EFTA01084769.pdf

AGREEMENT OF LIMITED PARTNERSHIP BIOSYS CAPITAL PARTNERS, LP A Delaware limited partnership Dated as of , 2014 THE LIMITED PARTNERSHIP INTERESTS (THE 'INTERESTS') IN BIOSYS CAPITAL PARTNERS, LP (THE "PARTNERSHIP") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY U.S. STATE OR FOREIGN SECURITIES LAWS, IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MUST BE ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE SECURITIES LAWS OF ANY US. STATE, AND ANY OTHER APPLICABLE SECURITIES LAWS; AND (II) THE TERMS AND CONDITIONS OF THIS AGREEMENT OF LIMITED PARTNERSHIP. PURCHASERS OF SUCH INTERESTS SHALL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. DAL:0105560/00001:2315087v2 DRAFT - Jeffery Epstein EFTA01084769  TABLE OF CONTENTS Article I Formation of Partnership 1 Section 1.1. Formation 1 Section 1.2. Name 1 Section 1.3. Business 1 Section 1.4. Places of Business; Registered Agent 2 Section 1.5. Term 2 Section 1.6. Filings 2 Section 1.7. Title to Partnership Property 2 Article II Definitions, References and Construction 2 Section 2.1. Defined Terms 2 Section 2.2. References and Construction 14 Article III Capitalization 15 Section 3.1. Capital Contributions of Partners 15 Section 3.2. Payment of Capital Contributions 16 Section 3.3. Non-payment of Capital Contributions 21 Section 3.4. Interest on and Return of Capital Contributions 23 Section 3.5. Admission of Additional Limited Partners 23 Section 3.6. No Other Capital Contributions 25 Article IV Allocations and Distributions 25 Section 4.1. Allocations of Net Profit and Net Loss 25 Section 4.2. Special Allocations 26 Section 4.3. Distributions 28 Section 4.4. Valuations of Partnership Assets 30 Article V Management 31 Section 5.1. Power and Authority of General Partner 31 Section 5.2. Restrictions on General Partner's Power and Authority 33 Section 5.3. Investments 34 Section 5.4. Formation of Subsequent Fund 35 Section 5.5. Other Activities 35 Section 5.6. Liability; Standard of Care 37 Section 5.7. Indemnification 38 Section 5.8. Payment of Certain Costs 42 Section 5.9. Management Fee 43 Section 5.10. Alternative Investment Vehicles 45 Section 5.11. Notice of Departure of Key Persons 46 Article VI Limited Partners 47 Section 6.1. Rights of Limited Partners 47 Section 6.2. Limitations on Limited Partners 47 Section 6.3. Liability of Limited Partners 48 Section 6.4. Other Activities of Limited Partners 49 DAL:0105560/00001:2315087v2 DRAFT - Jeffery Epstein EFTA01084770  Section 6.5. Advisory Committee 49 Article VII Accounting, Reporting and Banking Matters, Confidentiality 52 Section 7.1. Books of Account; Capital Accounts 52 Section 7.2. Reports; Other Information 53 Section 7.3. Bank Accounts 54 Section 7.4. Review of Information; Confidentiality 54 Article VIII Tax and Regulatory Matters 56 Section 8.1. Tax Status 56 Section 8.2. Tax Elections 56 Section 8.3. Tax Returns 57 Section 8.4. Tax Matters Partner 57 Section 8.5. Certain Transactions 57 Section 8.6. ERISA Matters 58 Section 8.7. Bank Holding Company Partners 59 Section 8.8. Foundation Limited Partners 61 Article IX Dissolution, Liquidation and Termination 61 Section 9.1. Dissolution 61 Section 9.2. Liquidation and Termination 62 Section 9.3. Return of Excess Distributions 63 Article X Assignments of Interests 64 Section 10.1. Assignment by Limited Partners 64 Section 10.2. Assignment by General Partner 65 Article XI Partner Withdrawal 65 Section 11.1. Withdrawal by Limited Partners 65 Section 11.2. Withdrawal by General Partner 66 Section 11.3. Removal of the General Partner 66 Article XII Amendments; Meetings of Partners; Mergers 68 Section 12.1. Amendments 68 Section 12.2. Meetings of the Partners 69 Section 12.3. Mergers and Consolidations 69 Article XIII Miscellaneous 69 Section 13.1. Notices 69 Section 13.2. Partition 70 Section 13.3. Entire Agreement 70 Section 13.4. Severability 70 Section 13.5. No Waiver 70 Section 13.6. Applicable Law 70 Section 13.7. Successors and Assigns 71 Section 13.8. Attorneys' Fees 71 Section 13.9. No Third Party Beneficiaries 71 ii DAL:0105560/00001:2315087v2 DRAFT - Jeffery Epstein EFTA01084771  Section 13.10. Representations and Warranties; Survival 71 Section 13.11. Submission to Jurisdiction and Venue; Waiver of Jury Trial 71 Section 13.12. Legal Counsel 71 Section 13.13. Approvals and Deemed Approval 72 Section 13.14. Anti-Money Laundering and Anti-Terrorism 72 Section 13.15. Limitation on Use of Names of Limited Partners 72 Section 13.16. Counterparts 73 iii DALOI05560/00001:2315087v2 DRAFT - Jeffery Epstein EFTA01084772  AGREEMENT OF LIMITED PARTNERSHIP BIOSYS CAPITAL PARTNERS, LP THIS AGREEMENT OF LIMITED PARTNERSHIP (this "Agreement") dated as of 2014, is made by and among Biosys Capital Management, LLC, a Delaware limited liability company, in its capacity as the general partner (the "General Partner"), and the additional persons that are set forth in the books and records of the Partnership as limited partners. ARTICLE I FORMATION OF PARTNERSHIP Section 1.1. Formation. Subject to the provisions of this Agreement, the parties do hereby form a limited partnership pursuant to the provisions of the Delaware Revised Uniform Limited Partnership Act (6 