Member Verification
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Subscription and Lock-Up Agreement
This Subscription and Lock-Up Agreement (this “Agreement”) is made as of the date of the undersigned’s signature below (the “Effective Date”), by and between , (“Seller”), and [BUYER MEMBER ENTITY], an existing Class A Member of The Pharm, LLC (“Buyer”).
Recitals
A. Seller owns Class A Units (the “Seller Units”) of The Pharm, LLC, a Delaware limited liability company (the “Company”), acquired for an aggregate original investment of .
B. Buyer is an existing Class A Member of the Company. Pursuant to Section 7.2(a)(C) of the Company’s Third Amended and Restated Limited Liability Company Agreement, dated as of July 2020 (the “LLC Agreement”), a “Permitted Assignee” includes any other Member, and pursuant to Section 7.6(d) of the LLC Agreement, the Company’s right of first refusal does not apply to Transfers made in accordance with Section 7.2.
C. Buyer is seeking to enter into agreements substantially similar to this Agreement with other Class A Members, and Seller’s obligation to close is conditioned as set forth below.
Agreement
1. Irrevocable Offer; Subscription. Seller hereby irrevocably offers and agrees to sell to Buyer all of the Seller Units at an aggregate purchase price equal to the GREATER of (a) (fifty percent (50%) of Seller’s original investment) (the “Floor Price”), or (b) if the Company completes a rights offering or other issuance of Class A Units prior to the Closing, fifty percent (50%) of the per-unit price of such issuance multiplied by the number of Seller Units (as so determined, the “Purchase Price”). Seller’s price can adjust only upward from the Floor Price, never downward, payable in cash at the Closing (as defined below), on the terms of the Membership Interest Purchase Agreement in the form delivered to Seller through this portal (the “Purchase Agreement”). This offer is irrevocable through the Outside Date (as defined below).
2. Acceptance; Minimum Condition; Closing. Buyer may accept Seller’s offer by delivering written notice to Seller (an “Acceptance Notice”) at any time on or before the Outside Date, which notice Buyer shall deliver promptly upon Buyer having received executed subscription agreements from Class A Members of the Company (including this Agreement) covering, in the aggregate, Class A Units equal to or greater than the number of Class A Units determined by Buyer as sufficient for Buyer’s purposes (the “Minimum Condition”). The closing of the purchase and sale of the Seller Units (the “Closing”) shall occur within ten (10) days after delivery of the Acceptance Notice, and in no event later than one hundred twenty (120) days after the Effective Date (the “Outside Date”). Buyer may waive the Minimum Condition in its sole discretion and deliver an Acceptance Notice at any time before the Outside Date. If no Acceptance Notice has been delivered on or before the Outside Date, this Agreement shall automatically terminate and neither party shall have any further obligation hereunder.
3. Lock-Up. From the Effective Date until the earlier of the Closing or the termination of this Agreement, Seller shall not sell, transfer, assign, pledge, encumber, or grant any option or other right with respect to any of the Seller Units, or solicit, entertain, or accept any offer therefor from any other Person.
4. Consent Support. From the Effective Date until the earlier of the Closing or the termination of this Agreement, Seller shall, promptly upon Buyer’s written request, execute and deliver in Seller’s capacity as a Member such written consents, approvals, or waivers in respect of the Seller Units as Buyer may reasonably request in connection with (a) any exercise of member information or inspection rights, (b) any amendment of the LLC Agreement, or (c) any financing or recapitalization of the Company supported by Buyer; provided that no such action shall treat Seller or Seller’s remaining interests, if any, less favorably than the interests of Members generally. To secure this covenant, Seller grants Buyer an irrevocable proxy, coupled with an interest, to execute such consents in Seller’s name if Seller fails to deliver within five (5) business days of request. This Section survives until the Closing or termination of this Agreement.
5. Acknowledgments of Seller. Seller acknowledges and agrees that: (a) the Company’s business involves a high degree of risk, the Company has significant senior secured indebtedness, and the Company’s financial condition, financing arrangements, and capital structure may change materially at any time, including through financings at prices below prior valuations that would dilute non-participating holders; (b) Buyer is an interested party whose interests may differ from Seller’s, and Buyer may possess information regarding the Company that Seller does not possess; Seller has determined to proceed without regard to any such information and expressly waives any claim based on Buyer’s non-disclosure thereof; (c) Seller has had the opportunity, as a Member, to seek information from the Company under the LLC Agreement and to consult Seller’s own advisers; and (d) Seller is a sophisticated party capable of evaluating the merits and risks of the sale and has made its own independent decision.
