

 

(b)                Applicable Principles . The Realized Tax Benefit or Realized Tax Detriment for each Taxable Year is intended to measure the decrease or increase in the actual liability for Taxes of the Corporate Taxpayer for such Taxable Year attributable to the Basis Adjustments and Imputed Interest, determined using a “with and without” methodology. For the avoidance of doubt, the actual liability for Taxes will take into account the deduction of the portion of the Tax Benefit Payment that must be accounted for as interest under the Code based upon the characterization of Tax Benefit Payments as additional consideration payable by the Corporate Taxpayer for the Non-Voting Common Units acquired in an Exchange. Carryovers or carrybacks of any Tax item attributable to the Basis Adjustment or Imputed Interest shall be considered to be subject to the rules of the Code and the Treasury Regulations or the appropriate provisions of U.S. state and local income and franchise tax law, as applicable, governing the use, limitation and expiration of carryovers or carrybacks of the relevant type. If a carryover or carryback of any Tax item includes a portion that is attributable to the Basis Adjustment or Imputed Interest and another portion that is not, such portions shall be considered to be used in accordance with the “with and without” methodology. The parties agree that (i) all Tax Benefit Payments attributable to the Basis Adjustments (other than amounts accounted for as interest under the Code) will (A) be treated as subsequent upward purchase price adjustments that give rise to further Basis Adjustments to Reference Assets for the Corporate Taxpayer and (B) have the effect of creating additional Basis Adjustments to Reference Assets for the Corporate Taxpayer in the year of payment, and (ii) as a result, such additional Basis Adjustments will be incorporated into the current year calculation and into future year calculations, as appropriate.

 

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Section 2.03         Procedures, Amendments

 

(a)                 Procedure . Every time the Corporate Taxpayer delivers to a Member an applicable Schedule under this Agreement, including any Amended Schedule delivered pursuant to Section 2.03(b) and any Early Termination Schedule or amended Early Termination Schedule, the Corporate Taxpayer shall also (x) deliver to such Member schedules, valuation reports (if any), and work papers, as determined by the Corporate Taxpayer or requested by such Member, providing reasonable detail regarding the preparation of the Schedule and (y) allow such Member reasonable access at no cost to the appropriate representatives at the Corporate Taxpayer, as determined by the Corporate Taxpayer or requested by such Member, in connection with a review of such Schedule. Without limiting the application of the preceding sentence, each time the Corporate Taxpayer delivers to a Member a Tax Benefit Schedule, in addition to the Tax Benefit Schedule duly completed, the Corporate Taxpayer shall deliver to such Member the Corporate Taxpayer Return, the reasonably detailed calculation by the Corporate Taxpayer of the Hypothetical Tax Liability, the reasonably detailed calculation by the Corporate Taxpayer of the actual Tax liability, as well as any other work papers as determined by the Corporate Taxpayer or requested by such Member. An applicable Schedule or amendment thereto shall become final and binding on all parties 30 calendar days from the first date on which the Member has received the applicable Schedule or amendment thereto unless such Member (i) within 30 calendar days after receiving an applicable Schedule or amendment thereto, provides the Corporate Taxpayer with notice of a material objection to such Schedule (“ Objection Notice ”) made in good faith or (ii) provides a written waiver of such right of any Objection Notice within the period described in clause (i) above, in which case such Schedule or amendment thereto becomes binding on the date the waiver is received by the Corporate Taxpayer. If the parties, for any reason, are unable to successfully resolve the issues raised in the Objection Notice within 30 calendar days after receipt by the Corporate Taxpayer of an Objection Notice, the Corporate Taxpayer and the applicable Member shall employ the reconciliation procedures as described in Section 7.09 (the “ Reconciliation Procedures ”).

 

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(b)                Amended Schedule . The applicable Schedule for any Taxable Year may be amended from time to time by the Corporate Taxpayer (i) in connection with a Determination affecting such Schedule, (ii) to correct inaccuracies in the Schedule identified as a result of the receipt of additional factual information relating to a Taxable Year after the date the Schedule was provided to the applicable Member, (iii) to comply with the Expert’s determination under the Reconciliation Procedures, (iv) to reflect a change in the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year attributable to a carryback or carryforward of a loss or other tax item to such Taxable Year, (v) to reflect a change in the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year attributable to an amended Tax Return filed for such Taxable Year, or (vi) to adjust the Exchange Basis Schedule to take into account payments made pursuant to this Agreement (any such Schedule, an “ Amended Schedule ”). The Corporate Taxpayer shall provide an Amended Schedule to each Member within 30 calendar days of the occurrence of an event referenced in clauses (i) through (vi) of the preceding sentence.

  

Article III

TAX BENEFIT PAYMENTS

 

Section 3.01         Payments .

 

(a)                 Within five (5) Business Days after all of the Tax Benefit Schedules with respect to a Taxable Year are delivered to a Member pursuant to this Agreement, the Corporate Taxpayer shall pay to each Member for such Taxable Year the Tax Benefit Payment in the amount determined pursuant to Section 3.01(b).  Each such Tax Benefit Payment to a Member shall be made by wire transfer of immediately available funds to the bank account previously designated by such Member to the Corporate Taxpayer or as otherwise agreed by the Corporate Taxpayer and such Member.  For the avoidance of doubt, no Tax Benefit Payment shall be made in respect of estimated tax payments, including federal estimated income tax payments. Notwithstanding anything herein to the contrary, solely at the election of a Member, which shall be made in a written notice to the Corporate Taxpayer in connection with the applicable Exchange, in no event shall the aggregate Tax Benefit Payments in respect of such Exchange (other than amounts accounted for as interest under the Code) exceed 50% of the amount equal to the sum of (A) the cash, excluding any Tax Benefit Payments, and (B) the Market Value of the Class A Common Stock, received by such Member on such Exchange.

 

(b)                A “ Tax Benefit Payment ” in respect of a Member, means an amount, not less than zero, equal to the sum of the amount of the Net Tax Benefit Attributable to such Member and the related Interest Amount.  For the avoidance of doubt, for Tax purposes, the Interest Amount shall not be treated as interest but instead shall be treated as additional consideration for the acquisition of Non-Voting Common Units in Exchanges, unless otherwise required by law. The “ Net Tax Benefit for a Taxable Year shall be an amount equal to the excess, if any, of 85% of the Cumulative Net Realized Tax Benefit as of the end of such Taxable Year over the total amount of Tax Benefit Payments previously made under this Section 3.01 (excluding payments attributable to Interest Amounts); provided , for the avoidance of doubt, that such Member shall not be required to return any portion of any previously made Tax Benefit Payment. The “ Interest Amount ” shall equal the interest on the amount of the Net Tax Benefit Attributable to such Member calculated at the Agreed Rate from the due date (without extensions) for filing the Corporate Taxpayer Return with respect to Taxes for such Taxable Year until the Payment Date of the applicable Tax Benefit Payment. Notwithstanding the foregoing, unless the Member elects to receive the lump-sum payment pursuant to the following sentence, for each Taxable Year ending on or after the date of a Change of Control, all Tax Benefit Payments, whether paid with respect to the Non-Voting Common Units that were Exchanged (i) prior to the date of such Change of Control or (ii) on or after the date of such Change of Control, shall be calculated by utilizing Valuation Assumptions (1) and (3), substituting in each case the terms “the closing date of a Change of Control” for an “Early Termination Date.” In connection with any Change of Control, at the election of a Member, all obligations hereunder with respect to such Member shall be accelerated, and such obligations shall be calculated as if an Early Termination Notice had been delivered on the date of such election and shall include, but not be limited to, (1) the Early Termination Payment to such Member calculated as if an Early Termination Notice had been delivered on the date of such election, (2) any Tax Benefit Payment agreed to by the Corporate Taxpayer and such Member as due and payable but unpaid as of the date of such Member’s election, and (3) any Tax Benefit Payment due for the Taxable Year ending with or including the date of such Member’s election; provided , that procedures similar to the procedures of Section 4.02 shall apply with respect to the determination of the amount payable by the Corporate Taxpayer pursuant to this sentence.

 

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Section 3.02         No Duplicative Payments . It is intended that the provisions of this Agreement will not result in duplicative payment of any amount (including interest) required under this Agreement.  The provisions of this Agreement shall be construed in the appropriate manner to ensure such intentions are realized.

 

Article IV

TERMINATION

 

Section 4.01         Termination, Early Termination and Breach of Agreement .

 

(a)                 Unless terminated earlier pursuant to Section 4.01(b) or Section 4.01(c), this Agreement will terminate when there is no further potential for a Tax Benefit Payment pursuant to this Agreement.

 

(b)                The Corporate Taxpayer may terminate this Agreement with respect to all amounts payable to the Members and with respect to all of the Non-Voting Common Units held (or previously held and exchanged) by all Members at any time by paying to each Member the Early Termination Payment in respect of such Member; provided , however , that this Agreement shall only terminate pursuant to this Section 4.01(b) upon the receipt of the Early Termination Payment by all Members; and provided , further , that the Corporate Taxpayer may withdraw any notice to execute its termination rights under this Section 4.01(b) prior to the time at which any Early Termination Payment has been paid.  Upon payment of the Early Termination Payment by the Corporate Taxpayer in accordance with this Section 4.01(b), neither the Members nor the Corporate Taxpayer shall have any further payment obligations under this Agreement, other than for any (1) Tax Benefit Payment agreed to by the Corporate Taxpayer and a Member as due and payable but unpaid as of the Early Termination Notice and (2) Tax Benefit Payment due for the Taxable Year ending with or including the date of the Early Termination Notice (except to the extent that the amount described in clause (2) is included in the Early Termination Payment).  If an Exchange occurs after the Corporate Taxpayer makes the Early Termination Payment pursuant to this Section 4.01(b), the Corporate Taxpayer shall have no obligations under this Agreement with respect to such Exchange. If the Corporate Taxpayer terminates, or proposes to terminate, this Agreement by making, or proposing to make, the Early Termination Payment to the Members under such agreement, then each Member that is a party to this Agreement shall have the right to cause the Corporate Taxpayer to make an Early Termination Payment to such Member under this Agreement; provided that the procedures of this Article IV shall apply to such Early Termination Payment as if the Corporate Taxpayer had delivered an Early Termination Notice to such electing Members; provided further that a Member may elect to receive an Early Termination Payment pursuant to this sentence notwithstanding the fact that not all Members under this Agreement elect to receive such a payment.

 

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(c)                 In the event that the Corporate Taxpayer breaches any of its material obligations under this Agreement, whether as a result of failure to make any payment when due, failure to honor any other material obligation required hereunder or by operation of law as a result of the rejection of this Agreement in a case commenced under the Bankruptcy Code or otherwise, and does not cure such breach within ninety (90) days of receipt of notice of such breach, then all obligations hereunder shall be accelerated and such obligations shall be calculated as if an Early Termination Notice had been delivered on the date of such breach and shall include, but not be limited to, (1) the Early Termination Payment calculated as if an Early Termination Notice had been delivered on the date of a breach, (2) any Tax Benefit Payment agreed to by the Corporate Taxpayer and any Members as due and payable but unpaid as of the date of a breach, and (3) any Tax Benefit Payment due for the Taxable Year ending with or including the date of a breach; provided that procedures similar to the procedures of Section 4.02 shall apply with respect to the determination of the amount payable by the Corporate Taxpayer pursuant to this sentence.  Notwithstanding the foregoing, in the event that the Corporate Taxpayer breaches this Agreement, the Members shall be entitled to elect to receive the amounts set forth in clauses (1), (2) and (3) above or to seek specific performance of the terms hereof.  The parties agree that the failure to make any payment due pursuant to this Agreement within three months of the date such payment is due shall be deemed to be a breach of a material obligation under this Agreement for all purposes of this Agreement, and that it will not be considered to be a breach of a material obligation under this Agreement to make a payment due pursuant to this Agreement within three months of the date such payment is due. Notwithstanding anything in this Agreement to the contrary, it shall not be a breach of this Agreement if the Corporate Taxpayer fails to make any payment due pursuant to this Agreement when due to the extent the Corporate Taxpayer has insufficient funds to make such payment; provided that the interest provisions of Section 5.02 shall apply to such late payment (unless the Corporate Taxpayer does not have sufficient cash to make such payment as a result of limitations imposed by credit agreements to which the Corporate Taxpayer or its Subsidiaries is a party, in which case Section 5.02 shall apply, but the Default Rate shall be replaced by the Agreed Rate); provided , further , that the Corporate Taxpayer shall promptly (and in any event, within two (2) Business Days), pay all such unpaid payments, together with accrued and unpaid interest thereon, immediately following such time that the Corporate Taxpayer has, and to the extent the Corporate Taxpayer has, sufficient funds to make such payment, and the failure of the Corporate Taxpayer to do so shall constitute a breach of this Agreement. For the avoidance of doubt, all cash and cash equivalents used or to be used to pay dividends by, or repurchase equity securities of, the Corporate Taxpayer shall be deemed to be funds sufficient and available to pay such unpaid payments, together with any accrued and unpaid interest thereon.

 

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(d)                The undersigned hereby acknowledge and agree that the timing, amounts and aggregate value of Tax Benefit Payments pursuant to this Agreement are not reasonably ascertainable.

 

Section 4.02         Early Termination Notice . If the Corporate Taxpayer chooses to exercise its right of early termination under Section 4.01(b) above, the Corporate Taxpayer shall deliver to each Member notice of such intention to exercise such right (“ Early Termination Notice ”) and a schedule (the “ Early Termination Schedule ”) specifying the Corporate Taxpayer’s intention to exercise such right and showing in reasonable detail the calculation of the Early Termination Payment for such Member. The Early Termination Schedule shall become final and binding on such Member thirty (30) calendar days from the first date on which such Member has received such Schedule or amendment thereto unless such Member (i) within thirty (30) calendar days after receiving the Early Termination Schedule, provides the Corporate Taxpayer with notice of a material objection to such Schedule made in good faith (“ Material Objection Notice ”) or (ii) provides a written waiver of such right of a Material Objection Notice within the period described in clause (i) above, in which case such Schedule becomes binding on the date the waiver is received by the Corporate Taxpayer (such thirty (30) calendar day date as modified, if at all, by clauses (i) or (ii), the “ Early Termination Effective Date ”). If the Corporate Taxpayer and such Member, for any reason, are unable to successfully resolve the issues raised in such notice within thirty (30) calendar days after receipt by the Corporate Taxpayer of the Material Objection Notice, the Corporate Taxpayer and such Member shall employ the Reconciliation Procedures. 

 

Section 4.03         Payment upon Early Termination .

 

(a)                 Within three (3) Business Days after the Early Termination Effective Date, the Corporate Taxpayer shall pay to each Member an amount equal to the Early Termination Payment in respect of such Member. Such payment shall be made by wire transfer of immediately available funds to a bank account or accounts designated by such Member or as otherwise agreed by the Corporate Taxpayer and such Member.

 

(b)                Early Termination Payment ” in respect of a Member shall equal the present value, discounted at the Early Termination Rate as of the Early Termination Effective Date, of all Tax Benefit Payments in respect of such Member that would be required to be paid by the Corporate Taxpayer beginning from the Early Termination Date and assuming that the Valuation Assumptions are applied. 