Del. C. Sections 17-101 et seq., such Act, as amended from time to time, or any successor statute or statutes thereto, being called the "Act"). Section 1.2. Name. The name of the Partnership shall be "Biosys Capital Partners, LP" Subject to all applicable laws, the business of the Partnership shall be conducted in the name of the Partnership unless, under the law of some jurisdiction in which the Partnership does business, such business must be conducted under another name or unless the General Partner determines that it is advisable to conduct Partnership business under another name. In those circumstances, the business of the Partnership in such jurisdiction or in connection with such determination may be conducted under such other name or names as the General Partner shall determine in its sole discretion, and the General Partner shall give prompt written notice to the Limited Partners of the use of such other name. The General Partner shall cause to be filed on behalf of the Partnership such partnership or assumed or fictitious name certificate or certificates or similar instruments as may from time to time be required by law. Section 1.3. Business. Subject to the other provisions of this Agreement, the business of the Partnership shall be to make Investments in the healthcare and life-sciences industries and related opportunities. Investments may include (but shall not be limited to) Investments in companies which research, develop, market, or otherwise deal with (a) molecular medicine, genomics, and bio-informatics technologies, (b) electronic sensor and data aggregation and analysis technologies, (c) digital health platforms, and (d) other similar or related activities. Each Investment shall require the prior approval of the Investment Committee. The Partnership will generally make its Investments with the objective of obtaining interests in private companies which are headquartered in the United States, Canada or Mexico. In connection with, and subject to, the foregoing, the Partnership shall have the power and authority to (i) make Investments in Securities and in other equity or debt instruments of any nature (including Investments in debt securities and other debt instruments in order to acquire distressed assets (through a bankruptcy process or otherwise)) and acquire other interests in properties and other assets; (ii) own, hold, exercise all rights in connection with, and otherwise sell or dispose of Investments; and (iii) carry on any activity relating to or arising from any of the above that a limited partnership organized under the Act may carry on as determined by the General Partner. The I DAL:0105560/00001:23150-87v2 DRAFT - Jeffery Epstein EFTA01084773 General Partner shall manage the Partnership in a manner intended to maximize the Partnership's return on its invested capital, whether from capital appreciation or the receipt of interest, dividends and other items of income or gain of any nature. Section 1.4. Places of Business; Registered Agent (a) The address of the principal United States office and place of business of the Partnership and its street address shall be at 1707 L Street NW, Suite 400, Washington DC, 20036. The General Partner, at any time and from time to time, may change the location of the Partnership's principal place of business and may establish such additional place or places of business of the Partnership within the continental United States as the General Partner shall determine to be necessary or desirable, and in either such event shall give prompt written notice of such changed or additional place of business to the Limited Partners. (b) The registered office of the Partnership in the State of Delaware shall be do The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, County of New Castle, Delaware 19801, and the name of the registered agent for service of process on the Partnership at such address shall be The Corporation Trust Company. The General Partner, at any time and from time to time, may change the Partnership's registered office or registered agent or both by complying with the applicable provisions of the Act, and may establish, appoint and change additional registered offices and registered agents of the Partnership in such other states as the General Partner shall determine to be necessary or advisable. Section 1.5. Term. The Partnership shall be formed and commence upon the completion of the initial filing for record of the Certificate with the Secretary of State of the State of Delaware and shall continue until terminated in accordance with Article IX. Section 1.6. Filings. Upon the request of the General Partner, the Limited Partners shall promptly execute and deliver all such certificates and other instruments conforming hereto as shall be reasonably necessary for the General Partner to accomplish all filing, recording, publishing and other acts appropriate to comply with all requirements for the formation and operation of a limited partnership under the laws of the State of Delaware and for the qualification and operation of a limited partnership in all other jurisdictions where the Partnership shall propose to conduct business. Section 1.7. Title to Partnership Property. All property owned by the Partnership, whether real or personal, tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and no Partner, individually, shall have any ownership of such property. ARTICLE II DEFINITIONS, REFERENCES AND CONSTRUCTION Section 2.1. Defined Terms. When used in this Agreement, the following terms shall have the respective meanings set forth below: "Act" shall have the meaning assigned to it in Section 1.1. 