EXHIBIT 10.1
AMENDMENT NUMBER 1 TO
LIMITED LIABILITY COMPANY AGREEMENT OF
PSMA DEVELOPMENT COMPANY LLC
This Amendment Number 1 is made this 22nd day of March, 2002 by and
between Progenics Pharmaceuticals, Inc., a Delaware corporation ("Progenics"),
CYTOGEN Corporation, a Delaware corporation ("CYTOGEN") and PSMA Development
Company LLC, a Delaware Limited Liability company (the "Company"), and amends
the Limited Liability Company Agreement, dated June 15, 1999 (the "Agreement"),
among Progenics, CYTOGEN and the Company. Unless otherwise defined herein,
capitalized terms used in this Amendment Number 1 shall have the respective
meanings ascribed to such terms in the Agreement.
WHEREAS, the parties to the Agreement desire to amend, clarify and
supplement the provisions of the Agreement;
NOW, THEREFORE, Progenics, CYTOGEN and the Company hereby agree as
follows:
1. Section 2.2(c)(i)of the Agreement is hereby amended to read as follows:
(c) (i) The Management Committee may from time to time, in
connection with preparing the Budget (as defined hereinafter) or
otherwise, call for the Members to make additional capital
contributions (the "Additional Capital Contributions"), in which event
the Management Committee shall give notice to each Member of: (A) the
total amount of the Additional Capital Contribution being called; (B)
the reason the Additional Capital Contribution is being called; (C)
each Member's proportionate share of the total Additional Capital
Contribution (determined in accordance with this Section 2.2(c); and
(D) the date the Additional Capital Contribution is due and payable,
which date shall not, without the written consent of the Members, be
less than 30 nor more than 90 calendar days after the notice has been
given. A Member's share of the total Additional Capital Contribution
shall be equal to the product obtained by multiplying the Member's
Percentage and the total Additional Capital Contribution required. A
Member's share shall be payable in cash, by certified check or wire
transfer. No Additional Capital Contribution by any Member may be made
or required to be made on an in-kind or any other non-cash basis unless
consented to in writing by each of the Members. Upon payment of the
Additional Capital Contributions, the Capital Contributions of each
Member shall be adjusted. Without the prior written consent of each
Member, which consent may be withheld, with or without reason, in the
sole and absolute discretion of each Member, the Management Committee
may not call for additional capital contributions in excess of an
amount necessary to fund a Budget previously approved by the Management
Committee, plus a reasonable reserve.
-1-
2. Section 2.4(a) of the Agreement is hereby amended to read as follows:
2.4. Budget. (a) The Management Committee shall promptly
prepare a budget for the Company's activities covering such time period
as the Management Committee shall deem appropriate. The Budget may
include provisions for Additional Capital Contributions to made by the
Members. The Management Committee shall meet to review and update the
Budget on a semi-annual basis or as it may otherwise determine to be
appropriate. Without the prior written consent of each Member, which
consent may be withheld, with or without reason, in the sole and
absolute discretion of each Member, the Management Committee shall not
adopt for any 12-month period a Budget requiring funding by the Members
in an amount in the aggregate in excess of twice the funding required
by the Members in the Budget relating to the immediately preceding
12-month period.
3. Section 4.1(g)(i)of the Agreement is hereby amended to read as follows:
(g) (i) If submission of a Deadlock to the procedures
described in Section 4.1(f) does not, within the time periods specified
in Section 4.1(f) hereof, result in resolution of the Deadlock,
submission of the Deadlock to arbitration or agreement by the Members
on an alternative dispute resolution procedure, either party may elect
to exercise the buy/sell right contained in this Section 4.1(g) (the
"Buy/Sell Right"). The Member electing to exercise the Buy/Sell Right
(the "Offeror") shall furnish in writing to the other Member (the
"Offeree") the Offeror's irrevocable, unconditional (except as provided
herein) and binding offer (such notice being referred to herein as the
"Exercise Notice"), at the Offeree's option, to purchase the Offeree's
Interest or to sell the Offeror's Interest for a cash purchase price
determined in accordance with Section 4.1(g)(ii) hereof (the "Purchase
Price"). The Exercise Notice shall set forth an amount expressed in
dollars and without contingencies (the "Valuation"), which amount shall
be used to calculate, in accordance with Section 4.1(g)(ii) hereof, the
Purchase Price. The Valuation is intended to represent the amount that
would be payable for 100% of the Interests of the Company. Within 15
calendar days after the Exercise Notice is given, the Offeree may give
notice to the Offeror of its irrevocable, unconditional (except as
provided herein) and binding election either:
(1) to purchase the entire Interest of the Offeror for an amount
in cash equal to the Purchase Price; or
(2) to sell its entire Interest to the Offeror for an amount in
cash equal to the Purchase Price.
Failure of the Offeree to give notice of its decision within such
applicable time period shall constitute a conclusive election by the
Offeree to sell its entire Interest pursuant to this Section 4.1(g)(i).