 

Article V

 

SUBORDINATION AND LATE PAYMENTS

 

Section 5.01         Subordination . Notwithstanding any other provision of this Agreement to the contrary, any Tax Benefit Payment or Early Termination Payment required to be made by the Corporate Taxpayer to any Member under this Agreement shall rank subordinate and junior in right of payment to any principal, interest or other amounts due and payable in respect of any obligations in respect of indebtedness for borrowed money of the Corporate Taxpayer and its Subsidiaries (“Senior Obligations”) and shall rank pari passu with all current or future unsecured obligations of the Corporate Taxpayer that are not Senior Obligations.

 

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Section 5.02         Late Payments by the Corporate Taxpayer . The amount of all or any portion of any Tax Benefit Payment or Early Termination Payment not made to the applicable Member when due under the terms of this Agreement shall be payable together with any interest thereon, computed at the Default Rate and commencing from the date on which such Tax Benefit Payment or Early Termination Payment was due and payable. The Corporate Taxpayer shall promptly (and in any event, within two (2) Business Days), pay all unpaid Tax Benefit Payments and Early Termination Payments, together with accrued and unpaid interest thereon, immediately following such time that the Corporate Taxpayer has, and to the extent the Corporate Taxpayer has, sufficient funds to make such payment. For the avoidance of doubt, all cash and cash equivalents used or to be used to pay dividends by, or repurchase equity securities of, the Corporate Taxpayer shall be deemed to be funds sufficient and available to pay unpaid Tax Benefit Payments and Early Termination Payments, together with any accrued and unpaid interest thereon.

 

Article VI

 

NO DISPUTES; CONSISTENCY; COOPERATION

 

Section 6.01         Participation in the Corporate Taxpayer’s and OpCo’s Tax Matters . Except as otherwise provided herein, the Corporate Taxpayer shall have full responsibility for, and sole discretion over, all Tax matters concerning the Corporate Taxpayer and OpCo, including the preparation, filing or amending of any Tax Return and defending, contesting or settling any issue pertaining to Taxes. Notwithstanding the foregoing, the Corporate Taxpayer shall notify a Member of, and keep such Member reasonably informed with respect to, the portion of any audit of the Corporate Taxpayer and OpCo by a Taxing Authority the outcome of which is reasonably expected to affect the rights and obligations of such Member under this Agreement, and shall provide to such Member reasonable opportunity to provide information and other input to the Corporate Taxpayer, OpCo and their respective advisors concerning the conduct of any such portion of such audit; provided , however , that the Corporate Taxpayer and OpCo shall not be required to take any action that is inconsistent with any provision of the LLC Agreement.

 

Section 6.02         Consistency . The Corporate Taxpayer and the Members agree to report and cause to be reported for all purposes, including federal, state and local Tax purposes and financial reporting purposes, all Tax-related items (including the Basis Adjustments and each Tax Benefit Payment) in a manner consistent with that specified by the Corporate Taxpayer in any Schedule required to be provided by or on behalf of the Corporate Taxpayer under this Agreement unless otherwise required by law. Any dispute as to required Tax or financial reporting shall be subject to Section 7.09.

 

Section 6.03         Cooperation . Each of the Corporate Taxpayer and each Member shall (a) furnish to the other party in a timely manner such information, documents and other materials as the other party may reasonably request for purposes of making any determination or computation necessary or appropriate under this Agreement, preparing any Tax Return or contesting or defending any audit, examination or controversy with any Taxing Authority, (b) make itself available to the other party and its representatives to provide explanations of documents and materials and such other information as the other party or its representatives may reasonably request in connection with any of the matters described in clause (a) above, and (c) reasonably cooperate in connection with any such matter, and the Corporate Taxpayer shall reimburse the applicable Member for any reasonable third-party costs and expenses incurred pursuant to this Section 6.03.

 

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Article VII

 

MISCELLANEOUS

 

Section 7.01         Notices . All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission and electronic mail (“ e-mail ”) transmission, so long as a receipt of such e-mail is requested and received) and shall be given to such party as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

 

  If to the Corporate Taxpayer, to: 
   
  vTv Therapeutics Inc.
  4170 Mendenhall Oaks Pkwy
  High Point, NC 27265
  Telephone: (336) 841-0300
  Facsimile: (336) 841-0310
  Attention: Stephen L. Holcombe
  Email: sholcombe@vtvtherapeutics.com
   
  with a copy (which shall not constitute notice to the Corporate Taxpayer) to:
   
  Paul, Weiss, Rifkind, Wharton & Garrison LLP
  1285 Avenue of the Americas
  New York, NY  10019-6064
  Telephone: (212) 373-3000
  Facsimile: (212) 757-3990
  Attention: Jeffrey B. Samuels
    Lawrence G. Wee
  Email: jsamuels@paulweiss.com
    lwee@paulweiss.com
   
  If to the applicable Member, to the address, facsimile number or e-mail address specified for such party on the Member Schedule to the LLC Agreement.

 

All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. on a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed to have been received on the next succeeding Business Day in the place of receipt.

 

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Section 7.02         Binding Effect; Benefit; Assignment .

 

(a)                 The provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. No provision of this Agreement is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the parties hereto and their respective successors and assigns. The Corporate Taxpayer shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Corporate Taxpayer, by written agreement, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporate Taxpayer would be required to perform if no such succession had taken place.

 

(b)                A Member, in its sole discretion, may assign any of its rights under this Agreement (including in connection with a dissolution or liquidation of a Member) to any Person as long as such transferee has executed and delivered, or, in connection with such transfer, executes and delivers, a joinder to this Agreement, in form of Exhibit A, agreeing to become a “Member” for all purposes of this Agreement, except as otherwise provided in such joinder; provided , that a Member’s rights under this Agreement shall be assignable by such Member under the procedure in this Section 7.02(b) regardless of whether such Member continues to hold any interests in OpCo or the Corporate Taxpayer or has fully transferred any such interests.

 

Section 7.03         Resolution of Disputes .

 

(a)                 Except for Reconciliation Disputes subject to Section 7.09, any and all disputes which cannot be settled amicably, including any ancillary claims of any party, arising out of, relating to or in connection with the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement (including the validity, scope and enforceability of this arbitration provision) (each a “ Dispute ”) shall be finally settled by arbitration conducted by a single arbitrator in Delaware in accordance with the then-existing Rules of Arbitration of the International Chamber of Commerce. If the parties to the Dispute fail to agree on the selection of an arbitrator within ten (10) days of the receipt of the request for arbitration, the International Chamber of Commerce shall make the appointment. The arbitrator shall be a lawyer admitted to the practice of law in the State of Delaware and shall conduct the proceedings in the English language. Performance under this Agreement shall continue if reasonably possible during any arbitration proceedings. 

 

(b)                Notwithstanding the provisions of paragraph (a), the Corporate Taxpayer may bring an action or special proceeding in any court of competent jurisdiction for the purpose of compelling a party to arbitrate, seeking temporary or preliminary relief in aid of an arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this paragraph (b), each Member (i) expressly consents to the application of paragraph (c) of this Section 7.03 to any such action or proceeding, (ii) agrees that proof shall not be required that monetary damages for breach of the provisions of this Agreement would be difficult to calculate and that remedies at law would be inadequate, and (iii) irrevocably appoints the Corporate Taxpayer as agent of such Member for service of process in connection with any such action or proceeding and agrees that service of process upon such agent, who shall promptly advise such Member of any such service of process, shall be deemed in every respect effective service of process upon such Member in any such action or proceeding.

 

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(c)                 EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE CHANCERY COURT OF THE STATE OF DELAWARE OR, IF SUCH COURT DECLINES JURISDICTION, THE COURTS OF THE STATE OF DELAWARE SITTING IN WILMINGTON, DELAWARE, AND OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE SITTING IN WILMINGTON, DELAWARE, AND ANY APPELLATE COURT FROM ANY THEREOF, FOR THE PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 7.03, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such ancillary judicial proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or preliminary judicial relief in aid of arbitration, or to confirm an arbitration award. The parties acknowledge that the fora designated by this paragraph (c) have a reasonable relation to this Agreement, and to the parties’ relationship with one another.

 

(d)                The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter may have to personal jurisdiction or to the laying of venue of any such ancillary suit, action or proceeding brought in any court referred to in the preceding paragraph of this Section 7.03 and such parties agree not to plead or claim the same.

 

Section 7.04         Counterparts . This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Until and unless each party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).

 

Section 7.05         Entire Agreement . This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement. Nothing in this Agreement shall create any third-party beneficiary rights in favor of any Person or other party hereto.

 

Section 7.06         Severability . If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.

 

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Section 7.07         Amendment . No provision of this Agreement may be amended unless such amendment is approved in writing by the Corporate Taxpayer and by Persons who would be entitled to receive at least two-thirds of the Early Termination Payments payable to all Persons entitled to Early Termination Payments under this Agreement if the Corporate Taxpayer had exercised its right of early termination on the date of the most recent Exchange prior to such amendment (excluding, for purposes of this sentence, all payments made to any Persons pursuant to this Agreement since the date of such most recent Exchange); provided , that no such amendment shall be effective if such amendment will have a disproportionate effect on the payments certain Persons will or may receive under this Agreement unless all such Persons disproportionately affected consent in writing to such amendment. No provision of this Agreement may be waived unless such waiver is in writing and signed by the party against whom the waiver is to be effective.

 

Section 7.08         Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such State that would result in the application of the laws of any other State.

 

Section 7.09         Reconciliation . In the event that the Corporate Taxpayer and a Member are unable to resolve a disagreement with respect to the matters governed by Sections 2.03, 3.01(b), 4.02 and 6.02 within the relevant period designated in this Agreement (“ Reconciliation Dispute ”), the Reconciliation Dispute shall be submitted for determination to a nationally recognized expert (the “ Expert ”) in the particular area of disagreement mutually acceptable to both parties. The Expert shall be a partner or principal in a nationally recognized accounting or law firm, and unless the Corporate Taxpayer and such Member agree otherwise, the Expert shall not, and the firm that employs the Expert shall not, have any material relationship with the Corporate Taxpayer or such Member or other actual or potential conflict of interest. If the parties are unable to agree on an Expert within fifteen (15) calendar days of receipt by the respondent(s) of written notice of a Reconciliation Dispute, the Expert shall be appointed by the International Chamber of Commerce Centre for Expertise. The Expert shall resolve any matter relating to the Exchange Basis Schedule or an amendment thereto or the Early Termination Schedule or an amendment thereto within thirty (30) calendar days and shall resolve any matter relating to a Tax Benefit Schedule or an amendment thereto within fifteen (15) calendar days or as soon thereafter as is reasonably practicable, in each case after the matter has been submitted to the Expert for resolution.  Notwithstanding the preceding sentence, if the matter is not resolved before any payment that is the subject of a disagreement would be due (in the absence of such disagreement) or any Tax Return reflecting the subject of a disagreement is due, the undisputed amount shall be paid on the date prescribed by this Agreement and such Tax Return may be filed as prepared by the Corporate Taxpayer, subject to adjustment or amendment upon resolution.  The costs and expenses relating to the engagement of such Expert or amending any Tax Return shall be borne by the Corporate Taxpayer, except as provided in the next sentence.  The Corporate Taxpayer and such Member shall bear their own costs and expenses of such proceeding, unless (i) the Expert substantially adopts such Member’s position, in which case the Corporate Taxpayer shall reimburse such Member for any reasonable out-of-pocket costs and expenses in such proceeding, or (ii) the Expert substantially adopts the Corporate Taxpayer’s position, in which case such Member shall reimburse the Corporate Taxpayer for any reasonable out-of-pocket costs and expenses in such proceeding.  Any dispute as to whether a dispute is a Reconciliation Dispute within the meaning of this Section 7.09 shall be decided by the Expert.  The Expert shall finally determine any Reconciliation Dispute and the determinations of the Expert pursuant to this Section 7.09 shall be binding on the Corporate Taxpayer and such Member and may be entered and enforced in any court having jurisdiction. 

 

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Section 7.10         Withholding . The Corporate Taxpayer shall be entitled to deduct and withhold from any payment payable pursuant to this Agreement such amounts as the Corporate Taxpayer is required to deduct and withhold with respect to the making of such payment under the Code or any provision of state, local or foreign tax law. To the extent that amounts are so withheld and paid over to the appropriate Taxing Authority by the Corporate Taxpayer, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the applicable Member.

 

Section 7.11         Admission of the Corporate Taxpayer into a Consolidated Group; Transfers of Corporate Assets

 

(a)                 If the Corporate Taxpayer is or becomes a member of an affiliated or consolidated group of corporations that files a consolidated income tax return pursuant to Sections 1501 et seq. of the Code or any corresponding provisions of state or local law, then: (i) the provisions of this Agreement shall be applied with respect to the group as a whole; and (ii) Tax Benefit Payments, Early Termination Payments and other applicable items hereunder shall be computed with reference to the consolidated taxable income of the group as a whole.

 

(b)                If any entity that is obligated to make a Tax Benefit Payment or Early Termination Payment hereunder transfers one or more assets to a corporation (or a Person classified as a corporation for U.S. federal income tax purposes) with which such entity does not file a consolidated tax return pursuant to Section 1501 of the Code, such entity, for purposes of calculating the amount of any Tax Benefit Payment or Early Termination Payment (e.g., calculating the gross income of the entity and determining the Realized Tax Benefit of such entity) due hereunder, shall be treated as having disposed of such asset in a fully taxable transaction on the date of such contribution.  The consideration deemed to be received by such entity shall be equal to the fair market value of the contributed asset. For purposes of this Section 7.11, a transfer of a partnership interest shall be treated as a transfer of the transferring partner’s share of each of the assets and liabilities of that partnership.

 

Section 7.12         Confidentiality . Section 12.11 (Confidentiality) of the LLC Agreement as of the date of this Agreement shall apply to any information of the Corporate Taxpayer provided to the Members and their assignees pursuant to this Agreement.

 

Section 7.13         Partnership Agreement . This Agreement shall be treated as part of the partnership agreement of OpCo as described in Section 761(c) of the Code, and Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury Regulations.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the Corporate Taxpayer and each Member set forth below have duly executed this Agreement as of the date first written above.

 

  CORPORATE TAXPAYER :
   
  vTv Therapeutics Inc.
   
  By: /s/ Stephen L. Holcombe
  Name: Stephen L. Holcombe
  Title: President and Chief Executive Officer
       
  MEMBERS :
   
  vTv Therapeutics Holdings, LLC, for the benefit of M&F TTP Holdings, LLC
     
  /s/ Stephen L. Holcombe
  By: Stephen L. Holcombe
  Title: President
     
  M&F TTP Holdings, LLC
     
  /s/ Paul G. Savas
  By: Paul G. Savas
  Title: Executive Vice President and Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature Page to Tax Receivable Agreement

 

 
 

 

Exhibit A

  Form of Joinder

 

This JOINDER (this “ Joinder ”) to the Tax Receivable Agreement (as defined below), dated as of ____________, by and among vTv Therapeutics Inc., a Delaware corporation (the “ Corporate Taxpayer ”), and ______________ (“ Permitted Transferee ”).