2 DAL:0105560/00001:23150S7v2 DRAFT - Jeffery Epstein EFTA01084774  "Acquisition Value" shall mean, with respect to each Investment in a Portfolio Company by the Partnership, the post-money valuation of the applicable Portfolio Company at the time of such Investment increased by an amount equal to interest thereon at a rate equal to the LIBOR Rate. "Additional Amount" shall have the meaning assigned to it in Section 3.5(a)(v). "Additional Limited Partner" shall have the meaning assigned to it in Section 3.5(a). "Adjusted Capital Account" shall mean such Partner's Capital Account, determined pursuant to Section 7.1(b) hereof as of the end of the relevant taxable year, after giving effect to the following adjustments: (a) Credit to such Capital Account any amounts which such Partner is obligated to restore pursuant to any provision of this Agreement or is deemed to be obligated to restore pursuant to the penultimate sentences of each of Treasury Regulations Sections 1.704-2(g)(1) and 1.704- 2(i)(5); and (b) Debit to such Capital Account the items described in 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) of the Treasury Regulations. The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations and shall be interpreted consistently therewith. "Admission Date" shall have the meaning assigned to it in Section 3.5(a)(ii). "Advisor" shall mean Biosys Capital Advisor, LLC, a Delaware limited liability company. The Advisor shall at all times be an Affiliate of the General Partner. "Advisory Agreement" shall mean that certain Advisory Agreement entered into by and between the Partnership and the Advisor and dated as of the date hereof, as the same may be amended or restated from time to time. "Advisory Committee" shall have the meaning assigned to it in Section 6.5(a). "Affiliate" shall mean, when used with respect to another person, a person controlling, controlled by or under common control with such other person. Immediate family members of a person controlling the General Partner shall be deemed to be "Affiliates" of such person if the investment decisions of such immediate family member are controlled by such person or a person controlling such person or such person's Affiliate. As used in this definition of "Affiliate", the term "control" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through ownership of voting securities, by contract, or otherwise. For purposes of this Agreement, the members of the Investment Committee and the Principals will be deemed to be Affiliates of the General Partner. The Limited Partners in their capacities as limited partners of the Partnership shall not be deemed to be "Affiliates" of the Partnership, and no person or entity shall be deemed an affiliate of another by reason of common control by the Partnership. As used in this Agreement, the term "person" 3 DAL:0105560/00001:23150S7v2 DRAFT - Jeffery Epstein EFTA01084775 shall include an individual, a corporation, a partnership, a limited liability company, an association or other entity, an estate, a joint stock company or a trust. "Affiliate Actions" shall have the meaning assigned to it in Section 5.7(a). "Affiliate Agreements/Transactions" shall have the meaning assigned to it in Section 6.5(i). "Affiliated Partner" shall mean the General Partner and its Affiliates and any other Limited Partner designated by the General Partner as an Affiliated Partner at the time of acceptance of such Partner's Subscription Agreement. "Agreement" shall have the meaning assigned to it in the preamble. "Alternative Investment Vehicle" shall have the meaning assigned to it in Section 5.10(a). "Annual Valuation Period" shall mean the period of ninety (90) days beginning on the applicable anniversary of the Initial Investment Date. "Assessed Fee" shall have the meaning assigned to it in Section 5.9(a). "Assignee" shall have the meaning assigned to it in Section 10.1(a). "Assumed Income Tax Rate" shall mean the highest effective marginal combined Federal, state and local income tax rate for a calendar year prescribed for an individual that is a direct or indirect owner of an interest in the General Partner (taking into account such Partner's reasonable estimation of the character of the applicable income (e.g., long-term or short-term capital gain or ordinary or exempt) and the deductibility of state taxes for Federal income tax purposes). "Available Cash" shall mean cash which is available in the accounts of the Partnership (other than Capital Contributions held or reserved for Investments or to pay Partnership Expenses), less such amounts as the General Partner determines to be necessary to meet current or reasonably foreseeable Partnership obligations or expenditures (including, but not limited to, Management Fees, Organizational Expenses and