-2-
4. Section 6.1 of the Agreement is hereby amended to read as follows:
6.1 Transfer or Withdrawal Prohibited; Change of Control of a
Member. (a) Except as expressly provided herein, no Member may withdraw
from the Company or sell, assign, transfer, pledge, hypothecate,
mortgage or create a security interest, directly or indirectly,
including by a grant of rights with respect to voting, distributions or
other economic rights or management ("Transfer"), in all or any portion
of its Interest without the prior written consent of the other Member
(the "Consent-Required Member"), and such Consent Required Member may,
in the exercise of its reasoned business judgment, withhold consent in
its sole and absolute discretion. Any purported withdrawal or Transfer
of an Interest by a Member without the requisite consent in writing
shall be null and void, and the Company and the Consent-Required Member
shall be entitled to damages as a result of, and/or injunctive relief
with respect to, any attempts to withdraw or Transfer.
(b) In the event that the Consent-Required Member consents to
a Transfer of a Member's Interest, such consent shall, unless expressly
stated otherwise, be deemed a consent only to the assignment of such
Member's economic interest in profits, losses and distributions and
shall not be deemed a consent to the admission of such assignee as a
member of the Company as a substitute for the assignor, and such
assignee shall not have any of the rights of a member of the Company,
including, without limitation, voting rights, unless otherwise stated
in writing by the Consent-Required Member. Except to the extent that
the Consent-Required Member has consented to the admission of the
assignee as a member in the Company and/or consented to the exercise of
voting rights by the assignee, the assigning Member shall retain all
voting rights in connection with the transferred Interest.
(c) In the event that at any time there occurs a Change of
Control (as hereinafter defined) of a Member, such Member's Interest
shall automatically convert into an economic interest only in the
profits, losses and distributions of the Company, and such Member shall
not have any other rights of a Member of the Company, including,
without limitation, voting and marketing rights unless such Change of
Control is a Qualifying Corporate Transaction (as defined below). For
purposes hereof, a "Change in Control" shall be deemed to have
occurred: (i) on the sale or other disposition of all or substantially
all of the Member's assets to any entity, person or related group of
persons; (ii) when there shall be consummated any consolidation,
merger, reorganization or similar corporate transaction (a "Corporate
Transaction") of the Member (A) in which the Member is not the
continuing or surviving entity (other than a consolidation or merger
with a wholly owned subsidiary of the Member in which all shares of
common stock of such Member outstanding immediately prior to the
effectiveness thereof are changed into or exchanged for the same
consideration), (B) pursuant to which the common stock of such Member
would be converted into cash, securities or other property or (C) any
-3-
transaction or series of related transactions in which the holders of
the common stock of the Member immediately prior to such transaction
(or the first of such transactions, if a series) does not hold at least
a majority of the total voting power of all classes of capital stock
entitled to vote generally in the election of directors of the Member
immediately after such transaction (or the last of such transactions,
if a series), in each case, other than a Corporate Transaction that is
a Qualifying Corporate Transaction; (iii) when any person, or any
persons acting together which would constitute a "group" for purposes
of Section 13(d) of the Securities Exchange Act of 1934, as amended,
together with any affiliates thereof, shall beneficially own (as
defined in Rule 13d-3 under the Exchange Act) at least 50% of the total
voting power of all classes of capital stock of the Member entitled to
vote generally in the election of directors of the Member (unless the
"acquisition" is deemed to have occurred indirectly solely as a result
of the completion of a Corporate Transaction that is not a Change in
Control pursuant to clause (ii) above); (iv) when at any time during
any consecutive two-year period, individuals who at the beginning of
such period constituted the Board of Directors of the Member (together
with any new directors whose election by such Board of Directors or
whose nomination for election by the stockholders of the Member was
approved by a vote of 75% of the directors then still in office who
were either directors at the beginning of such period or whose election
or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Member
then in office; or (v) when the Member is liquidated or dissolved or
adopts a plan of liquidation or dissolution. A "Qualifying Corporate
Transaction" shall be any Corporate Transaction in which the holders of
common stock of the Member immediately prior to such Corporate
Transaction have, directly or indirectly, at least (i) a majority of
the total voting power of all classes of capital stock entitled to vote
generally in the election of directors of the continuing or surviving
entity immediately after such Corporate Transaction in substantially
the same proportion as their ownership of common stock before such
transaction or (ii) 25% of the total voting power of all classes of
capital stock entitled to vote generally in the election of directors
of the continuing or surviving entity immediately after such Corporate
Transaction in substantially the same proportion as their ownership of
common stock before such transaction and, in the case of this clause
(ii), the other Member has given a CIC Approval. A "CIC Approval" shall
be given by the other Member if such Member cannot conclude in good
faith and in its reasonable judgment after discussions with the parties
to the Corporate Transaction that such Corporate Transaction and any
resulting change in management or leadership is reasonably likely to
disrupt or delay the commercialization of products by the LLC, or
fundamentally alter the approach, philosophy or vision of the LLC,
giving due regard to the importance of good-faith cooperation and
collaboration and single-mindedness of purpose between CYTOGEN and
Progenics which has formed the basis for the collaboration initially
contemplated by the parties hereto. A CIC Approval may not be
unreasonably withheld, and failure of the other Member to give a CIC
Approval may be contested in arbitration pursuant to Article 10 hereof.