 

WHEREAS, on ____________, Permitted Transferee acquired (the “ Acquisition ”) [___ Non-Voting Common Units][the right to receive any and all payments that may become due and payable under the Tax Receivable Agreement with respect to ___ Non-Voting Common Units that were previously Exchanged and are described in greater detail in Annex A to this Joinder] (collectively, “ Interests ” and, together with all other interests hereinafter acquired by the Permitted Transferee from Transferor, the “ Acquired Interests ”) from ______________ (“ Transferor ”); and

 

WHEREAS, Transferor, in connection with the Acquisition, has required Permitted Transferee to execute and deliver this Joinder pursuant to Section 7.02(b) of the Tax Receivable Agreement, dated as of [_________ ___], 2015, by and among the Corporate Taxpayer and each Member (as defined therein) (the “ Tax Receivable Agreement ”).

 

NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows:

 

Section 1.01 Definitions . To the extent capitalized words used in this Joinder are not defined in this Joinder, such words shall have the respective meanings set forth in the Tax Receivable Agreement.

 

Section 1.02 Joinder . Permitted Transferee hereby acknowledges and agrees to become a “Member” (as defined in the Tax Receivable Agreement) for all purposes of the Tax Receivable Agreement. Permitted Transferee hereby acknowledges the terms of Section 7.02(b) of the Tax Receivable Agreement and agrees to be bound by Section 7.12 of the Tax Receivable Agreement.

 

Section 1.03 Notice . Any notice, request, consent, claim, demand, approval, waiver or other communication hereunder to Permitted Transferee shall be delivered or sent to Permitted Transferee at the address set forth on the signature page hereto in accordance with Section 7.01 of the Tax Receivable Agreement.

 

Section 1.04 Governing Law . This Joinder shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such State that would result in the application of the laws of any other State.

 

 
 

 

IN WITNESS WHEREOF, this Joinder has been duly executed and delivered by Permitted Transferee as of the date first above written.

 

  [PERMITTED TRANSFEREE]
     
  By:  
  Name:  
  Title:  
   
   
  Address for notices:
   
   
   

 

 

 
 

 

Exhibit 10.6

 

vTv Therapeutics Inc. 2015 Omnibus Equity Incentive Plan

 

1.       Purpose . The vTv Therapeutics Inc. 2015 Omnibus Equity Incentive Plan (the “ Plan ”) is intended to help vTv Therapeutics Inc., a Delaware corporation (including any successor thereto, the “ Company ”) and its Affiliates (i) attract and retain key personnel by providing them the opportunity to acquire an equity interest in the Company or other incentive compensation measured by reference to the value of Common Stock and (ii) align the interests of key personnel with those of the Company’s shareholders.

 

2.       Effective Date; Duration. The Plan shall be effective as of July 29, 2015 (the “ Effective Date ”). The expiration date of the Plan, on and after which date no Awards may be granted, shall be the tenth anniversary of the Effective Date; provided , however , that such expiration shall not affect Awards then outstanding, and the terms and conditions of the Plan shall continue to apply to such Awards.

 

3.       Definitions. The following definitions shall apply throughout the Plan.

 

(a)                 Affiliate ” means (i) any person or entity that directly or indirectly controls, is controlled by or is under common control with the Company and/or (ii) to the extent provided by the Committee, any person or entity in which the Company has a significant interest. The term “control” (including, with correlative meaning, the terms “ controlled by” and “under common control with”), as applied to any person or entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person or entity, whether through the ownership of voting or other securities, by contract or otherwise.

 

(b)                Award ” means, individually or collectively, any Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Other Stock-Based Award and/or Performance Compensation Award granted under the Plan.

 

(c)                 Beneficial Ownership ” has the meaning set forth in Rule 13d-3 promulgated under Section 13 of the Exchange Act.

 

(d)                Board ” means the Board of Directors of the Company.

 

(e)                 Cause ” means, in the case of a particular Award, unless the applicable Award agreement states otherwise, the Company or an Affiliate having “cause” to terminate the Participant’s employment or service, (i) as such term is defined in any employment, consulting, change-in-control, severance or any other agreement between the Participant and the Company or an Affiliate in effect at the time of such termination or (ii) in the absence of any such employment, consulting, change-in-control, severance or any other agreement (or the absence of any definition of “cause” or term of similar import therein), due to the Participant’s (A) willful misconduct or gross neglect of his duties; (B) having engaged in conduct harmful (whether financially, reputationally or otherwise) to the Company or an Affiliate; (C) failure or refusal to perform his duties; (D) conviction of, or guilty or no contest plea to, a felony or any crime involving dishonesty or moral turpitude; (E) willful violation of the written policies of the Company or an Affiliate; (F) misappropriation or misuse of Company or Affiliate funds or property or other act of personal dishonesty in connection with his employment; or (G) willful breach of fiduciary duty. The determination of whether Cause exists shall be made by the Committee in its sole discretion.

 

(f)                 Change in Control ” shall, in the case of a particular Award, unless the applicable Award agreement (or any employment, consulting, change-in-control, severance or other agreement between the Participant and the Company or an Affiliate) states otherwise, be deemed to occur upon any of the following events:

 

 
 

(i)                  the acquisition by any Person of Beneficial Ownership of 50% or more (on a fully diluted basis) of either (A) the then outstanding shares of Common Stock, including Common Stock issuable upon the exercise of options or warrants, the conversion of convertible stock or debt, and the exercise of any similar right to acquire such Common Stock (the “ Outstanding Company Common Stock ”); or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote in the election of directors (the “ Outstanding Company Voting Securities ”); but excluding any acquisition by the Company or any of its Affiliates, or by Ronald O. Perelman or, his Permitted Transferees or any of their respective Affiliates or by any employee benefit plan sponsored or maintained by the Company or any of its Affiliates;

 

(ii)                a change in the composition of the Board such that members of the Board during any consecutive 12-month period (the “ Incumbent Directors ”) cease to constitute a majority of the Board. Any person becoming a director through election or nomination for election approved by a valid vote of at least two-thirds of the Incumbent Directors shall be deemed an Incumbent Director; provided , however , that no individual becoming a director as a result of an actual or threatened election contest, as such terms are used in Rule 14a-12 of Regulation 14A promulgated under the Exchange Act, or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director;

 

(iii)              the approval by the shareholders of the Company of a plan of complete dissolution or liquidation of the Company; or

 

(iv)              the consummation of a reorganization, recapitalization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company (a “ Business Combination ”), or sale, transfer or other disposition of all or substantially all of the business or assets of the Company to an entity that is not an Affiliate of the Company (a “ Sale ”), unless immediately following such Business Combination or Sale: (A) more than 50% of the total voting power of the entity resulting from such Business Combination or the entity that acquired all or substantially all of the business or assets of the Company in such Sale (in either case, the “ Surviving Company ”), or the ultimate parent entity that has Beneficial Ownership of sufficient voting power to elect a majority of the board of directors (or analogous governing body) of the Surviving Company (the “ Parent Company ”), is represented by the Outstanding Company Voting Securities that were outstanding immediately prior to such Business Combination or Sale (or, if applicable, is represented by shares into which the Outstanding Company Voting Securities were converted pursuant to such Business Combination or Sale), and such voting power among the holders thereof is in substantially the same proportion as the voting power of the Outstanding Company Voting Securities among the holders thereof immediately prior to the Business Combination or Sale, (B) no Person (other than any employee benefit plan sponsored or maintained by the Surviving Company or the Parent Company), is or becomes the beneficial owner, directly or indirectly, of 50% or more of the total voting power of the outstanding voting securities eligible to elect members of the board of directors (or the analogous governing body) of the Parent Company (or, if there is no Parent Company, the Surviving Company) and (C) at least a majority of the members of the board of directors (or the analogous governing body) of the Parent Company (or, if there is no Parent Company, the Surviving Company) following the consummation of the Business Combination or Sale were Board members at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination or Sale.

 

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Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred if immediately after the occurrence of any of the events described in clauses (i) –(iv) above, a Designated Holder or Designated Holders are the Beneficial Owners, directly or indirectly, of more than 50% of the combined voting power of the Company or any successor.

 

(g)                 Class A Common Stock ” means the Class A common stock of the Company, par value $0.01 per share (and any stock or other securities into which such common shares may be converted or into which it may be exchanged).

 

(h)                Code ” means the U.S. Internal Revenue Code of 1986, as amended, and any successor thereto. References to any section of the Code shall be deemed to include any regulations or other interpretative guidance under such section, and any amendments or successors thereto.

 

(i)                  Committee ” means the Compensation Committee of the Board or subcommittee thereof if required with respect to actions taken to obtain the exception for performance-based compensation under Section 162(m) of the Code or to comply with Rule 16b-3 promulgated under the Exchange Act in respect of Awards or, if no such Compensation Committee or subcommittee thereof exists, the Board.

 

(j)                  Common Stock ” means collectively or individually the Class A Common Stock.

 

(k)                Designated Holder ” means (i) MacAndrews and Forbes; (ii)  any Affiliate or subsidiary of MacAndrews and Forbes; (iii) Ronald O. Perelman; or (iv) the estate of, Immediate Family of or any other trust or other legal entity the primary beneficiary of which is the Immediate Family of Ronald O. Perelman.   

 

(l)                  Disability ” means cause for termination of the Participant’s employment or service due to a determination that the Participant is disabled in accordance with a long-term disability insurance program maintained by the Company or a determination by the U.S. Social Security Administration that the Participant is totally disabled.

 

(m)              Eligible Person ” means any (i) individual employed by the Company or an Affiliate; provided , however , that no such employee covered by a collective bargaining agreement shall be an Eligible Person; (ii) director or officer of the Company or an Affiliate; (iii) consultant or advisor to the Company or an Affiliate who may be offered securities registrable on Form S-8 under the Securities Act; or (iv) prospective employee, director, officer, consultant or advisor who has accepted an offer of employment or consultancy from the Company or its Affiliates (and would satisfy the provisions of clauses (i) through (iii) above once he begins employment with or providing services to the Company or its Affiliates).

 

(n)                Exchange Act ” means the U.S. Securities Exchange Act of 1934, as amended, and any successor thereto. References to any section of (or rule promulgated under) the Exchange Act shall be deemed to include any rules, regulations or other interpretative guidance under such section or rule, and any amendments or successors thereto.

 

(o)                Fair Market Value ” means, on a given date, (i) if the Common Stock is listed on a national securities exchange, the closing sales price of the Common Stock reported on such exchange on such date, or, if there is no such sale on that date, then on the last preceding date on which such a sale was reported; or (ii) if the Common Stock is not listed on any national securities exchange, the amount determined by the Committee in good faith to be the fair market value of the Common Stock.

 

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(p)                Incentive Stock Option ” means an Option which is designated by the Committee as an incentive stock option as described in Section 422 of the Code and otherwise meets the requirements set forth in the Plan.

 

(q)                Immediate Family ” means, with respect to any Person, the spouse, ex-spouse, children, step-children and their respective lineal descendants.

 

(r)                  NASDAQ ” means The Nasdaq Global Market.

 

(s)                 Nonqualified Stock Option ” means an Option which is not designated by the Committee as an Incentive Stock Option.

 

(t)                  Option ” means an Award granted under Section 7 of the Plan.

 

(u)                Performance Compensation Award ” means an Award designated by the Committee as a Performance Compensation Award pursuant to Section 11 of the Plan.

 

(v)                Performance Criteria ” shall mean the criterion or criteria that the Committee shall select for purposes of establishing the Performance Goal(s) for a Performance Period with respect to any Performance Compensation Award under the Plan.

 

(w)               Performance Formula ” shall mean, for a Performance Period, the one or more objective formulae applied against the relevant Performance Goal to determine, with regard to the Performance Compensation Award of a particular Participant, whether all, some portion but less than all, or none of the Performance Compensation Award has been earned for the Performance Period.

 

(x)                Performance Goals ” shall mean, for a Performance Period, the one or more goals established by the Committee for the Performance Period based upon the Performance Criteria.

 

(y)                Performance Period ” shall mean the one or more periods of time as the Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining the Participant’s right to, and the payment of, a Performance Compensation Award.

 

(z)                 Person ” has the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of Common Stock of the Company.

 

(aa)             Restricted Stock ” means an Award of Common Stock, subject to certain specified restrictions, granted under Section 9 of the Plan.

 

(bb)            Restricted Stock Unit ” means an Award of an unfunded and unsecured promise to deliver shares of Common Stock, cash, other securities or other property, subject to certain specified restrictions, granted under Section 9 of the Plan.

 

(cc)             Securities Act ” means the U.S. Securities Act of 1933, as amended, and any successor thereto. Reference in the Plan to any section of (or rule promulgated under) the Securities Act shall be deemed to include any rules, regulations or other interpretative guidance under such section or rule, and any amendments or successor provisions to such section, rules, regulations or guidance.

 

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(dd)            Stock Appreciation Right ” or “ SAR ” means an Award granted under Section 8 of the Plan.

 

4.     Administration.

 

(a)                 The Committee shall administer the Plan, and shall have the sole and plenary authority to: (i) designate Participants; (ii) determine the type, size, and terms and conditions of Awards to be granted; (iii) determine the method by which an Award may be settled, exercised, canceled, forfeited, or suspended; (iv) determine the circumstances under which the delivery of cash, property or other amounts payable with respect to an Award may be deferred either automatically or at the Participant’s or Committee’s election; (v) interpret and administer, reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan and any Award granted under, the Plan; (vi) establish, amend, suspend, or waive any rules and regulations and appoint such agents as the Committee shall deem appropriate for the proper administration of the Plan; (vii) accelerate the vesting, delivery or exercisability of, payment for or lapse of restrictions on, or waive any condition in respect of, Awards; and (viii) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan or to comply with any applicable law, including Section 162(m) of the Code. To the extent required to comply with the provisions of Rule 16b-3 promulgated under the Exchange Act (if applicable and if the Board is not acting as the Committee under the Plan) or necessary to obtain the exception for performance-based compensation under Section 162(m) of the Code, or any exception or exemption under the rules of NASDAQ or any other securities exchange or inter-dealer quotation service on which the Common Stock is listed or quoted, as applicable, it is intended that each member of the Committee shall, at the time he takes any action with respect to an Award under the Plan, be (i) a “non-employee director” within the meaning of Rule 16b-3 promulgated under the Exchange Act and (ii) an “outside director” within the meaning of Section 162(m) of the Code and/or (iii) an “independent director” under the rules of NASDAQ or any other securities exchange or inter-dealer quotation service on which the Common Stock is listed or quoted (“ Eligible Director ”). However, the fact that a Committee member shall fail to qualify as an Eligible Director shall not invalidate any Award granted or action taken by the Committee that is otherwise validly granted or taken under the Plan.

 

(b)                The Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person(s) selected by it, except for grants of Awards to persons (i) who are non-employee members of the Board or otherwise are subject to Section 16 of the Exchange Act or (ii) who are or may reasonably be expected to be “covered employees” for purposes of Section 162(m) of the Code. Any such allocation or delegation may be revoked by the Committee at any time.