Partnership Expenses). "BHC Act" shall have the meaning assigned to it in Section 8.7(a). "BHC Affiliates" shall have the meaning assigned to it in Section 8.7(e). "BHC Partner" shall have the meaning assigned to it in Section 8.7(a). "Bridge Financings" shall mean all Securities, loans, guarantees or other instruments issued or obtained in connection with an Investment or potential Investment, including any Follow- On Investment, that are, at the time acquired by the Partnership, intended by the General Partner to provide interim or non-permanent financing or to be held on a temporary basis, whether or not the source of repurchase, repayment, sale, refinancing, retirement or other disposition of such 4 DAL:0105560/00001:23150-87v2 DRAFT - Jeffery Epstein EFTA01084776 Securities or instruments is then known or committed. Any such Securities, loans, guarantees or other instruments may be convertible into equity in the related Investment. All Bridge Financings will be (i) senior to the Investment to which such Bridge Financing relates, (ii) bear interest or carry other compensation in amounts determined to be appropriate by the General Partner, and (iii) have a final maturity of not more than one year; provided, however, that in the event that a Bridge Financing is not repaid, refinanced or otherwise disposed of before the 12-month anniversary of the date that such Bridge Financing was made, such Bridge Financing shall cease to be treated as a Bridge Financing on such 12-month anniversary and shall thereafter be deemed to be part of the Investment with respect to which such Bridge Financing was made for all purposes of this Agreement. "Business Day" shall mean a day other than a Saturday, Sunday or day on which commercial banks in the District of Columbia are authorized or required to be closed for business. "Call Notice" shall have the meaning assigned to it in Section 3.2(a). "Capital Account" shall have the meaning assigned to it in Section 7.1(b). "Capital Commitment" shall mean, when used with reference to a Partner, (a) for each Limited Partner, the total amount of capital that such Limited Partner has committed to contribute to the Partnership, as set forth in the Subscription Agreement of such Partner, which amount shall be not less than $10,000,000 unless the General Partner determines in its sole discretion to accept a lesser amount, and (b) for Biosys Capital Management, LLC, in its capacity as the General Partner and its members and/or Affiliates, their commitment to make Capital Contributions to the Partnership in an aggregate amount equal to the lesser of (i) $15,000,000, and (ii) ten percent (10%) of the aggregate Capital Commitments of the Limited Partners (excluding the Capital Commitments of any members of the General Partner and/or their Affiliates), in each case payable in the ratio, at the times, and on the conditions set forth in Article III. "Capital Contributions" shall mean, for any Partner at any time, the aggregate of the dollar amounts of any cash contributed by such Partner to the Partnership (used by the Partnership for whatever purpose) at that time. "Carried Interest" shall mean the entire amount of distributions received by the General Partner pursuant to Section 4.3(b)(ii)(B) and under Section 9.2 to the extent distributions made thereunder are equivalent to distributions made under Section 4.3(b)(ii)(B). "Cause" shall have the meaning assigned to it in Section 11.3(a). "Certificate" shall mean the certificate of limited partnership of the Partnership as filed with the Secretary of State of the State of Delaware, as such certificate of limited partnership may be amended from time to time. "Clawback Determination Date" shall mean the date of the completion of the dissolution and winding up of the Partnership and the final distribution of the Partnership's assets among the Partners. "Co-Investment Opportunity" shall have the meaning assigned to it in Section 5.3(b). 5 DAL:0105560/00001:23150S7v2 DRAFT - Jeffery Epstein EFTA01084777  "Confidential Information" shall have the meaning assigned to it in Section 7.4(a). "Current Income" shall have the meaning assigned to it in Section 4.3(a). "Defaulting Partner" shall have the meaning assigned to it in Section 3.3(a). "Disposition Proceeds" shall have the meaning assigned to it in Section 4.3(a). "ERISA" shall mean the U.S. Employee Retirement Income Security Act of 1974, as amended from time to time. "ERISA Partners" shall mean each Limited Partner that is a "benefit plan investor" within the meaning of the Plan Asset Regulations. "Excess Distributions" shall have the meaning assigned to it in Section 9.3(al. "Excess Withholding Obligation" shall have the meaning assigned to it in Section 4.3(h). "Excluded Partner" shall have the meaning assigned to it in Section 3.2(b). "Excused Partner" shall have the meaning assigned to it in Section 3.2(b). "Failing Limited Partner" has the meaning assigned to it in Section 5.10(b). "Fair Market Value" shall mean, with respect to the assets of (other than Securities, the value of which is determined pursuant to clauses (i), (ii) or (iii) of Section 4.4(a) or Section 4.4(b)) or interests in the Partnership, other than cash, the