In the event of a Qualifying Corporate Transaction, such acquirer or
-4-
surviving entity shall have the rights of such Member, including,
without limitation, voting and marketing rights. Notwithstanding the
foregoing, a Change of Control shall not include any transaction the
purpose of which is to reorganize the Member's corporate structure,
reincorporate the Member in another jurisdiction or undertake any other
action which does not have the purpose or effect of materially
affecting the ownership and/or control of the Member at the time of
such transaction.
(d) The parties desire for the foregoing provisions of this
Section 6.1 to be interpreted as necessary to give effect to their
intent that no Interest be transferred indirectly, in one or a series
of transactions, without giving effect to the ownership consequences
described in this Agreement.
5. Section 9.2 of the Agreement is hereby amended to read as follows:
9.2 Diligence Obligations. CYTOGEN shall use diligent efforts
to market Licensed Products in the North American Territory ("Diligent
Efforts"). For purposes of the foregoing, "Diligent Efforts" shall mean
carrying out such obligation in a commercially reasonable and sustained
manner consistent with the efforts a commercial enterprise in the
pharmaceutical industry would devote to a product of similar market
potential, profit potential or strategic value resulting from its own
research efforts to which such party has exclusive rights based on
conditions then prevailing. Diligent Efforts requires: (i) developing a
strategic plan for product launch and subsequent market penetration
with defined objectives; (ii) establishing systems and protocols
reasonably designed to achieve such objectives; (iii) allocating
appropriate resources to support such systems and protocol; (iv)
promptly assigning responsibility for executing all phases of the
Marketing Plan to specific employees who are held accountable for
discharging their assigned responsibilities; and (v) monitoring on an
ongoing basis the execution of the Marketing Plan and its success and
making such changes as are warranted by market and/or operational
conditions. CYTOGEN shall provide the LLC with access to all relevant
records and personnel, during normal business hours and with reasonable
advance notice, under customary confidentiality conditions, for the
purpose of determining the utilization by CYTOGEN of Diligent Efforts
to commercialize Licensed Products.
6. Section 9.7 of the Agreement is hereby amended to read as follows:
9.7 Non-Transferability of Rights. The product marketing
rights granted by the LLC pursuant to this Agreement are personal in
nature to the party to whom they are granted and, except as otherwise
provided in Section 6.1, are not transferable or licensable in any
manner whatsoever by such party to whom they are granted hereby, nor
are such product marketing rights otherwise exercisable by any person
or entity other than the party to which such rights have been granted
hereby.
7. Section 11.3 of the Agreement is hereby amended to read as follows:
-5-
11.3 Entire Agreement; Amendment. This Agreement
contains a complete statement of the arrangements among the Members
with respect to the Company and supersedes all prior agreements and
understandings among them with respect to the Company and may not be
amended except by unanimous written agreement of the Members.
8. Section 11.12 of the Agreement is hereby amended to read as follows:
11.12 Assignability. Except as otherwise provided in
Section 6.1 hereof, neither this Agreement nor any Interest, including
the right, directly or indirectly, to receive distributions or any
other economic, voting or management rights or interests , shall be
assignable by either Member without the written consent of the other,
and any attempted assignment without such consent shall be null and
void. This Agreement shall be binding upon the successors and permitted
assigns of the Members. Any such successor or permitted assign shall be
subject to the same rights and obligations as the original Member
hereunder.
9. This Amendment Number 1 to the Agreement shall be deemed an amendment of the
Agreement for purposes of Section 11.3 the Agreement. Except as expressly
provided in this Amendment Number 1, all provisions of the Agreement remain in
full force and effect.
10. This Amendment Number 1 supercedes all prior agreements, discussions and
correspondence between Progenics, CYTOGEN and the Company concerning the subject
matter of said provisions.
IN WITNESS WHEREOF, the parties have executed this Amendment Number 1
as of the date and year first written above.
Progenics Pharmaceuticals, Inc. PSMA Development Company LLC
By: /s/ Ronald J. Prentki By: /s/ Paul J. Maddon
--------------------------- ----------------------------
Ronald J. Prentki Paul J. Maddon
President Managing Representative
CYTOGEN Corporation
By: /s/ H. Joseph Reiser By: /s/ H. Joseph Reiser
--------------------------- ---------------------------
H. Joseph Reiser H. Joseph Reiser
President and CEO Managing Representative
-6-