 

(c)                 As further set forth in Section 15(f) of the Plan, the Committee shall have the authority to amend the Plan and Awards to the extent necessary to permit participation in the Plan by Eligible Persons who are located outside of the United States on terms and conditions comparable to those afforded to Eligible Persons located within the United States; provided , however , that no such action shall be taken without shareholder approval if such approval is required by applicable law or regulation.

 

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(d)                Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions regarding the Plan or any Award or any documents evidencing Awards granted pursuant to the Plan shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon all persons or entities, including, without limitation, the Company, any Affiliate, any Participant, any holder or beneficiary of any Award, and any shareholder of the Company.

 

(e)                 No member of the Board, the Committee or any employee or agent of the Company (each such person, an “ Indemnifiable Person ”) shall be liable for any action taken or omitted to be taken or any determination made with respect to the Plan or any Award hereunder (unless constituting fraud or a willful criminal act or omission). Each Indemnifiable Person shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense (including attorneys’ fees) that may be imposed upon or incurred by such Indemnifiable Person in connection with or resulting from any action, suit or proceeding to which such Indemnifiable Person may be involved as a party, witness or otherwise by reason of any action taken or omitted to be taken or determination made under the Plan or any Award agreement and against and from any and all amounts paid by such Indemnifiable Person with the Company’s approval (not to be unreasonably withheld), in settlement thereof, or paid by such Indemnifiable Person in satisfaction of any judgment in any such action, suit or proceeding against such Indemnifiable Person, and the Company shall advance to such Indemnifiable Person any such expenses promptly upon written request (which request shall include an undertaking by the Indemnifiable Person to repay the amount of such advance if it shall ultimately be determined as provided below that the Indemnifiable Person is not entitled to be indemnified); provided , that the Company shall have the right, at its own expense, to assume and defend any such action, suit or proceeding and once the Company gives notice of its intent to assume the defense, the Company shall have sole control over such defense with counsel of recognized standing of the Company’s choice. The foregoing right of indemnification shall not be available to an Indemnifiable Person to the extent that a final judgment or other final adjudication (in either case not subject to further appeal) binding upon such Indemnifiable Person determines that the acts or omissions or determinations of such Indemnifiable Person giving rise to the indemnification claim resulted from such Indemnifiable Person’s fraud or willful criminal act or omission or that such right of indemnification is otherwise prohibited by law or by the Company’s Certificate of Incorporation or By-laws. The foregoing right of indemnification shall not be exclusive of or otherwise supersede any other rights of indemnification to which such Indemnifiable Persons may be entitled under the Company’s Certificate of Incorporation or By-laws, as a matter of law, individual indemnification agreement or contract or otherwise, or any other power that the Company may have to indemnify such Indemnifiable Persons or hold them harmless.

 

(f)                 The Board may at any time and from time to time, grant Awards and administer the Plan with respect to such Awards. In any such case, the Board shall have all the authority granted to the Committee under the Plan.

 

5.       Grant of Awards; Shares Subject to the Plan; Limitations.

 

(a)                 The Committee may grant Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Other Stock-Based Awards and/or Performance Compensation Awards to one or more Eligible Persons.

 

(b)                Subject to Section 12 of the Plan and subsection (e) below, the following limitations apply to the grant of Awards: (i) no more than 3,250,000 shares of Class A Common Stock may be delivered in the aggregate pursuant to Awards granted under the Plan; (ii) no more than 1,000,000 shares of Class A Common Stock may be subject to grants of Options or SARs under the Plan to any single Participant during any single fiscal year; (iii) no more than 2,500,000 shares of Class A Common Stock may be delivered pursuant to the exercise of Incentive Stock Options granted under the Plan; (iv) no more than 500,000 shares of Class A Common Stock may be delivered in respect of Performance Compensation Awards denominated in shares of Common Stock granted pursuant to Section 11 of the Plan to any Participant for a single Performance Period (or with respect to each single fiscal year in the event a Performance Period extends beyond a single fiscal year), or in the event such Performance Compensation Award is paid in cash, other securities, other Awards or other property, no more than the Fair Market Value of 500,000 shares of Class A Common Stock on the last day of the Performance Period to which such Award relates; (v) the maximum amount that can be paid to any individual Participant for a single fiscal year during a Performance Period (or with respect to each single fiscal year in the event a Performance Period extends beyond a single fiscal year) pursuant to a Performance Compensation Award denominated in cash described in Section 11(a) of the Plan shall be $5,000,000; and (vi) the maximum amount (based on the fair value of shares of Common Stock on the date of grant as determined in accordance with applicable financial accounting rules) of Awards that may be granted in any single fiscal year to any non-employee director shall be $1,000,000, exclusive of voluntary deferrals by such director of his or her director fees and committee retainers.

 

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(c)                 Shares of Common Stock shall be deemed to have been used in settlement of Awards whether or not they are actually delivered or the Fair Market Value equivalent of such shares is paid in cash; provided , however , that if shares of Common Stock issued upon exercise, vesting or settlement of an Award, or shares of Common Stock owned by the Participant are surrendered or tendered to the Company in payment of the Exercise Price or any taxes required to be withheld in respect of an Award, in each case, in accordance with the terms and conditions of the Plan and any applicable Award agreement, such surrendered or tendered shares shall again become available for other Awards; provided , further , that in no event shall such shares increase the number of shares of Common Stock that may be delivered pursuant to Incentive Stock Options. If and to the extent all or any portion of an Award expires, terminates or is canceled or forfeited for any reason without the Participant having received any benefit therefrom, the shares covered by such Award or portion thereof shall again become available for other Awards. For purposes of the foregoing sentence, the Participant shall not be deemed to have received any “benefit” (i) in the case of forfeited Restricted Stock by reason of having enjoyed voting rights and dividend rights prior to the date of forfeiture or (ii) in the case of an Award canceled by reason of a new Award being granted in substitution therefor.

 

(d)                Shares of Common Stock delivered by the Company in settlement of Awards may be authorized and unissued shares, shares held in the treasury of the Company, shares purchased on the open market or by private purchase, or a combination of the foregoing.

 

(e)                 The Committee may grant Awards in assumption of, or in substitution for, outstanding awards previously granted by the Company or any Affiliate or an entity directly or indirectly acquired by the Company or with which the Company combines (“ Substitute Awards ”), and such Substitute Awards shall not be counted against the aggregate number of shares of Common Stock available for Awards; provided , that Substitute Awards issued or intended as “incentive stock options” within the meaning of Section 422 of the Code shall be counted against the aggregate number of Incentive Stock Options available under the Plan.

 

6.       Eligibility. Participation shall be limited to Eligible Persons who have been selected by the Committee and who have entered into an Award agreement with respect to an Award granted to them under the Plan (each such Eligible Person, a “ Participant ”).

 

7.       Options.

 

(a)                 Generally. Each Option shall be subject to the conditions set forth in the Plan and in the Award agreement. All Options granted under the Plan shall be Nonqualified Stock Options unless the Award agreement expressly states otherwise. Incentive Stock Options shall be granted only subject to and in compliance with Section 422 of the Code, and only to Eligible Persons who are employees of the Company and its Affiliates and who are eligible to receive an Incentive Stock Option under the Code. If for any reason an Option intended to be an Incentive Stock Option (or any portion thereof) shall not qualify as an Incentive Stock Option, then, to the extent of such nonqualification, such Option or portion thereof shall be regarded as a Nonqualified Stock Option appropriately granted under the Plan.

 

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(b)                Exercise Price. The exercise price (“ Exercise Price ”) per share of Common Stock for each Option shall not be less than 100% of the Fair Market Value of such share, determined as of the date of grant. Any modification to the Exercise Price of an outstanding Option shall be subject to the prohibition on repricing set forth in Section 14(b).

 

(c)                 Vesting, Exercise and Expiration. The Committee shall determine the manner and timing of vesting, exercise and expiration of Options. The period between date of grant and the scheduled expiration date of the Option (“ Option Period ”) shall not exceed ten years, unless the Option Period (other than in the case of an Incentive Stock Option) would expire at a time when trading in the shares of Common Stock is prohibited by the Company’s securities trading policy or a Company-imposed “blackout period”, in which case the Option Period shall be automatically extended until the 30th day following the expiration of such prohibition (so long as such extension shall not violate Section 409A of the Code). The Committee may accelerate the vesting and/or exercisability of any Option, which acceleration shall not affect any other terms and conditions of such Option.

 

(d)                Method of Exercise and Form of Payment. No shares of Common Stock shall be delivered pursuant to any exercise of an Option until the Participant has made payment in full to the Company of the Exercise Price and an amount equal to any U.S. federal, state and local income and employment taxes and non-U.S. income and employment taxes, social contributions and any other tax-related items required to be withheld. Options may be exercised by delivery of written or electronic notice of exercise to the Company or its designee (including a third party administrator) in accordance with the terms of the Option accompanied by payment of the Exercise Price. The Exercise Price and all applicable required withholding taxes shall be payable (i) in cash, check, cash equivalent and/or shares of Common Stock (or any combination of the foregoing) valued at the Fair Market Value at the time the Option is exercised (including, pursuant to procedures approved by the Committee, by means of attestation of ownership of a sufficient number of shares of Common Stock in lieu of actual delivery of such shares to the Company); provided , that such shares of Common Stock are not subject to any pledge or other security interest; or (ii) by such other method as the Committee may permit, including without limitation: (A) in other property having a Fair Market Value on the date of exercise equal to the Exercise Price and all applicable required withholding taxes; (B) if there is a public market for the shares of Common Stock at such time, by means of a broker-assisted “cashless exercise” pursuant to which the Company is delivered a copy of irrevocable instructions to a stockbroker to sell the shares of Common Stock otherwise deliverable upon the exercise of the Option and to deliver promptly to the Company an amount equal to the Exercise Price and all applicable required withholding taxes; or (C) by means of a “net exercise” procedure effected by withholding the minimum number of shares of Common Stock otherwise deliverable in respect of an Option that are needed to pay for the Exercise Price and all applicable required withholding taxes. Notwithstanding the foregoing, unless otherwise determined by the Committee, if on the last day of the Option Period, the Fair Market Value exceeds the Exercise Price, the Participant has not exercised the Option, and the Option has not expired, such Option shall be deemed to have been exercised by the Participant on such last day by means of a “net exercise” procedure described above. Any fractional shares of Common Stock shall be settled in cash.

 

(e)                 Notification upon Disqualifying Disposition of an Incentive Stock Option. Each Participant awarded an Incentive Stock Option under the Plan shall notify the Company in writing immediately after the date he makes a disqualifying disposition of any Common Stock acquired pursuant to the exercise of such Incentive Stock Option. A disqualifying disposition is any disposition (including, without limitation, any sale) of such Common Stock before the later of (i) two years after the date of grant of the Incentive Stock Option or (ii) one year after the date of exercise of the Incentive Stock Option. The Company may, if determined by the Committee and in accordance with procedures established by the Committee, retain possession, as agent for the applicable Participant, of any Common Stock acquired pursuant to the exercise of an Incentive Stock Option until the end of the period described in the preceding sentence, subject to complying with any instruction from such Participant as to the sale of such Common Stock.

 

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(f)                 Compliance with Laws, etc. Notwithstanding the foregoing, in no event shall the Participant be permitted to exercise an Option in a manner which the Committee determines would violate the Sarbanes-Oxley Act of 2002, or any other applicable law or the applicable rules and regulations of the Securities and Exchange Commission or the applicable rules and regulations of any securities exchange or inter-dealer quotation service on which the Common Stock of the Company is listed or quoted.

 

(g)                 Incentive Stock Option Grants to 10% Shareholders. Notwithstanding anything to the contrary in this Section 7, if an Incentive Stock Option is granted to a Participant who owns stock representing more than ten percent of the voting power of all classes of stock of the Company or of a subsidiary or a parent of the Company, the Option Period shall not exceed five years from the date of grant of such Option and the Option Price shall be at least 110% of the Fair Market Value (on the date of grant) of the shares subject to the Option.

 

(h)                $100,000 Per Year Limitation for Incentive Stock Options. To the extent the aggregate Fair Market Value (determined as of the date of grant) of shares of Common Stock for which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under all plans of the Company) exceeds $100,000, such excess Incentive Stock Options shall be treated as Nonqualified Stock Options.

 

8.       Stock Appreciation Rights (SARs).

 

(a)                 Generally. Each SAR shall be subject to the conditions set forth in the Plan and the Award agreement. Any Option granted under the Plan may include a tandem SAR. The Committee also may award SARs independent of any Option.

 

(b)                Strike Price. The strike price (“ Strike Price ”) per share of Common Stock for each SAR shall not be less than 100% of the Fair Market Value of such share (determined as of the date of grant); provided , however , that a SAR granted in tandem with (or in substitution for) an Option previously granted shall have a Strike Price equal to the Exercise Price of the corresponding Option. Any modification to the Strike Price of an outstanding SAR shall be subject to the prohibition on repricing set forth in Section 14(b).

 

(c)                 Vesting and Expiration. A SAR granted in tandem with an Option shall become exercisable and shall expire according to the same vesting schedule and expiration provisions as the corresponding Option. A SAR granted independently of an Option shall vest and become exercisable and shall expire in such manner and on such date or dates determined by the Committee and shall expire after such period, not to exceed ten years, as may be determined by the Committee (the “ SAR Period ”); provided , however , that notwithstanding any vesting or exercisability dates set by the Committee, the Committee may accelerate the vesting and/or exercisability of any SAR, which acceleration shall not affect the terms and conditions of such SAR other than with respect to vesting and/or exercisability. If the SAR Period would expire at a time when trading in the shares of Common Stock is prohibited by the Company’s securities trading policy or a Company-imposed “blackout period”, the SAR Period shall be automatically extended until the 30th day following the expiration of such prohibition (so long as such extension shall not violate Section 409A of the Code).

 

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(d)                Method of Exercise. SARs may be exercised by delivery of written or electronic notice of exercise to the Company or its designee (including a third party administrator) in accordance with the terms of the Award, specifying the number of SARs to be exercised and the date on which such SARs were awarded. Notwithstanding the foregoing, if on the last day of the Option Period (or in the case of a SAR independent of an Option, the SAR Period), the Fair Market Value exceeds the Strike Price, the Participant has not exercised the SAR or the corresponding Option (if applicable), and neither the SAR nor the corresponding Option (if applicable) has expired, such SAR shall be deemed to have been exercised by the Participant on such last day and the Company shall make the appropriate payment therefor.

 

(e)                 Payment. Upon the exercise of a SAR, the Company shall pay to the holder thereof an amount equal to the number of shares subject to the SAR that are being exercised multiplied by the excess, if any, of the Fair Market Value of one share of Common Stock on the exercise date over the Strike Price, less an amount equal to any U.S. federal, state and local income and employment taxes and non-U.S. income and employment taxes, social contributions and any other tax-related items required to be withheld. The Company shall pay such amount in cash, in shares of Common Stock valued at Fair Market Value, or any combination thereof, as determined by the Committee. Any fractional shares of Common Stock shall be settled in cash.