value determined by the General Partner in good faith considering all factors, information and data deemed to be pertinent (and the General Partner may, in its sole discretion, seek a valuation from an appropriate independent expert); provided that, notwithstanding the foregoing, for purposes of paragraphs (2) and (7) of Section 3.3(a) hereof the Fair Market Value of the Partnership Interest of a Defaulting Partner shall be equal to the unretumed Capital Contributions of the Defaulting Partner (i.e. the aggregate Capital Contributions made by the Defaulting Partner to the Partnership, minus the aggregate distributions received or deemed received by the Defaulting Partner pursuant to Section 4.3(b)(i)) after giving effect to any reduction in the Defaulting Partner's Capital Contributions pursuant to paragraph (I) of Section 3.3(a). "FATCA" shall have the meaning assigned to it in Section 5.10(b). "Fee Payment Date" shall have the meaning assigned to it in Section 5.9(bl. "Feeder Fund" shall mean a Limited Partner that may be formed by the General Partner to serve as a collective investment fund. "Feeder Fund Organizational Expenses" shall mean all costs and expenses incurred in connection with the formation and organization of, and sale of interests in, a Feeder Fund, as determined by the General Partner, including all placement fees and all out-of-pocket legal, accounting, printing, travel and filing fees and expenses. 6 DAL:0105560/00001:2315087v2 DRAFT - Jeffery Epstein EFTA01084778  "Final Closing Date" shall have the meaning assigned to it in Section 3.5(a). "Follow-On Investment" shall mean an Investment by the Partnership after the termination of the Investment Period in an existing Investment, the making of which is determined by the General Partner in its sole discretion to be necessary or advisable to maintain, protect or enhance the value of such existing Investment. "Foundation Limited Partner" shall mean a Limited Partner that is a tax-exempt private foundation for purposes of the Internal Revenue Code. "Freely Tradable Security" shall mean any Security that meets all of the following criteria: (a) the Partnership's or the Partners' holding of such Security can be immediately sold by the Partnership and/or the Limited Partners to the general public without the necessity of any Federal, state, local or foreign government consent, approval or filing (other than any notice filings of the type required pursuant to Rule 144(h) under the Securities Act), (b) such Security is either listed on a generally recognized U.S. or foreign securities exchange or carried on the NASDAQ system or similar system and market quotations are readily available therefor and (c) such Security is not subject to any lockup or contractual restriction on the sale or transfer thereof. "Fully Invested" shall have the meaning assigned to it in Section 5.3(a). "General Partner" shall mean Biosys Capital Management, LLC, a Delaware limited liability company, in its capacity as the general partner of the Partnership, and any person who becomes a substituted or additional general partner of the Partnership pursuant to the terms hereof. "Indemnified Person" shall mean the General Partner, each member of the Management Group, each member of the Investment Committee, each member of the Advisory Committee, and their respective Affiliates, stockholders, partners, members, officers, directors, employees or agents, and any Affiliates of any of the aforesaid. "Indemnifying Partner" shall have the meaning assigned to it in Section 5.7(g)(i). "Initial Closing Date" shall mean the first date on or as of which the General Partner determines that a sufficient amount of Capital Commitments has been received and a Partner is admitted to the Partnership. "Initial Funding Date" shall mean such date following the formation of the Partnership (as selected by the General Partner in its sole discretion) on which the Partners' initial Capital Contributions to the Partnership (or any direct payments in respect of Partnership Expenses, Management Fees and Organizational Expenses, as described in Section 3.2(a)) are due. "Initial Investment Date" shall have the meaning assigned to it in Section 3.2(e). "Initial Period" shall have the meaning assigned to it in Section 5.9(a). "Internal Revenue Code" shall mean the U.S. Internal Revenue Code of 1986, as amended from time to time, and any comparable successor statute or statutes. 