5. Consent and Support. Until the earlier of the Closing or the termination of this Agreement, Seller shall, if requested by Buyer in connection with any recapitalization, financing, or amendment of the LLC Agreement supported by Buyer: (a) execute and deliver written consents, in Seller’s capacity as a Member (including, if applicable, as an Investor Member), with respect to all Seller Units; and (b) not grant any proxy or written consent with respect to the Seller Units inconsistent with clause (a). This covenant terminates automatically upon any termination of this Agreement, and nothing in this Section obligates Seller to make any additional investment or capital contribution.
6. Confidentiality. Seller shall keep confidential the existence and terms of this Agreement, other than disclosures to Seller’s advisers or as permitted by Section 10.1(d) of the LLC Agreement.
7. Successors and Assigns; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Seller may not assign this Agreement or any rights or obligations hereunder without Buyer’s prior written consent. Buyer may, in its sole discretion and without Seller’s consent, upon written notice to Seller, assign all or any portion of its rights, interests, or obligations under this Agreement to any Person; provided, that (a) as a condition to the Closing of any transfer of Seller Units to such assignee, the assignee shall be an existing Class A Member of the Company or a Permitted Assignee under Section 7.2(a) of the LLC Agreement as of the Closing, and Buyer may cause any assignee to become a Member of the Company prior to the Closing (including by acquisition of Class A Units and execution of a Joinder Agreement) in order to satisfy this condition; and (b) no assignment shall relieve Buyer of its obligation to cause the Purchase Price to be paid at the Closing unless and until such obligation is performed in full. Upon any permitted assignment, the assignee shall succeed to the assigned rights and obligations of Buyer hereunder.
8. Miscellaneous. This Agreement is governed by Arizona law. This Agreement, the Purchase Agreement, and the documents referenced therein constitute the entire agreement of the parties regarding the subject matter hereof. This Agreement may be executed and delivered electronically and in counterparts.
SELLER:
Date: ____________
ACKNOWLEDGED — BUYER: [BUYER MEMBER ENTITY]
Membership Interest Purchase Agreement
This Membership Interest Purchase Agreement (this “Agreement”) is made and entered into as of ____________, 2026 (“Effective Date”), by and between , (“Seller”), and [BUYER MEMBER ENTITY], an existing Class A Member of The Pharm, LLC (“Buyer”).
Recitals
A. Seller owns an aggregate of Class A Units representing limited liability company membership interests (“Class A Units”) of The Pharm, LLC, a Delaware limited liability company (“Company”), all of which Seller desires to sell to Buyer (the “Seller Units”);
B. Pursuant to the Company’s right of first refusal as set forth in Section 7.6 of the Company’s Third Amended and Restated Limited Liability Company Agreement, dated as of July 2020 (“LLC Agreement”), and consistent with the Company’s established practice for transfers between Members, Seller, as a matter of courtesy and not approval, has notified or will notify the Company of its intent to Transfer (as defined in the LLC Agreement) the Seller Units;
C. Pursuant to Section 7.2(a)(C) of the LLC Agreement, a “Permitted Assignee” includes any other Member, and pursuant to Section 7.6(d) of the LLC Agreement, the provisions of Section 7.6 do not apply to Transfers made in accordance with Section 7.2;
D. Any Units transferred to a Permitted Assignee shall remain subject to all rights, obligations, restrictions, or repurchase rights to which the Units are subject prior to the transfer, pursuant to Section 7.2(a) of the LLC Agreement;
E. Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, all of the Seller Units.
Agreement
1. Incorporation of Recitals. The above Recitals are incorporated into this Agreement as if set forth fully herein.
2. Purchase and Sale Transaction. Pursuant to the terms of this Agreement, at the Closing (as hereinafter defined), Seller shall sell, convey, transfer, and assign to Buyer, and Buyer shall purchase from Seller, the Seller Units for an aggregate purchase price equal to the greater of (a) , representing fifty percent (50%) of Seller’s aggregate original investment in respect of the Seller Units, or (b) if the Company has completed a rights offering or other issuance of Class A Units prior to the Closing, fifty percent (50%) of the per-unit price of such issuance multiplied by the number of Seller Units (the “Purchase Price”), by wire transfer of immediately available funds pursuant to wire instructions delivered by Seller.
3. Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur within ten (10) days after the date on which Buyer delivers written notice to Seller that Buyer has received executed subscription agreements from Class A Members of the Company covering, in the aggregate, a number of Class A Units equal to or greater than the number determined by Buyer as sufficient for Buyer’s purposes (the “Minimum Condition”), via the electronic exchange of documents together with, if necessary, a Joinder Agreement; provided, that (a) Buyer may waive the Minimum Condition in its sole discretion, and (b) if the Closing has not occurred on or before the date that is one hundred twenty (120) days after the Effective Date, this Agreement shall automatically terminate and neither Party shall have any further obligation hereunder except as expressly surviving.
4. Title. Title to the Seller Units shall pass to Buyer at the Closing upon payment of the Purchase Price and the execution of an assignment of membership interests in customary form.
5. Representations and Warranties of Seller. Seller represents and warrants that: (a) Seller is the lawful owner, beneficially and of record, of the Seller Units, free and clear of all liens, claims, and encumbrances (except as held by the Company or arising under the LLC Agreement), with full power to sell and deliver the Seller Units; (b) Seller has full right, power, and authority to enter into and perform this Agreement, which constitutes a valid and binding obligation of Seller; (c) there are no actions, suits, or claims pending or threatened affecting Seller’s ownership of the Seller Units; (d) Seller is sophisticated and capable of evaluating the merits and risks of the sale, has reviewed such information as Seller deems appropriate, and has made an independent decision to sell without reliance on Buyer or the Company; and (e) neither the Company nor anyone acting on its behalf has made any representation to Seller in connection with this sale.
6. Representations and Warranties of Buyer. Buyer represents and warrants that: (a) Buyer is an “accredited investor” under Rule 501(a) of the Securities Act; (b) Buyer has full authority to enter into and perform this Agreement; (c) Buyer is purchasing for its own account for investment and not with a view to distribution; (d) Buyer is aware of the risks and illiquidity of the Seller Units and can bear the complete loss of its investment; (e) no general solicitation was used in connection with this transaction; and (f) the transfer is exempt from registration and is made in compliance with applicable securities laws.
7. Indemnification. Each Party shall indemnify, hold harmless, and defend the other Party and its representatives against all Losses arising from such Party’s breach of this Agreement, other than Losses arising from the Indemnified Party’s gross negligence, willful misconduct, or bad-faith failure to perform.
8. General. Severability; entire agreement; costs of enforcement to the prevailing party; binding on successors and permitted assigns; governed by Arizona law with exclusive jurisdiction and venue in the Federal and State courts sitting in Maricopa County, Arizona; counterparts and electronic signatures permitted.
BUYER: [BUYER MEMBER ENTITY]
SELLER:
Joinder Agreement
[Form per Exhibit A to the LLC Agreement — to be executed by Buyer at the Closing, if and to the extent required]
The undersigned acknowledges the acquisition of Units of THE PHARM, LLC, a Delaware limited liability company (the “Company”). Reference is made to that certain Third Amended and Restated Limited Liability Company Agreement, dated as of July ___, 2020 (the “LLC Agreement”), by and among the Company and the Members named therein. The undersigned further acknowledges that such acquisition of Units is subject to the joinder by the undersigned to the LLC Agreement. Accordingly, pursuant to Section 5.4 of the LLC Agreement, the undersigned hereby irrevocably and unconditionally agrees that he, she, or it, as the case may be, has, as of the date hereof, become a party to the LLC Agreement as a Member (as defined in the LLC Agreement), with all the attendant rights and obligations thereof.
Dated: __________, 20__
If a legal entity or trust:
Entity Name: [BUYER MEMBER ENTITY]
Sign Name: ____________________
Print Name: ____________________
Title: ____________________
Address: ____________________
Agreed and Acknowledged:
THE PHARM, LLC
By: ____________________
Name: ____________________
Title: ____________________