 

9.       Restricted Stock and Restricted Stock Units.

 

(a)                 Generally. Each Restricted Stock and Restricted Stock Unit grant shall be subject to the conditions set forth in the Plan and the Award agreement. The Committee shall establish restrictions applicable to such Restricted Stock and Restricted Stock Units, including the period over which the restrictions shall apply (the “ Restricted Period ”), and the time or times at which Restricted Stock or Restricted Stock Units shall become vested. The Committee may accelerate the vesting and/or the lapse of any or all of the restrictions on the Restricted Stock and Restricted Stock Units, which acceleration shall not affect any other terms and conditions of such Awards. No shares shall be issued at the time an Award of Restricted Stock Units is made, and the Company will not be required to set aside a fund for the payment of any such Award.

 

(b)                Stock Certificates; Escrow or Similar Arrangement. Upon the grant of Restricted Stock, the Committee shall cause share(s) of Common Stock to be registered in the name of the Participant and held in book-entry form subject to the Company’s directions. The Committee also may cause a stock certificate registered in the name of the Participant to be issued. In such event, the Committee may provide that such certificates shall be held by the Company or in escrow rather than delivered to the Participant pending vesting and release of restrictions, in which case the Committee may require the Participant to execute and deliver to the Company (i) an escrow agreement satisfactory to the Committee, if applicable, and (ii) the appropriate stock power (endorsed in blank) with respect to the Restricted Stock. If the Participant shall fail to execute and deliver the escrow agreement and blank stock power within the amount of time specified by the Committee, the Award shall be null and void. Subject to the restrictions set forth in this Section 9 and the Award agreement, the Participant shall have the rights and privileges of a shareholder as to such Restricted Stock, including without limitation the right to vote such Restricted Stock.

 

(c)                 Restrictions; Forfeiture. Restricted Stock and Restricted Stock Units awarded to the Participant shall be subject to forfeiture until the expiration of the Restricted Period and the attainment of any other vesting criteria established by the Committee, and shall be subject to the restrictions on transferability set forth in the Award agreement. In the event of any forfeiture, all rights of the Participant to such Restricted Stock (or as a shareholder with respect thereto), and/or to such Restricted Stock Units, as applicable, including to any dividends and/or dividend equivalents that may have been accumulated and withheld during the Restricted Period in respect thereof, shall terminate without further action or obligation on the part of the Company. The Committee shall have the authority to remove any or all of the restrictions on the Restricted Stock and Restricted Stock Units whenever it may determine that, by reason of changes in applicable laws or other changes in circumstances arising after the date of grant of the Restricted Stock Award or Restricted Stock Unit Award, such action is appropriate.

 

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(d)                Delivery of Restricted Stock and Settlement of Restricted Stock Units.

 

(i)      Upon the expiration of the Restricted Period with respect to any shares of Restricted Stock and the attainment of any other vesting criteria, the restrictions set forth in the applicable Award agreement shall be of no further force or effect, except as set forth in the Award agreement. If an escrow arrangement is used, upon such expiration the Company shall deliver to the Participant or his beneficiary (via book entry notation or, if applicable, in stock certificate form) the shares of Restricted Stock with respect to which the Restricted Period has expired (rounded down to the nearest full share). Dividends, if any, that may have been withheld by the Committee and attributable to the Restricted Stock shall be distributed to the Participant in cash or in shares of Common Stock having a Fair Market Value (on the date of distribution) equal to the amount of such dividends, upon the release of restrictions on such share.

 

(ii)                Unless otherwise provided by the Committee in an Award agreement, upon the expiration of the Restricted Period and the attainment of any other vesting criteria established by the Committee, with respect to any outstanding Restricted Stock Units, the Company shall deliver to the Participant, or his beneficiary (via book entry notation or, if applicable, in stock certificate form), one share of Common Stock (or other securities or other property, as applicable) for each such outstanding Restricted Stock Unit which has not then been forfeited and with respect to which the Restricted Period has expired and any other such vesting criteria are attained (“ Released Unit ”); provided , however , that the Committee may elect to (A) pay cash or part cash and part Common Stock in lieu of delivering only shares of Common Stock in respect of such Released Units or (B) defer the delivery of Common Stock (or cash or part Common Stock and part cash, as the case may be) beyond the expiration of the Restricted Period if such extension would not cause adverse tax consequences under Section 409A of the Code. If a cash payment is made in lieu of delivering shares of Common Stock, the amount of such payment shall be equal to the Fair Market Value of the Common Stock as of the date on which the Restricted Period lapsed with respect to such Restricted Stock Units. To the extent provided in an Award agreement, the holder of outstanding Restricted Stock Units shall be entitled to be credited with dividend equivalent payments (upon the payment by the Company of dividends on shares of Common Stock) either in cash or, if determined by the Committee, in shares of Common Stock having a Fair Market Value equal to the amount of such dividends (and interest may, if determined by the Committee, be credited on the amount of cash dividend equivalents at a rate and subject to such terms as determined by the Committee), which accumulated dividend equivalents (and interest thereon, if applicable) shall be payable at the same time as the underlying Restricted Stock Units are settled following the release of restrictions on such Restricted Stock Units, and, if such Restricted Stock Units are forfeited, the holder thereof shall have no right to such dividend equivalent payments.

 

(e)                 Legends on Restricted Stock . Each certificate representing Restricted Stock awarded under the Plan, if any, shall bear a legend substantially in the form of the following in addition to any other information the Company deems appropriate until the lapse of all restrictions with respect to such Common Stock:

 

TRANSFER OF THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY IS RESTRICTED PURSUANT TO THE TERMS OF THE VTV THERAPEUTICS INC. 2015 OMNIBUS EQUITY INCENTIVE PLAN AND A RESTRICTED STOCK AWARD AGREEMENT, DATED AS OF __________, BETWEEN VTV THERAPEUTICS INC. AND _________. A COPY OF SUCH PLAN AND AWARD AGREEMENT IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF VTV THERAPEUTICS, INC.

 

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10.       Other Stock-Based Awards. The Committee may issue unrestricted Common Stock, rights to receive future grants of Awards, or other Awards denominated in Common Stock (including performance shares or performance units), or Awards that provide for cash payments based in whole or in part on the value or future value of shares of Common Stock under the Plan to Eligible Persons, alone or in tandem with other Awards, in such amounts as the Committee shall from time to time determine (“ Other Stock-Based Awards ”). Each Other Stock-Based Award shall be evidenced by an Award agreement which may include conditions including without limitation the payment by the Participant of the Fair Market Value of such shares of Common Stock on the date of grant.

 

11.       Performance Compensation Awards.

 

(a)                 Generally. The Committee shall have the authority, at or before the time of grant of any Award described in Sections 7 through 10 of the Plan, to designate such Award as a Performance Compensation Award intended to qualify as “performance-based compensation” under Section 162(m) of the Code. In addition, the Committee shall have the authority to make an award of a cash bonus to any Participant and designate such Award as a Performance Compensation Award intended to qualify as “performance based compensation” under Section 162(m). Notwithstanding the foregoing, (i) any Award to a Participant who is a “covered employee” within the meaning of Section 162(m) for a fiscal year that satisfies the requirements of this Section 11 may be treated as a Performance Compensation Award in the absence of any such Committee designation and (ii) if the Company determines that a Participant who has been granted an Award designated as a Performance Compensation Award is not (or is no longer) a “covered employee” within the meaning of Section 162(m), the terms and conditions of such Award may be modified without regard to any restrictions or limitations set forth in this Section 11 (but subject otherwise to the provisions of Section 14 of the Plan).

 

(b)                Discretion of Committee with Respect to Performance Compensation Awards. The Committee may select the length of a Performance Period, the type(s) of Performance Compensation Awards to be issued, the Performance Criteria used to establish the Performance Goal(s), the kind(s) and/or level(s) of the Performance Goals(s) and the Performance Formula. Within the first 90 days of a Performance Period (or the maximum period allowed under Section 162(m) of the Code), the Committee shall, with regard to the Performance Compensation Awards to be issued for such Performance Period, exercise its discretion with respect to each of the matters enumerated in the immediately preceding sentence and record the same in writing (which may be in the form of minutes of a meeting of the Committee).

 

(c)                 Performance Criteria. The Performance Criteria that will be used to establish the Performance Goal(s) may be based on the attainment of specific levels of performance of the Company (and/or one or more Affiliates, divisions or operational and/or business units, product lines, brands, business segments, administrative departments, units, or any combination of the foregoing) and shall be limited to the following: (i) net earnings or net income (before or after taxes); (ii) basic or diluted earnings per share (before or after taxes); (iii) net revenue or net revenue growth; (iv) gross revenue or gross revenue growth, gross profit or gross profit growth; (v) net operating profit (before or after taxes); (vi) return measures (including, but not limited to, return on investment, assets, capital, gross revenue or gross revenue growth, invested capital, equity or sales); (vii) cash flow measures (including, but not limited to, operating cash flow, free cash flow and cash flow return on capital), which may but are not required to be measured on a per-share basis; (viii) earnings before or after taxes, interest, depreciation, and amortization (including EBIT and EBITDA); (ix) gross or net operating margins; (x) productivity ratios; (xi) share price (including, but not limited to, growth measures and total shareholder return); (xii) expense targets or cost reduction goals, general and administrative expense savings; (xiii) operating efficiency; (xiv) objective measures of customer satisfaction; (xv) working capital targets; (xvi) measures of economic value added or other ‘‘value creation’’ metrics; (xvii) enterprise value; (xviii) stockholder return; (xix) customer retention; (xx) competitive market metrics; (xxi) employee retention; (xxii) objective measures of personal targets, goals or completion of projects (including but not limited to succession and hiring projects, completion of specific acquisitions, reorganizations or other corporate transactions or capital-raising transactions, expansions of specific business operations and meeting divisional or project budgets); (xxiii) system-wide revenues; (xxiv) cost of capital, debt leverage, year-end cash position or book value; (xxv) strategic objectives, development of new product lines and related revenue, sales and margin targets, or international operations; (xxvi) meeting milestones with respect to drug candidates or (xxvii) any combination of the foregoing. Any one or more of the Performance Criteria may be stated as a percentage of another Performance Criteria, or a percentage of a prior period’s Performance Criteria, or used on an absolute, relative or adjusted basis to measure the performance of the Company and/or one or more Affiliates as a whole or any divisions or operational and/or business units, product lines, brands, business segments, administrative departments of the Company and/or one or more Affiliates or any combination thereof, as the Committee may deem appropriate, or any of the above Performance Criteria may be compared to the performance of a group of comparator companies, or a published or special index that the Committee deems appropriate, or as compared to various stock market indices. The Committee also has the authority to provide for accelerated vesting, delivery and exercisability of any Award based on the achievement of Performance Goals pursuant to the Performance Criteria specified in this paragraph. To the extent required under Section 162(m) of the Code, the Committee shall, within the first 90 days of a Performance Period (or within the maximum period allowed under Section 162(m) of the Code), define in an objective fashion the manner of calculating the Performance Criteria it selects to use for such Performance Period.

 

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(d)                Modification of Performance Goal(s). The Committee may alter Performance Criteria without obtaining shareholder approval if applicable tax and/or securities laws so permit. The Committee may modify the calculation of a Performance Goal during the first 90 days of a Performance Period (or within the maximum period allowed under Section 162(m) of the Code), or at any time thereafter if the change would not cause any Performance Compensation Award to fail to qualify as “performance-based compensation” under Section 162(m), to reflect any of the following events: (i) asset write-downs; (ii) litigation or claim judgments or settlements; (iii) the effect of changes in tax laws, accounting principles, or other laws or regulatory rules affecting reported results; (iv) any reorganization and restructuring programs; (v) extraordinary nonrecurring items as described in Accounting Standards Codification Topic 225-20 (or any successor pronouncement thereto) and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to shareholders for the applicable year; (vi) acquisitions or divestitures; (vii) any other specific unusual or nonrecurring events, or objectively determinable category thereof; (viii) foreign exchange gains and losses; (ix) discontinued operations and nonrecurring charges; and (x) a change in the Company’s fiscal year.

 

(e)                 Payment of Performance Compensation Awards.

 

(i)                Condition to Receipt of Payment . Unless otherwise provided in the applicable Award agreement or any employment, consulting, change-in-control, severance or other agreement between the Participant and the Company or an Affiliate, the Participant must be employed by or rendering services for the Company or an Affiliate on the last day of a Performance Period to be eligible for payment in respect of a Performance Compensation Award for such Performance Period.

 

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(ii)                Limitation . Unless otherwise provided in the applicable Award agreement, or any employment, consulting, change-in-control, severance or other agreement between the Participant and the Company or an Affiliate, the Participant shall be eligible to receive payment or delivery, as applicable, in respect of a Performance Compensation Award only to the extent the Committee determines that: (A) the Performance Goals for such period are achieved, as determined by the Committee; and (B) all or some of the portion of such Participant’s Performance Compensation Award has been earned for the Performance Period based on the application of the Performance Formula to such achieved Performance Goals, as determined by the Committee; provided , however , that if so provided by the Committee in its sole discretion, in the event of (x) the termination of the Participant’s employment or service by the Company other than for Cause (and other than due to death or Disability), in each case within 12 months following a Change in Control, or (y) the termination of a Participant’s employment or service due to the Participant’s death or Disability, the Participant shall receive payment in respect of a Performance Compensation Award based on (1) actual performance through the date of termination as determined by the Committee, or (2) if the Committee determines that measurement of actual performance cannot be reasonably assessed, the assumed achievement of target performance as determined by the Committee (but not to the extent that application of this clause (2) would cause Section 162(m) of the Code to result in the loss of the deduction of the compensation payable in respect of such Performance Compensation Award for any Participant reasonably expected to be a “covered employee” within the meaning of Section 162(m) of the Code), in each case prorated based on the time elapsed from the date of grant to the date of termination of employment or service.

 

(iii)              Certification . Following the completion of a Performance Period, the Committee shall review and certify in writing (which may be in the form of minutes of a meeting of the Committee) whether, and to what extent, the Performance Goals for the Performance Period have been achieved and, if so, calculate and certify in writing (which may be in the form of minutes of a meeting of the Committee) that amount of the Performance Compensation Awards earned for the period based upon the Performance Formula. The Committee shall then determine the amount of each Participant’s Performance Compensation Award actually payable for the Performance Period and, in so doing, may apply discretion to eliminate or reduce the size of a Performance Compensation Award consistent with Section 162(m) of the Code. Unless otherwise provided in the applicable Award agreement, the Committee shall not have the discretion to (A) provide payment or delivery in respect of Performance Compensation Awards for a Performance Period if the Performance Goals for such Performance Period have not been attained; or (B) increase a Performance Compensation Award above the applicable limitations set forth in Section 5 of the Plan.

 

(f)                 Timing of Award Payments. Unless otherwise provided in the applicable Award agreement, Performance Compensation Awards granted for a Performance Period shall be paid to Participants as soon as administratively practicable following completion of the certifications required by this Section 11. Any Performance Compensation Award that has been deferred shall not (between the date as of which the Award is deferred and the payment date) increase (i) with respect to a Performance Compensation Award that is payable in cash, by a measuring factor for each fiscal year greater than a reasonable rate of interest set by the Committee or (ii) with respect to a Performance Compensation Award that is payable in shares of Common Stock, by an amount greater than the appreciation of a share of Common Stock from the date such Award is deferred to the payment date. Unless otherwise provided in an Award agreement, any Performance Compensation Award that is deferred and is otherwise payable in shares of Common Stock shall be credited (during the period between the date as of which the Award is deferred and the payment date) with dividend equivalents (in a manner consistent with the methodology set forth in the last sentence of Section 9(d)(ii)).