7 DAL:0105560/00001:2315087v2 DRAFT - Jeffery Epstein EFTA01084779  "Investment" shall mean any investment made or acquired by the Partnership (including, for the avoidance of doubt, Follow-On Investments), which investment may take the form of (without limitation) Securities or other equity or debt instruments of any nature, and interests in properties or other assets with respect to the types of business described in Section 1.3 and other interests of any and every kind, and anything issued in liquidation of, as a dividend on or in exchange for, any of the aforesaid. For the avoidance of doubt, a Bridge Financing shall not be an Investment of the Partnership unless such Bridge Financing is not repaid, refinanced or otherwise disposed of on or before the 12-month anniversary of the date that such Bridge Financing was made, in which case such Bridge Financing shall cease to be treated as a Bridge Financing on such 12-month anniversary and shall thereafter be deemed to be part of the Investment with respect to which such Bridge Financing was made for all purposes of this Agreement. "Investment Committee" shall mean the four-member investment committee of the General Partner that is formed to evaluate and approve Investments of the Partnership, as such committee is constituted from time to time. The members of the Investment Committee shall be selected by the General Partner. The Investment Committee shall meet (i) on a regular basis in order to review market conditions and the Partnership's investment strategy and (ii) at such other times as necessary to provide consideration and approval of (or withhold approval of, if applicable) proposed Investments of the Partnership. The initial members of the Investment Committee are Boris Nikolic, Hayes Nuss, David Schwarz, and Peter Corsell. "Investment Percentage" shall mean at the time of determination, with respect to a Partner, an amount (expressed as a percentage) equal to A divided by B, where "A" is the amount of the Capital Contributions contributed by such Partner to the Partnership and where "B" is the aggregate amount of all Capital Contributions contributed by all of the Partners to the Partnership. The Investment Percentage of each Partner may be adjusted (i) upon the admission of any Additional Limited Partner or the increase in the Capital Commitment of any existing Limited Partner pursuant to Section 3.5(a) and (ii) to reflect a 33% reduction by the General Partner of a Defaulting Partner's Capital Contributions pursuant to Section 3.3(a)(1). "Investment Period" shall mean the period of time commencing as of the Initial Closing Date and ending upon the earlier of (a) the fifth anniversary of the Final Closing Date, and (b) the date of any early termination of the Investment Period pursuant to Section 3.2(j) or Section 11.3(a). If the Investment Period is suspended but not terminated pursuant to Section 3.2(j) the Investment Period will be extended automatically for each day the suspension was in effect as further described in Section 3.2(j). "Key Man Event" shall have the meaning assigned to it in Section 3.2(j). "LIBOR Rate" shall mean the 1-month LIBOR rate of interest which is equal to (a) the rate published from time to time in The Wall Street Journal, Southwest Edition (or any successor publication thereto) designated therein as the 1-month LIBOR rate, or if not so published, the rate of interest publicly announced from time to time by any money center bank as the 1-month LIBOR rate in effect at its principal office, as identified in writing by the General Partner to the Limited Partners (adjusted to reflect any changes in such rate determined hereunder), plus (b) six percentage points. 8 DAL:0105560/00001:2315087v2 DRAFT - Jeffery Epstein EFTA01084780  "LIBOR Plus Rate" shall mean a rate of interest per annum which is equal to the lesser of (a) the LIBOR Rate or (b) the maximum rate from time to time permitted by applicable law "Limited Partner" shall mean each person that executes a Subscription Agreement that is accepted by the General Partner and is set forth in the books and records of the Partnership as a limited partner, and any other person who becomes a limited partner of the Partnership pursuant to the terms hereof. "LP Voting Percentage" shall mean at the time of determination, with respect to any Limited Partner, an amount (expressed as a percentage) equal to A divided by B, where "A" is such Limited Partner's Capital Commitment to the Partnership and where "B" is the aggregate amount of the Capital Commitments of all Limited Partners to the Partnership, in each case as determined without regard to any Affiliated Partner, any Principal or any member of the Investment Committee and determined without regard to the Non-Voting Interest of any BHC Partner or any Defaulting Partner. The LP Voting Percentage of each Limited Partner shall be adjusted upon the admission of any Additional Limited Partner or the increase in the Capital Commitment of any existing Limited Partner pursuant to Section 3.5(a). "Management Fee" shall have the meaning assigned to it in Section 5.9(a). "Management Fee Base" shall have the meaning assigned to it in Section 5.9(a). "Management Group" shall mean the General Partner, the Advisor and any of their respective members, managers, officers and directors, and each of the Principals. "Material Affiliate Agreements/Transactions" shall have the meaning assigned to it in Section 6.5(il. "Minimum Gain" shall mean (a) with respect to Partnership Nonrecourse Liabilities, the amount of gain that would be realized by the Partnership if it disposed of (in a taxable transaction) all Partnership assets that are subject to Partnership Nonrecourse Liabilities in full satisfaction of Partnership Nonrecourse Liabilities, computed in accordance with applicable Treasury Regulations, or (b) with respect to each Partner Nonrecourse Debt, the amount of gain that would be realized by the Partnership if it disposed of (in a taxable