 

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12.       Changes in Capital Structure and Similar Events. In the event of (a) any dividend (other than regular cash dividends) or other distribution (whether in the form of cash, shares of Common Stock, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, split-off, spin-off, combination, repurchase or exchange of shares of Common Stock or other securities of the Company, issuance of warrants or other rights to acquire shares of Common Stock or other securities of the Company, or other similar corporate transaction or event (including, without limitation, a Change in Control) that affects the shares of Common Stock, or (b) unusual or nonrecurring events (including, without limitation, a Change in Control) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange or inter-dealer quotation service, accounting principles or law, such that in any case an adjustment is determined by the Committee to be necessary or appropriate, then the Committee shall make any such adjustments in such manner as it may deem equitable, including without limitation any or all of the following: (i) adjusting any or all of (A) the number of shares of Common Stock or other securities of the Company (or number and kind of other securities or other property) which may be delivered in respect of Awards or with respect to which Awards may be granted under the Plan (including, without limitation, adjusting any or all of the limitations under Section 5 of the Plan) and (B) the terms of any outstanding Award, including, without limitation, (1) the number of shares of Common Stock or other securities of the Company (or number and kind of other securities or other property) subject to outstanding Awards or to which outstanding Awards relate, (2) the Exercise Price or Strike Price with respect to any Award or (3) any applicable performance measures (including, without limitation, Performance Criteria, Performance Formula and Performance Goals); (ii) providing for a substitution or assumption of Awards (or awards of an acquiring company), accelerating the delivery, vesting and/or exercisability of, lapse of restrictions and/or other conditions on, or termination of, Awards or providing for a period of time (which shall not be required to be more than ten (10) days) for Participants to exercise outstanding Awards prior to the occurrence of such event (and any such Award not so exercised shall terminate upon the occurrence of such event); and (iii) cancelling any one or more outstanding Awards (or awards of an acquiring company) and causing to be paid to the holders thereof, in cash, shares of Common Stock, other securities or other property, or any combination thereof, the value of such Awards, if any, as determined by the Committee (which, if applicable, may be based upon the price per share of Common Stock received or to be received by other shareholders of the Company in such event), including without limitation, in the case of an outstanding Option or SAR, a cash payment in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Committee) of the shares of Common Stock subject to such Option or SAR over the aggregate Exercise Price or Strike Price of such Option or SAR, respectively (it being understood that, in such event, any Option or SAR having a per share Exercise Price or Strike Price equal to, or in excess of, the Fair Market Value of a share of Common Stock subject thereto may be canceled and terminated without any payment or consideration therefor); provided , however , that the Committee shall make an equitable or proportionate adjustment to outstanding Awards to reflect any “equity restructuring” (within the meaning of the Financial Accounting Standards Codification Topic 718 (or any successor pronouncement thereto)). Except as otherwise determined by the Committee, any adjustment in Incentive Stock Options under this Section 12 (other than any cancellation of Incentive Stock Options) shall be made only to the extent not constituting a “modification” within the meaning of Section 424(h)(3) of the Code, and any adjustments under this Section 12 shall be made in a manner which does not adversely affect the exemption provided pursuant to Rule 16b-3 promulgated under the Exchange Act. The Company shall give each Participant notice of an adjustment hereunder and, upon notice, such adjustment shall be conclusive and binding for all purposes.

 

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13.       Effect of Change in Control. Except to the extent otherwise provided in an Award agreement, or any applicable employment, consulting, change-in-control, severance or other agreement between the Participant and the Company or an Affiliate, in the event of a Change in Control, notwithstanding any provision of the Plan to the contrary:

 

(a)                 In the event the Participant’s employment with the Company or an Affiliate is terminated by the Company or Affiliate without Cause (and other than due to death or Disability) on or within 12 months following a Change in Control, the Committee may provide that all Options and SARs held by such Participant shall become immediately exercisable with respect to 100% of the shares subject to such Options and SARs, and that the Restricted Period (and any other conditions) shall expire immediately with respect to 100% of the shares of Restricted Stock and Restricted Stock Units and any other Awards held by such Participant (including a waiver of any applicable Performance Goals); provided , that in the event the vesting or exercisability of any Award would otherwise be subject to the achievement of performance conditions, the portion of such Award that shall become fully vested and immediately exercisable shall be based on the assumed achievement of target performance as determined by the Committee and prorated for the number of days elapsed from the grant date of such Award through the date of termination.

 

(b)                In addition, the Committee may upon at least ten (10) days’ advance notice to the affected persons, cancel any outstanding Award and pay to the holders thereof, in cash, securities or other property (including of the acquiring or successor company), or any combination thereof, the value of such Awards based upon the price per share of Common Stock received or to be received by other shareholders of the Company in the event. Notwithstanding the above, the Committee shall exercise such discretion over the timing of settlement of any Award subject to Code Section 409A at the time such Award is granted.

 

(c)                 To the extent practicable, the provisions of this Section 13 shall occur in a manner and at a time which allows affected Participants the ability to participate in the Change in Control transaction with respect to the Common Stock subject to their Awards.

 

14.       Amendments and Termination.

 

(a)                 Amendment and Termination of the Plan. The Board may amend, alter, suspend, discontinue, or terminate the Plan or any portion thereof at any time; provided , that no such amendment, alteration, suspension, discontinuation or termination shall be made without shareholder approval if such approval is necessary to comply with any tax or regulatory requirement applicable to the Plan (including, without limitation, as necessary to comply with any rules or requirements of any securities exchange or inter-dealer quotation service on which the shares of Common Stock may be listed or quoted, for changes in GAAP to new accounting standards, or to prevent the Company from being denied a tax deduction under Section 162(m) of the Code); provided , further , that any such amendment, alteration, suspension, discontinuance or termination that would materially and adversely affect the rights of any Participant or any holder or beneficiary of any Award theretofore granted shall not, to that extent, be effective without the consent of the affected Participant, holder or beneficiary, unless the Committee determines that such amendment, alteration, suspension, discontinuance or termination either is required or advisable in order for the Company, the Plan or the Award to satisfy any applicable law or regulation. Notwithstanding the foregoing, no amendment shall be made to the last proviso of Section 14(b) without shareholder approval.

 

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(b)                Amendment of Award Agreements. The Committee may, to the extent not inconsistent with the terms of any applicable Award agreement, waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, any Award theretofore granted or the associated Award agreement, prospectively or retroactively (including after the Participant’s termination of employment or service with the Company); provided , that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the rights of any Participant with respect to any Award theretofore granted shall not to that extent be effective without the consent of the affected Participant unless the Committee determines that such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination either is required or advisable in order for the Company, the Plan or the Award to satisfy any applicable law or regulation; provided , further , that except as otherwise permitted under Section 12 of the Plan, if (i) the Committee reduces the Exercise Price of any Option or the Strike Price of any SAR, (ii) the Committee cancels any outstanding Option or SAR and replaces it with a new Option or SAR (with a lower Exercise Price or Strike Price, as the case may be) or other Award or cash in a manner which would either (A) be reportable on the Company’s proxy statement or Form 10-K (if applicable) as Options which have been “repriced” (as such term is used in Item 402 of Regulation S-K promulgated under the Exchange Act), or (B) result in any “repricing” for financial statement reporting purposes (or otherwise cause the Award to fail to qualify for equity accounting treatment) or (iii) the Committee takes any other action which is considered a “repricing” for purposes of the shareholder approval rules of the applicable securities exchange or inter-dealer quotation service on which the Common Stock is listed or quoted, then, in the case of the immediately preceding clauses (i) through (iii), any such action shall not be effective without shareholder approval.

 

15.       General.

 

(a)                 Award Agreements; Other Agreements. Each Award under the Plan shall be evidenced by an Award agreement, which shall be delivered to the Participant and shall specify the terms and conditions of the Award and any rules applicable thereto. An Award agreement may be in written or electronic form and shall be signed (either in written or electronic form) by the Participant and a duly authorized representative of the Company. The terms of any Award agreement, or any employment, change-in-control, severance or other agreement in effect with the Participant, may have terms or features different from and/or additional to those set forth in the Plan, and, unless expressly provided otherwise in such Award or other agreement, shall control in the event of any conflict with the terms of the Plan.

 

(b)                Nontransferability.

 

(i)                  Each Award shall be exercisable only by the Participant during the Participant’s lifetime, or, if permissible under applicable law, by the Participant’s legal guardian or representative. No Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant other than by will or by the laws of descent and distribution and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or an Affiliate; provided , that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.

 

(ii)                Notwithstanding the foregoing, the Committee may permit Awards (other than Incentive Stock Options) to be transferred by the Participant, without consideration, subject to such rules as the Committee may adopt, to: (A) any person who is a “family member” of the Participant, as such term is used in the instructions to Form S-8 under the Securities Act or any successor form of registration statements promulgated by the Securities and Exchange Commission (collectively, the “ Immediate Family Members ”); (B) a trust solely for the benefit of the Participant and his Immediate Family Members; (C) a partnership or limited liability company whose only partners or shareholders are the Participant and his Immediate Family Members; or (D) any other transferee as may be approved either (1) by the Board or the Committee, or (2) as provided in the applicable Award agreement; (each transferee described in clauses (A), (B), (C) and (D) above is hereinafter referred to as a “ Permitted Transferee ”); provided , that the Participant gives the Committee advance written notice describing the terms and conditions of the proposed transfer and the Committee notifies the Participant in writing that such a transfer would comply with the requirements of the Plan.

 

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(iii)              The terms of any Award transferred in accordance with the immediately preceding sentence shall apply to the Permitted Transferee and any reference in the Plan, or in any applicable Award agreement, to the Participant shall be deemed to refer to the Permitted Transferee, except that (A) Permitted Transferees shall not be entitled to transfer any Award, other than by will or the laws of descent and distribution; (B) Permitted Transferees shall not be entitled to exercise any transferred Option unless there shall be in effect a registration statement on an appropriate form covering the shares of Common Stock to be acquired pursuant to the exercise of such Option if the Committee determines, consistent with any applicable Award agreement, that such a registration statement is necessary or appropriate; (C) the Committee or the Company shall not be required to provide any notice to a Permitted Transferee, whether or not such notice is or would otherwise have been required to be given to the Participant under the Plan or otherwise; and (D) the consequences of the termination of the Participant’s employment by, or services to, the Company or an Affiliate under the terms of the Plan and the applicable Award agreement shall continue to be applied with respect to the transferred Award, including, without limitation, that an Option shall be exercisable by the Permitted Transferee only to the extent, and for the periods, specified in the Plan and the applicable Award agreement.

 

(c)                 Dividends and Dividend Equivalents. The Committee may provide the Participant as part of an Award with dividends or dividend equivalents, payable in cash, shares of Common Stock, other securities, other Awards or other property, on a current or deferred basis, on such terms and conditions as may be determined by the Committee, including, without limitation, payment directly to the Participant, withholding of such amounts by the Company subject to vesting of the Award or reinvestment in additional shares of Common Stock, Restricted Stock or other Awards; provided , that no dividends or dividend equivalents shall be payable in respect of outstanding (i) Options or SARs or (ii) unearned Performance Compensation Awards or other unearned Awards subject to performance conditions (other than or in addition to the passage of time); provided , further , that dividend equivalents may be accumulated in respect of unearned Awards and paid as soon as administratively practicable, but no more than 60 days, after such Awards are earned and become payable or distributable (and the right to any such accumulated dividends or dividend equivalents shall be forfeited upon the forfeiture of the Award to which such dividends or dividend equivalents relate).

 

(d)                Tax Withholding.

 

(i)                  The Participant shall be required to pay to the Company or any Affiliate, and the Company or any Affiliate shall have the right (but not the obligation) and is hereby authorized to withhold, from any cash, shares of Common Stock, other securities or other property deliverable under any Award or from any compensation or other amounts owing to the Participant, the amount (in cash, Common Stock, other securities or other property) of any required withholding taxes in respect of an Award, its exercise, or any payment or transfer under an Award or under the Plan and to take such other action as the Committee or the Company deem necessary to satisfy all obligations for the payment of such withholding taxes.

 

(ii)                Without limiting the generality of clause (i) above, the Committee may permit the Participant to satisfy, in whole or in part, the foregoing withholding liability by (A) payment in cash; (B) the delivery of shares of Common Stock (which are not subject to any pledge or other security interest) owned by the Participant having a Fair Market Value equal to such withholding liability or (C) having the Company withhold from the number of shares of Common Stock otherwise issuable or deliverable pursuant to the exercise or settlement of the Award a number of shares with a Fair Market Value equal to such withholding liability.

 

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(e)                 No Claim to Awards; No Rights to Continued Employment. No employee of the Company or an Affiliate, or other person, shall have any claim or right to be granted an Award under the Plan or, having been selected for the grant of an Award, to be selected for a grant of any other Award. There is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards. The terms and conditions of Awards and the Committee’s determinations and interpretations with respect thereto need not be the same with respect to each Participant and may be made selectively among Participants, whether or not such Participants are similarly situated. Neither the Plan nor any action taken hereunder shall be construed as giving any Participant any right to be retained in the employ or service of the Company or an Affiliate, nor shall it be construed as giving any Participant any rights to continued service on the Board.

 

(f)                 International Participants. With respect to Participants who reside or work outside of the United States and who are not (and who are not expected to be) “covered employees” within the meaning of Section 162(m) of the Code, the Committee may amend the terms of the Plan or appendices thereto, or outstanding Awards, with respect to such Participants, in order to conform such terms with or accommodate the requirements of local laws, procedures or practices or to obtain more favorable tax or other treatment for the Participant, the Company or its Affiliates. Without limiting the generality of this subsection, the Committee is specifically authorized to adopt rules, procedures and sub-plans with provisions that limit or modify rights on death, disability, retirement or other terminations of employment, available methods of exercise or settlement of an Award, payment of income, social insurance contributions or payroll taxes, withholding procedures and handling of any stock certificates or other indicia of ownership which vary with local requirements. The Committee may also adopt rules, procedures or sub-plans applicable to particular Affiliates or locations.

 

(g)                 Beneficiary Designation. The Participant’s beneficiary shall be deemed to be his spouse (or domestic partner if such status is recognized by the Company and in such jurisdiction), or if the Participant is otherwise unmarried at the time of death, his estate, except to the extent a different beneficiary is designated in accordance with procedures that may be established by the Committee from time to time for such purpose. Notwithstanding the foregoing, in the absence of a beneficiary validly designated under such Committee-established procedures and/or applicable law who is living (or in existence) at the time of death of a Participant residing or working outside the United States, any required distribution under the Plan shall be made to the executor or administrator of the estate of the Participant, or to such other individual as may be prescribed by applicable law.

 

(h)                Termination of Employment or Service . Except as otherwise provided in an Award agreement, or any employment, consulting, change-in-control, severance or other agreement between the Participant and the Company or an Affiliate, unless determined otherwise by the Committee: (i) neither a temporary absence from employment or service due to illness, vacation or leave of absence (including, without limitation, a call to active duty for military service through a Reserve or National guard unit) nor a transfer from employment or service with the Company to employment or service with an Affiliate (or vice versa) shall be considered a termination of employment or service with the Company or an Affiliate; and (ii) if the Participant’s employment with the Company or its Affiliates terminates, but such Participant continues to provide services with the Company or its Affiliates in a non-employee capacity (including as a non-employee director) (or vice versa), such change in status shall not be considered a termination of employment or service with the Company or an Affiliate for purposes of the Plan.

 

(i)                  No Rights as a Shareholder. Except as otherwise specifically provided in the Plan or any Award agreement, no person shall be entitled to the privileges of ownership in respect of shares of Common Stock which are subject to Awards hereunder until such shares have been issued or delivered to that person.

 

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(j)                  Government and Other Regulations.

 

(i)                  Nothing in the Plan shall be deemed to authorize the Committee or Board or any members thereof to take any action contrary to applicable law or regulation, or rules of NASDAQ or any other securities exchange or inter-dealer quotation service on which the Common Stock is listed or quoted.

 

(ii)                The obligation of the Company to settle Awards in Common Stock or other consideration shall be subject to all applicable laws, rules, and regulations, and to such approvals by governmental agencies as may be required. Notwithstanding any terms or conditions of any Award to the contrary, the Company shall be under no obligation to offer to sell or to sell, and shall be prohibited from offering to sell or selling, any shares of Common Stock pursuant to an Award unless such shares have been properly registered for sale pursuant to the Securities Act with the Securities and Exchange Commission or unless the Company has received an opinion of counsel, satisfactory to the Company, that such shares may be offered or sold without such registration pursuant to and in compliance with the terms of an available exemption. The Company shall be under no obligation to register for sale under the Securities Act any of the shares of Common Stock to be offered or sold under the Plan. The Committee shall have the authority to provide that all shares of Common Stock or other securities of the Company or any Affiliate delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan, the applicable Award agreement, the U.S. federal securities laws, or the rules, regulations and other requirements of the U.S. Securities and Exchange Commission, any securities exchange or inter-dealer quotation service upon which such shares or other securities of the Company are then listed or quoted and any other applicable federal, state, local or non-U.S. laws, rules, regulations and other requirements, and, without limiting the generality of Section 9 of the Plan, the Committee may cause a legend or legends to be put on any such certificates of Common Stock or other securities of the Company or any Affiliate delivered under the Plan to make appropriate reference to such restrictions or may cause such Common Stock or other securities of the Company or any Affiliate delivered under the Plan in book-entry form to be held subject to the Company’s instructions or subject to appropriate stop-transfer orders. Notwithstanding any provision in the Plan to the contrary, the Committee reserves the right to add any additional terms or provisions to any Award granted under the Plan that it in its sole discretion deems necessary or advisable in order that such Award complies with the legal requirements of any governmental entity to whose jurisdiction the Award is subject.

 

(iii)              The Committee may cancel an Award or any portion thereof if it determines that legal or contractual restrictions and/or blockage and/or other market considerations would make the Company’s acquisition of shares of Common Stock from the public markets, the Company’s issuance of Common Stock to the Participant, the Participant’s acquisition of Common Stock from the Company and/or the Participant’s sale of Common Stock to the public markets, illegal, impracticable or inadvisable. If the Committee determines to cancel all or any portion of an Award in accordance with the foregoing, unless prevented by applicable laws, the Company shall pay to the Participant an amount equal to the excess of (A) the aggregate Fair Market Value of the shares of Common Stock subject to such Award or portion thereof canceled (determined as of the applicable exercise date, or the date that the shares would have been vested or delivered, as applicable), over (B) the aggregate Exercise Price or Strike Price (in the case of an Option or SAR, respectively) or any amount payable as a condition of delivery of shares of Common Stock (in the case of any other Award). Such amount shall be delivered to the Participant as soon as practicable following the cancellation of such Award or portion thereof.

 

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(k)                No Section 83(b) Elections Without Consent of Company. No election under Section 83(b) of the Code or under a similar provision of law may be made unless expressly permitted by the terms of the applicable Award agreement or by action of the Committee in writing prior to the making of such election. If the Participant, in connection with the acquisition of shares of Common Stock under the Plan or otherwise, is expressly permitted to make such election and the Participant makes the election, the Participant shall notify the Company of such election within ten days of filing notice of the election with the Internal Revenue Service or other governmental authority, in addition to any filing and notification required pursuant to Section 83(b) of the Code or other applicable provision.

 

(l)                  Payments to Persons Other Than Participants . If the Committee shall find that any person to whom any amount is payable under the Plan is unable to care for his affairs because of illness or accident, or is a minor, or has died, then any payment due to such person or his estate (unless a prior claim therefor has been made by a duly appointed legal representative or a beneficiary designation form has been filed with the Company) may, if the Committee so directs the Company, be paid to his spouse, child, relative, an institution maintaining or having custody of such person, or any other person deemed by the Committee to be a proper recipient on behalf of such person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Committee and the Company therefor.

 

(m)              Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board nor the submission of the Plan to the shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options otherwise than under the Plan, and such arrangements may be either applicable generally or only in specific cases.

 

(n)                No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate, on the one hand, and the Participant or other person or entity, on the other hand. No provision of the Plan or any Award shall require the Company, for the purpose of satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or otherwise to segregate any assets, nor shall the Company maintain separate bank accounts, books, records or other evidence of the existence of a segregated or separately maintained or administered fund for such purposes. Participants shall have no rights under the Plan other than as unsecured general creditors of the Company.

 

(o)                Reliance on Reports. Each member of the Committee and each member of the Board (and their respective designees) shall be fully justified in acting or failing to act, as the case may be, and shall not be liable for having so acted or failed to act in good faith, in reliance upon any report made by the independent registered public accounting firm of the Company and its Affiliates and/or any other information furnished in connection with the Plan by any agent of the Company or the Committee or the Board, other than himself.

 

(p)                Relationship to Other Benefits. No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement, profit sharing, group insurance or other benefit plan of the Company except as otherwise specifically provided in such other plan.

 

(q)                Purchase for Investment. Whether or not the Options and shares covered by the Plan have been registered under the Securities Act, each person exercising an Option under the Plan or acquiring shares under the Plan, may be required by the Company to give a representation in writing that such person is acquiring such shares for investment and not with a view to, or for sale in connection with, the distribution of any part thereof. The Company will endorse any necessary legend referring to the foregoing restriction upon the certificate or certificates representing any shares issued or transferred to the Participant upon the exercise of any Option granted under the Plan.

 

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(r)                  Governing Law. The Plan shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of laws thereof, or principles of conflicts of laws of any other jurisdiction which could cause the application of the laws of any jurisdiction other than the State of Delaware.

 

(s)                 Severability. If any provision of the Plan or any Award or Award agreement is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any person or entity or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be construed or deemed stricken as to such jurisdiction, person or entity or Award and the remainder of the Plan and any such Award shall remain in full force and effect.

 

(t)                  Obligations Binding on Successors. The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to all or substantially all of the assets and business of the Company.

 

(u)                409A of the Code.

 

(i)                  It is intended that the Plan comply with Section 409A of the Code, and all provisions of the Plan shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A of the Code. Each Participant is solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on or in respect of such Participant in connection with the Plan or any other plan maintained by the Company, including any taxes and penalties under Section 409A of the Code, and neither the Company nor any Affiliate shall have any obligation to indemnify or otherwise hold such Participant or any beneficiary harmless from any or all of such taxes or penalties. With respect to any Award that is considered “deferred compensation” subject to Section 409A of the Code, references in the Plan to “termination of employment” (and substantially similar phrases) shall mean “separation from service” within the meaning of Section 409A of the Code. For purposes of Section 409A of the Code, each of the payments that may be made in respect of any Award granted under the Plan is designated as a separate payment.

 

(ii)                Notwithstanding anything in the Plan to the contrary, if the Participant is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, no payments or deliveries in respect of any Awards that are “deferred compensation” subject to Section 409A of the Code shall be made to such Participant prior to the date that is six months after the date of such Participant’s “separation from service” within the meaning of Section 409A of the Code or, if earlier, the Participant’s date of death. All such delayed payments or deliveries will be paid or delivered (without interest) in a single lump sum on the earliest date permitted under Section 409A of the Code that is also a business day.

 

(iii)              In the event that the timing of payments in respect of any Award that would otherwise be considered “deferred compensation” subject to Section 409A of the Code would be accelerated upon the occurrence of (A) a Change in Control, no such acceleration shall be permitted unless the event giving rise to the Change in Control satisfies the definition of a change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation pursuant to Section 409A of the Code and any Treasury Regulations promulgated thereunder or (B) a Disability, no such acceleration shall be permitted unless the Disability also satisfies the definition of “Disability” pursuant to Section 409A of the Code and any Treasury Regulations promulgated thereunder.

 

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(v)                Clawback/Forfeiture. Notwithstanding anything to the contrary contained herein, an Award agreement may provide that the Committee may cancel such Award if the Participant, without the consent of the Company, has engaged in or engages in activity that is in conflict with or adverse to the interest of the Company or any Affiliate while employed by or providing services to the Company or any Affiliate, including fraud or conduct contributing to any financial restatements or irregularities, or violates a non-competition, non-solicitation, non-disparagement or non-disclosure covenant or agreement with the Company or any Affiliate, as determined by the Committee. The Committee may also provide in an Award agreement that in such event, the Participant will forfeit any compensation, gain or other value realized thereafter on the vesting, exercise or settlement of such Award, the sale or other transfer of such Award, or the sale of shares of Common Stock acquired in respect of such Award, and must promptly repay such amounts to the Company. The Committee may also provide in an Award agreement that if the Participant receives any amount in excess of what the Participant should have received under the terms of the Award for any reason (including without limitation by reason of a financial restatement, mistake in calculations or other administrative error), all as determined by the Committee, then the Participant shall be required to promptly repay any such excess amount to the Company. To the extent required by applicable law (including, without limitation, Section 304 of the Sarbanes-Oxley Act and Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act) and/or the rules and regulations of NASDAQ or any other securities exchange or inter-dealer quotation service on which the Common Stock is listed or quoted, or if so required pursuant to a written policy adopted by the Company, Awards shall be subject (including on a retroactive basis) to clawback, forfeiture or similar requirements (and such requirements shall be deemed incorporated by reference into all outstanding Award agreements).

 

(w)               No Representations or Covenants With Respect to Tax Qualification. Although the Company may endeavor to (i) qualify an Award for favorable U.S. or non-U.S. tax treatment or (ii) avoid adverse tax treatment, the Company makes no representation to that effect and expressly disavows any covenant to maintain favorable or avoid unfavorable tax treatment. The Company shall be unconstrained in its corporate activities without regard to the potential negative tax impact on holders of Awards under the Plan.

 

(x)                Code Section 162(m) Re-approval. If the Company becomes subject to the provisions of Section 162(m) of the Code, the Committee may, for purposes of exempting certain Awards granted after such time from the deduction limitations of Section 162(m) of the Code, submit the provisions of the Plan regarding Performance Compensation Awards for re-approval by the shareholders of the Company (i) prior to the first shareholder meeting at which directors are to be elected that occurs in calendar year 2019, or such earlier time as required under applicable Treasury Regulations, and (ii) thereafter not later than every five years in accordance with applicable Treasury Regulations. Nothing in this subsection, however, shall affect the validity of Awards granted after such time if such shareholder approval has not been obtained.

 

(y)                Expenses; Gender; Titles and Headings. The expenses of administering the Plan shall be borne by the Company and its Affiliates. Masculine pronouns and other words of masculine gender shall refer to both men and women. The titles and headings of the sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings shall control.

 

*           *           *

 

As adopted by the Board of Directors of the Company on July 29, 2015.

 

As approved by the shareholders of the Company on July 29, 2015.

 

 

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Exhibit 10.7

 

VTV THERAPEUTICS INC.  

2015 OMNIBUS EQUITY INCENTIVE PLAN  

NONQUALIFIED
OPTION AWARD AGREEMENT

 

THIS NONQUALIFIED OPTION AWARD AGREEMENT (the “ Agreement ”), is entered into as of [______] (the “ Date of Grant ”), by and between vTv Therapeutics Inc., a Delaware corporation (the “ Company ”), and [______] (the “ Participant ”).

 

WHEREAS, the Company has adopted the vTv Therapeutics Inc. 2015 Omnibus Equity Incentive Plan (the “ Plan ”), pursuant to which Options may be granted; and

 

WHEREAS, the Committee has determined that it is in the best interests of the Company and its stockholders to grant the Option provided for herein to the Participant subject to the terms set forth herein.

 

NOW, THEREFORE, for and in consideration of the premises and the covenants of the parties contained in this Agreement, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, for themselves, their successors and assigns, hereby agree as follows:

 

1.              Grant of Option.

 

(a)                 Grant . The Company hereby grants to the Participant an Option (the “ Option ”) to purchase [______] shares of Class A Common Stock (such shares, the “ Option Shares ”), on the terms and conditions set forth in this Agreement and as otherwise provided in the Plan. The Option is not intended to qualify as an Incentive Stock Option. The Options shall vest in accordance with Section 2. The Exercise Price shall be $[______] per Option Share.

 

(b)                Incorporation by Reference . The provisions of the Plan are incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan and any interpretations, amendments, rules and regulations promulgated by the Committee from time to time pursuant to the Plan. Any capitalized terms not otherwise defined in this Agreement shall have the definitions set forth in the Plan. The Committee shall have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its decision shall be binding and conclusive upon the Participant and his legal representative in respect of any questions arising under the Plan or this Agreement. The Participant acknowledges that he or she has received a copy of the Plan and has had an opportunity to review the Plan and agrees to be bound by all the terms and provisions of the Plan.

 

2.               Vesting. Except as may otherwise be provided herein or as otherwise provided in an employment agreement, consulting agreement or other written agreement between the Participant and the Company or any of its Affiliates, subject to the Participant’s continued employment or service with the Company or an Affiliate, the Options shall become vested and exercisable in equal installments [on each of the first [___] anniversaries of] [over [___] months after] 1 the Date of Grant (each such date, a “ Vesting Date ”) [; provided, that, if the Company does not consummate an initial public offering of Class A Common Stock within six (6) months after the Date of Grant, then no Option Shares shall vest]. Any fractional Option Shares resulting from the application of the vesting schedule shall be aggregated and the Option Shares resulting from such aggregation shall vest on the final Vesting Date.

 


1 Awards for non-employee directors are expected to vest on a monthly basis.

 

1
 

 

3.               Termination of Employment or Service.

 

(a)                 Except as otherwise provided herein or as otherwise provided in an employment agreement, consulting agreement or other written agreement between the Participant and the Company or any of its Affiliates, if the Participant’s employment or service with the Company and its Affiliates terminates for any reason [other than as set forth in Section 3(c) hereof], the unvested portion of the Option shall be cancelled immediately, and the Participant shall immediately forfeit any rights to the Option Shares subject to such unvested portion.