transaction) the Partnership assets that are subject to such Partner Nonrecourse Debt in full satisfaction of such Partner Nonrecourse Debt, computed in accordance with applicable Treasury Regulations. "Net Profit" or "Net Loss" shall mean, with respect to any fiscal year or other fiscal period, the net income or net loss of the Partnership for such period attributable to Investments determined in accordance with Federal income tax accounting principles and Section 703(a) of the Internal Revenue Code (including any items that are separately stated for purposes of Section 702(a) of the Internal Revenue Code), with the following adjustments: (a) any income of the Partnership that is exempt from Federal income tax shall be included as income; 9 DAL:0105560/00001:2315087v2 DRAFT - Jeffery Epstein EFTA01084781  (b) any expenditures of the Partnership that are described in Section 705(a)(2)(B) of the Internal Revenue Code or treated as so described pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i) shall be treated as current expenses; (c) if Partnership assets are distributed to the Partners in kind, such distributions shall be treated as sales of such assets for cash at their respective Fair Market Values (subject, in the case of Securities, to the provisions of Section 4.4) in determining Net Profit and Net Loss; and (d) all items of income, gain, loss or deduction specially allocated pursuant to Section 4.2 shall be excluded from the determination of Net Profit or Net Loss. "Nonrecourse Deductions" shall have the meaning set forth in Treasury Regulations Sections 1.704-2(b)(1) and 1.704-2(c). "Non-Participating Partners" shall have the meaning assigned to it in Section 3.2(b). "Non-Voting Interest" shall have the meaning assigned to it in Section 8.7(a). "Nuss Service Event" shall have the meaning assigned to it in Section 3.2(j). "Organizational Expenses" shall mean all out-of-pocket fees, costs, expenses and liabilities incurred by the Partnership, the General Partner, the Advisor or any of their respective Affiliates, in each case associated with (a) the formation of the Partnership, the General Partner, any Parallel Fund and any subsidiaries of the Partnership or of any Parallel Fund, (b) the offering and sale of Partnership Interests and interests in any Parallel Fund, and (c) the negotiation, execution and delivery of this Agreement, the partnership agreement or other similar agreement in respect of any Parallel Fund, the Advisory Agreement and any related or similar documents, including, without limitation, all legal, accounting, consulting, marketing, mailing, courier, filing, travel, office set-up and supplies and other start-up costs and expenses; provided, however, that Organizational Expenses shall not include placement agent fees of any kind. "Parallel Funds" shall have the meaning assigned to it in Section 5.5(cl. "Partner Nonrecourse Debt" shall mean any nonrecourse debt of the Partnership for which any Partner bears the economic risk of loss, as determined under applicable Treasury Regulations. "Partner Nonrecourse Deductions" shall mean the amount of deductions, losses and expenses equal to the net increase during the year in Minimum Gain attributable to a Partner Nonrecourse Debt, reduced (but not below zero) by proceeds of such Partner Nonrecourse Debt distributed during the year to the Partners who bear the economic risk of loss for such debt, as determined in accordance with applicable Treasury Regulations. "Partners" shall mean, collectively, the General Partner and the Limited Partners, and "Partner" shall mean, individually, either the General Partner or any Limited Partner. "Partnership" shall mean Biosys Capital Partners, LP, a Delaware limited partnership. 10 DAL:0105560/00001:2315087v2 DRAFT - Jeffery Epstein EFTA01084782  "Partnership Counsel" shall have the meaning assigned to it in Section 13.12. "Partnership Expenses" shall mean all out-of-pocket fees, costs, expenses and liabilities incurred by the Partnership, the General Partner, the Advisor or any of their respective Affiliates, in each case relating to the management, conduct and operation of Partnership business or otherwise attributable to the activities of the Partnership, including, without limitation: (i) Organizational Expenses (up to a maximum of $500,000), (ii) the Management Fee, (iii) legal, accounting, audit, custodial, consulting and other professional fees, (iv) consulting fees relating to services rendered to the Partnership that could not reasonably have been rendered by the General Partner in the ordinary course of its activities, (v) all costs and expenses associated with the purchase (or attempted purchase), holding or sale or exchange or other disposition of Investments or other Partnership assets, including, but not by way of limitation, placement and finder's fees paid to third-parties unaffiliated with the General Partner related to the acquisition or disposition of Partnership assets, transfer, capital and other taxes, duties and fees and travel costs associated with evaluation, monitoring or disposition of portfolio securities, (vi) research expenses, (vii) fees and expenses of investment advisers and independent consultants unaffiliated with the General Partner that are incurred in investigating and evaluating investment opportunities, acquiring and disposing of Partnership assets and maintaining and monitoring the Partnership's assets, (viii) banking, brokerage, broken-deal, registration, qualification, finders, depositary and similar fees or commissions, (ix) expenses associated with meetings of the Limited Partners and the Advisory Committee, (x) insurance premiums, indemnifications, costs of litigation and other extraordinary expenses, (xi) costs of financial statements and other reports to Partners as well as costs of all governmental returns, reports and other filings, (xii) interest and other expenses relating to any indebtedness of the Partnership, (xiii) amounts paid to or for the benefit of Portfolio Companies, (xiv) advertising and public notice costs, (xv) insurance costs and expenses relating to protection against liability for loss and damage which may be occasioned by the activities to be engaged in by the Partnership, including, for the avoidance of doubt, indemnity payments and premiums for insurance protecting the Partnership and any Indemnified Person(s) from liabilities to third persons in connection with the Partnership's business and affairs and E&O or similar insurance coverage, (xvi) the fees, costs and expenses (including due diligence costs) incurred in connection with investigating, negotiating, acquiring, holding, selling or exchanging of Investments (including fees and expenses of lawyers, accountants, consultants, brokers, finders and investment bankers and other financing sources), (xvii) all Feeder Fund Organizational Expenses, and (xviii) any other expenses not listed in the preceding clauses (i) through (xvii) that are reasonably related to the activities of the Partnership. Notwithstanding the foregoing, "Partnership Expenses" shall not include (i) the ordinary administrative and overhead expenses of the General Partner, the Advisor or any of their Affiliates in connection with the management of the Partnership, including salaries, other compensation and costs of providing benefits, rent, communications, travel, and the cost of office equipment, or (ii) legal, accounting, filing and other fees and expenses incurred in connection with the General Partner's or the Advisor's registration and ongoing compliance with any applicable regulatory requirements (including the Alternative Investment Fund Managers Directive or "AIFMD" and the Investment Advisers Act of 1940), including, but not limited to, any costs and expenses relating to the implementation and maintenance of compliance policies and procedures, preparing, filing and amending any Forms ADV and Forms PF and responding to and defending any SEC audits, inquiries, investigations or claims related to such compliance matters, but excluding any costs or expenses relating to those requirements or any other applicable requirements that are imposed on the General Partner or the Advisor solely and directly as a result II DAL:0105560/00001:23150S7v2 DRAFT - Jeffery Epstein EFTA01084783 of the organization or operation of the Partnership (e.g., the cost of providing audited financial statements and other reports to the Limited Partners, maintaining the assets of the Partnership with a qualified custodian, reporting to the SEC beneficial ownership of the Partnership on Form 4 or Schedule 13G, etc.), which shall be included in Partnership Expenses hereunder. "Partnership Interest" shall mean the partnership interest owned by a Partner in the Partnership at any particular time, including the right of such Partner to any and all benefits to which such Partner may be entitled as provided in this Agreement, together with the obligations of such Partner to comply with all the terms and provisions of this Agreement. "Partnership Nonrecourse Liabilities" shall mean nonrecourse liabilities (or portions thereof) of the Partnership for which no Partner bears the economic risk of loss, as determined under applicable Treasury Regulations. "Percentage Share" shall mean, when used with reference to a Partner, an amount (expressed as a percentage) equal to A divided by B, where "A" is such Partner's Capital Commitment, and where "B" is the Total Capital Commitments. The "Percentage Share" of each Partner shall be adjusted (i) upon the admission of any Additional Limited Partner or the increase in the Capital Commitment of any existing Limited Partner pursuant to Section 3.5(a) and (ii) to reflect the decision by the General Partner to accept no further Capital Contributions from a Defaulting Partner (i.e. a reduction in such Defaulting Partner's Capital Commitment) pursuant to Section 3.3(a)(1). For the avoidance of doubt, each Partner's "Percentage Share" with respect to the Management Fee shall be calculated in the manner set forth in Section 5.9 with respect to such Partner. "Permissible Withdrawal" shall have the meaning assigned to it in Section 11.1(a). "Placement Fees" shall have the meaning assigned to it in Section 5.9(h). "Plan Asset Regulations" shall mean U.S. Department of Labor Regulation 29 C.F.R. Section 2510.3-101, et seq., as modified by Section 3(42) of ERISA. "Portfolio Company