 

(b)                [For purpose hereof, the term “ Good Reason ” shall have the meaning ascribed to such term (or term of similar meaning and import) in any employment, consulting, or other written agreement between the Participant and the Company or an Affiliate in effect at the time of such termination or, in the absence of any such agreement or in the absence of any definition of good reason in such agreement, then Good Reason shall mean the occurrence of any of the following events without the Participant’s written consent: (i) any material diminution of base salary and target bonus opportunity, or (ii) any relocation of principal place of employment to a location more than 50 miles from the Participant’s principal place of employment as of the date hereof that increases the Participant’s one-way commute. Notwithstanding the foregoing, Good Reason shall not exist unless (x) within ten (10) days after the occurrence of the event that the Participant asserts constitutes an event described in clause (i) or (ii) above, the Participant notifies the Company’s senior human resources officer in writing of such event and the circumstances that the Participant asserts give rise to Good Reason, (y) the Company fails to cure such circumstances within thirty (30) days following such notice (the “ Cure Period ”), and (z) no later than two (2) days after the expiration of the Cure Period, the Participant resigns from employment, such resignation to be effective ten (10) days following expiration of the Cure Period; provided , that the Company, in its sole discretion, may waive all or any part of the Cure Period, and the Company may assert that, notwithstanding such resignation, the Participant did not terminate for Good Reason within the meaning of this Agreement.

 

(c)                 Notwithstanding Section 3(a), if the Participant’s employment or service with the Company and its Affiliates is terminated by the Company or its Affiliates without Cause (other than for death or disability) or by the Participant for Good Reason in each case on or within twelve months following a Change-in-Control, then any unvested Options then outstanding shall become vested upon the date of such termination.]

 

4.              Expiration.

 

(a)                 In no event shall all or any portion of the Option be exercisable after the tenth annual anniversary of the Date of Grant (such ten-year period, the “ Option Period ”); provided , that if the Option Period would expire at a time when trading in the shares of Class A Common Stock is prohibited by the Company’s securities trading policy (or Company-imposed “blackout period”), the Option Period shall be automatically extended until the 30 th day following the expiration of such prohibition (but not to the extent any such extension would otherwise violate Section 409A of the Code).

 

(b)                Except as otherwise provided in an employment agreement, consulting agreement or other written agreement between the Participant and the Company or any of its Affiliates, if, prior to the end of the Option Period, the Participant’s employment or services with the Company and all Affiliates is terminated by the Company without Cause or by the Participant for any reason, the Option shall expire on the earlier of the last day of the Option Period or the date that is 90 days after the date of such termination. In the event of a termination described in this subsection (b), the Option shall remain exercisable by the Participant until its expiration only to the extent the Option was exercisable at the time of such termination.

 

2
 

(c)                 Except as otherwise provided in an employment agreement, consulting agreement or other written agreement between the Participant and the Company or any of its Affiliates, if (x) the Participant’s employment or service is terminated prior to the end of the Option Period on account of his or her Disability, (y) the Participant dies while still in the employ of, or while providing services to, the Company or an Affiliate or (z) the Participant dies following a termination described in subsection (b) above but prior to the expiration of an Option, the Option shall expire on the earlier of the last day of the Option Period or the date that is one year after the date of death or termination on account of Disability of the Participant, as applicable. In such event, the Option shall remain exercisable by the Participant or his beneficiary, as applicable, until its expiration only to the extent the Option was exercisable by the Participant at the time of such event.

 

(d)                If the Participant ceases employment or service with the Company or any Affiliates due to a termination for Cause or a termination for any reason at a time when grounds to terminate the Participant’s employment or services for Cause exist, the Option (including any vested portion of the Option) shall expire immediately upon such termination.

 

5.               Method of Exercise and Form of Payment. No Option Shares shall be delivered pursuant to any exercise of the Option until payment in full is made to the Company of the Exercise Price and an amount equal to any U.S. federal, state, local and non-U.S. income and employment taxes required to be withheld is withheld. The Option may be exercised by delivery of written or electronic notice of exercise to the Company or its designee (including a third party administrator) in accordance with the terms hereof. The Exercise Price and all applicable required withholding taxes shall be payable (i) in cash, check, cash equivalent (including bank or certified check or wire transfer) and/or in shares of Class A Common Stock (or any combination of the foregoing) valued at the Fair Market Value at the time the Option is exercised (including, pursuant to procedures approved by the Committee, by means of attestation of ownership of a sufficient number of shares of Class A Common Stock in lieu of actual delivery of such shares to the Company); provided , that, such shares of Class A Common Stock are not subject to any pledge or other security interest; or (ii) by such other method as the Committee may permit, including without limitation: (A) in other property having a fair market value equal to the Exercise Price and all applicable required withholding taxes or (B) if there is a public market for the shares of Class A Common Stock at such time, by means of a broker-assisted “cashless exercise” pursuant to which the Company is delivered a copy of irrevocable instructions to a stockbroker to sell the shares of Class A Common Stock otherwise deliverable upon the exercise of the Option and to deliver promptly to the Company an amount equal to the Exercise Price and all applicable required withholding taxes; or (C) by means of a “net exercise” procedure effected by withholding the minimum number of shares of Class A Common Stock otherwise deliverable in respect of an Option that are needed to pay for the Exercise Price and all applicable required withholding taxes. Any fractional shares of Class A Common Stock shall be settled in cash.

 

6.               Rights as a Stockholder. The Participant shall not be deemed for any purpose to be the owner of any shares of Class A Common Stock subject to this Option unless, until and to the extent that (i) this Option shall have been exercised pursuant to its terms, (ii) the Company shall have issued and delivered to the Participant the Option Shares and (iii) the Participant’s name shall have been entered as a stockholder of record with respect to such Option Shares on the books of the Company. The Company shall cause the actions described in clauses (ii) and (iii) of the preceding sentence to occur promptly following settlement as contemplated by this Agreement, subject to compliance with applicable laws.

 

3
 

7.               Compliance with Legal Requirements.

 

(a)                 Generally . The granting and exercising of the Option, and any other obligations of the Company under this Agreement, shall be subject to all applicable U.S. federal, state and local laws, rules and regulations, all applicable non-U.S. laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required. The Participant agrees to take all steps the Committee or the Company determines are reasonably necessary to comply with all applicable provisions of U.S. federal and state securities law and non-U.S. securities law in exercising his or her rights under this Agreement.

 

(b)                Tax Withholding . Any exercise of the Option shall be subject to the Participant satisfying any applicable U.S. federal, state and local tax withholding obligations and non-U.S. tax withholding obligations. The Company shall have the right and is hereby authorized to withhold from any amounts payable to the Participant in connection with the Option or otherwise the amount of any required withholding taxes in respect of the Option, its exercise or any payment or transfer of the Option or under the Plan and to take any such other action as the Committee or the Company deem necessary to satisfy all obligations for the payment of such withholding taxes. The Committee, may in its sole discretion permit the Participant to satisfy, in whole or in part, the tax obligations by withholding shares of Class A Common Stock that would otherwise be received upon exercise of the Option with a Fair Market Value equal to such withholding liability (but no more than the minimum required statutory withholding liability). 2

 

8.               Clawback. Notwithstanding anything to the contrary contained herein, the Committee may cancel the Option award if the Participant, without the consent of the Company, has engaged in or engages in activity that is in conflict with or adverse to the interest of the Company or any Affiliate while employed by or providing services to the Company or any Affiliate, including fraud or conduct contributing to any financial restatements or irregularities, or violates a non-competition, non-solicitation, non-disparagement or non-disclosure covenant or agreement with the Company or any Affiliate, as determined by the Committee. In such event, the Participant will forfeit any compensation, gain or other value realized thereafter on the vesting or exercise of the Option, the sale or other transfer of the Option, or the sale of shares of Class A Common Stock acquired in respect of the Option, and must promptly repay such amounts to the Company. If the Participant receives any amount in excess of what the Participant should have received under the terms of the Option for any reason (including without limitation by reason of a financial restatement, mistake in calculations or other administrative error), all as determined by the Committee, then the Participant shall be required to promptly repay any such excess amount to the Company. To the extent required by applicable law and/or the rules and regulations of NASDAQ or any other securities exchange or inter-dealer quotation system on which the Class A Common Stock is listed or quoted, or if so required pursuant to a written policy adopted by the Company, the Option shall be subject (including on a retroactive basis) to clawback, forfeiture or similar requirements (and such requirements shall be deemed incorporated by reference into this Agreement).

 

9.               Restrictive Covenants. In the event that the Participant violates any restrictive covenants applicable to the Participant, in addition to any other remedy which may be available at law or in equity, the Option shall be forfeited effective as of the date on which such violation first occurs, unless otherwise determined by the Committee. The foregoing rights and remedies are in addition to any other rights and remedies that may be available to the Company and shall not prevent (and the Participant shall not assert that they shall prevent) the Company from bringing one or more actions in any applicable jurisdiction to recover damages as a result of the Participant’s breach of such restrictive covenants.

 


2 Tax Witholding provision modified, as needed, to the extent that Participant is classified as an independent contractor to the Company.

4
 

10.            Miscellaneous.

 

(a)                 Transferability . The Option may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered (a “ Transfer ”) by the Participant other than by will or by the laws of descent and distribution, pursuant to a qualified domestic relations order or as otherwise permitted under Section 15(b) of the Plan. Any attempted Transfer of the Option contrary to the provisions hereof, and the levy of any execution, attachment or similar process upon the Option, shall be null and void and without effect.

 

(b)                Waiver . Any right of the Company contained in this Agreement may be waived in writing by the Committee. No waiver of any right hereunder by any party shall operate as a waiver of any other right, or as a waiver of the same right with respect to any subsequent occasion for its exercise, or as a waiver of any right to damages. No waiver by any party of any breach of this Agreement shall be held to constitute a waiver of any other breach or a waiver of the continuation of the same breach.

 

(c)                 Section 409A . The Option is not intended to be subject to Section 409A of the Code. Notwithstanding the foregoing or any provision of the Plan or this Agreement, if any provision of the Plan or this Agreement contravenes Section 409A of the Code or could cause the Participant to incur any tax, interest or penalties under Section 409A of the Code, the Committee may, in its sole discretion and without the Participant’s consent, modify such provision to (i) comply with, or avoid being subject to, Section 409A of the Code, or to avoid the incurrence of taxes, interest and penalties under Section 409A of the Code, and/or (ii) maintain, to the maximum extent practicable, the original intent and economic benefit to the Participant of the applicable provision without materially increasing the cost to the Company or contravening the provisions of Section 409A of the Code. This Section 10(c) does not create an obligation on the part of the Company to modify the Plan or this Agreement and does not guarantee that the Option or the Option Shares will not be subject to interest and penalties under Section 409A.

 

(d)                Notices . Any notices provided for in this Agreement or the Plan shall be in writing and shall be deemed sufficiently given if either hand delivered or if sent by fax, pdf/email or overnight courier, or by postage paid first class mail. Notices sent by mail shall be deemed received three (3) business days after mailing but in no event later than the date of actual receipt. Notices shall be directed, if to the Participant, at the Participant’s address indicated by the Company’s records, or if to the Company, to the attention of the Chief Financial Officer of the Company at the Company’s principal executive office.

 

(e)                 Severability . The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law.

 

(f)                 No Rights to Employment or Service . Nothing contained in this Agreement shall be construed as giving the Participant any right to be retained, in any position, as an employee, consultant or director of the Company or its Affiliates or shall interfere with or restrict in any way the rights of the Company or its Affiliates, which are hereby expressly reserved, to remove, terminate or discharge the Participant at any time for any reason whatsoever.

 

(g)                 Fractional Shares . In lieu of issuing a fraction of a share of Class A Common Stock resulting from any exercise of the Option or an adjustment of the Option pursuant to Section 12 of the Plan or otherwise, the Company shall be entitled to pay to the Participant an amount in cash equal to the Fair Market Value of such fractional share.

 

5
 

(h)                Beneficiary . The Participant may file with the Committee a written designation of a beneficiary on such form as may be prescribed by the Committee and may, from time to time, amend or revoke such designation.

 

(i)                  Successors . The terms of this Agreement shall be binding upon and inure to the benefit of the Company and its successors and assigns, and of the Participant and the beneficiaries, executors, administrators, heirs and successors of the Participant.

 

(j)                  Entire Agreement . This Agreement and the Plan contain the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and supersede all prior communications, representations and negotiations in respect thereto. No change, modification or waiver of any provision of this Agreement shall be valid unless the same be in writing and signed by the parties hereto, except for any changes permitted without consent under Section 12 or 14 of the Plan.

 

(k)                Governing Law and Venue . This Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware, without regard to principles of conflicts of laws thereof, or principles of conflicts of laws of any other jurisdiction which could cause the application of the laws of any jurisdiction other than the State of Delaware.

 

(i)                  Dispute Resolution; Consent to Jurisdiction . All disputes between or among any Persons arising out of or in any way connected with the Plan, this Agreement or the Option shall be solely and finally settled by the Committee, acting in good faith, the determination of which shall be final. Any matters not covered by the preceding sentence shall be solely and finally settled in accordance with the Plan, and the Participant and the Company consent to the personal jurisdiction of the United States Federal and state courts sitting in Wilmington, Delaware as the exclusive jurisdiction with respect to matters arising out of or related to the enforcement of the Committee’s determinations and resolution of matters, if any, related to the Plan or this Agreement not required to be resolved by the Committee. Each such Person hereby irrevocably consents to the service of process of any of the aforementioned courts in any such suit, action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to the last known address of such Person, such service to become effective ten (10) days after such mailing.

 

(ii)                Waiver of Jury Trial . Each party hereto hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in any legal proceeding directly or indirectly arising out of or relating to this Agreement or the transactions contemplated (whether based on contract, tort or any other theory). Each party hereto (A) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (B) acknowledges that it and the other parties hereto have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this section.

 

(l)                  Headings; Gender . The headings of the Sections hereof are provided for convenience only and are not to serve as a basis for interpretation or construction, and shall not constitute a part, of this Agreement. Masculine pronouns and other words of masculine gender shall refer to both men and women as appropriate.

 

(m)              Counterparts . This Agreement may be executed in one or more counterparts (including via facsimile and electronic image scan (pdf)), each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties.

 

6
 

(n)                Electronic Signature and Delivery . This Agreement may be accepted by return signature or by electronic confirmation. By accepting this Agreement, the Participant consents to the electronic delivery of prospectuses, annual reports and other information required to be delivered by U.S. Securities and Exchange Commission rules (which consent may be revoked in writing by the Participant at any time upon three (3) business days’ notice to the Company, in which case subsequent prospectuses, annual reports and other information will be delivered in hard copy to the Participant).

 

(o)        Electronic Participation in Plan . The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

 

 

 

 

[Remainder of page intentionally blank]

 

7
 

 

 

IN WITNESS WHEREOF, this Agreement has been executed by the Company and the Participant as of the day first written above.

 

  VTV THERAPEUTICS INC.
     
  By:  
    Name:
    Title:

 

 

 

 

   
     
   
  [PARTICIPANT]
     

 

 

 

 

 

 

 

 

[Signature Page to [last name] option agreement]