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EXHIBIT 10.37    
  

 
 

FIFTH AMENDMENT TO CREDIT AGREEMENT    
  

        FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as of February 7, 2003, among UBIQUITEL OPERATING COMPANY, a corporation organized and
existing under the laws of the State of Delaware (the "Borrower"), UBIQUITEL INC., a corporation organized and existing under the laws of the State of Delaware ("Holdings"), the various banks
from time to time party to the Credit Agreement referred to below (each a "Bank" and collectively, the "Banks"), BNP PARIBAS (f/k/a PARIBAS), as Administrative Agent and BNP PARIBAS (f/k/a PARIBAS),
as Lead Arranger. Unless otherwise indicated, all capitalized terms used herein and not otherwise defined herein shall have the respective meanings provided such terms in the Credit Agreement referred
to below. 

W
I T N E S S E T H: 

        WHEREAS,
the Borrower, Holdings, the Banks, the Lead Arranger and the Administrative Agent are parties to a Credit Agreement, dated as of March 31, 2000 (as amended by the First
Amendment to Credit Agreement, dated as of May 5, 2000, as further amended by the Second Amendment and Consent to Credit Agreement, dated as of March 1, 2001, as further modified by the
Consent to Credit Agreement, dated as of July 25, 2001, as further amended by the Third Amendment to Credit Agreement, dated as of December 18, 2001 and as further amended by the Fourth
Amendment to Credit Agreement, dated as of July 17, 2002, the "Credit Agreement"); and 

        WHEREAS,
subject to the terms and conditions of this Amendment, the parties hereto wish to amend the Credit Agreement as herein provided; 

        NOW,
THEREFORE, it is agreed: 

I.    Amendments to Credit Agreement.

        1.    On
and after the date on which the Borrower shall have consummated the first Permitted Exchange Offer, Section 3.03(d) of the Credit Agreement is hereby amended by
deleting the amount of "$6,875,000" appearing opposite the date "September 30, 2007" appearing in the table in said Section and inserting the amount "$1,875,000" in lieu thereof. 

        2.    Section 3.03
of the Credit Agreement is hereby further amended by inserting the following new Section 3.03(h) at the end of said Section: 

"(h)    In
addition to any other mandatory commitment reductions pursuant to this Section 3.03, the Total Revolving Loan Commitment (and the Revolving Loan Commitment of each Bank
with such a Commitment) shall be permanently reduced by $5,000,000 on the date on which the Borrower shall have consummated the first Permitted Exchange Offer (to the extent that such day is not a
Business Day then the required date of such Commitment reduction shall be the immediately succeeding Business Day).". 

        3.    Section 4.02(A)(d)(i) of
the Credit Agreement is hereby amended by deleting the text "(excluding the Equity Financing or the Bridge Financing)" appearing in
said Section and inserting the text "(excluding (i) any such cash proceeds resulting from the consummation of the Equity Financing, the Bridge Financing or any Exchange Offer Capital
Contribution and (ii) solely on and after the date upon which the Borrower shall have consummated a Permitted Exchange Offer, any such cash proceeds that are used by the Borrower for general
corporate purposes)" in lieu thereof. 

        4.    Section 4.02(A)(d)(ii) of
the Credit Agreement is hereby amended by deleting the second parenthetical appearing in said Section and inserting the text
"(other than Indebtedness permitted by Section 9.05 as said Section is in effect on the Fifth Amendment Effective Date)" in lieu thereof. 

 

        5.    Section 4.02(A)
of the Credit Agreement is hereby amended by inserting new Sections 4.02(A)(j) and (k) at the end of said Section: 

        "(j)    In
addition to any other mandatory repayments or commitment reductions pursuant to this Section 4.02, on the date on which the Borrower consummates the first
Permitted Exchange Offer, an amount equal to $15,000,000 shall be paid by the Borrower and applied as provided in Section 4.02(B); provided that
to the extent that any mandatory repayments and/or commitment reductions were required to be made and were actually made by the Borrower pursuant to Section 4.02(A)(f) to the extent (and only
to the extent) related to the sale-leaseback transaction permitted by Section 9.02(ix)(C)(1) hereof at any time prior to the consummation of such first Permitted Exchange Offer, the
aggregate amount of mandatory repayments and/or commitment reductions required to be made and applied pursuant to this clause (j) shall be reduced (but in no event to less than zero) by the
aggregate amount of any such repayments or reductions actually made. 

        (k)    In
addition to any other mandatory repayments or commitment reductions pursuant to this Section 4.02, an amount equal to 100% of any voluntary or optional
payments or prepayments made by Holdings or any of its Subsidiaries on account of Indebtedness evidenced by any Exchange Offer Notes (to the extent permitted to be made hereunder) shall be applied as
provided in Section 4.02(B).". 

        6.    Section 4.02(B)
of the Credit Agreement is hereby amended by inserting the text "and Sections 4.02(A)(j) and (k)" immediately following the text "through (g),
inclusive," appearing in clause (a) of said Section. 

        7.    Section 7
of the Credit Agreement is hereby amended by inserting the following new Sections 7.35 and 7.36 at the end of said Section: 

        "7.35    Permitted Exchange Offer.    In connection with the consummation of any Permitted Exchange Offer in
accordance with the terms hereof, all material aspects of any such Permitted Exchange Offer shall have been effected in accordance with applicable law. At the time of the consummation thereof, all
consents and approvals of, and filings and registrations with, and all other actions in respect of, all governmental agencies, authorities or instrumentalities required in order to consummate any such
Permitted Exchange Offer shall have been obtained, given, filed or taken and are in full force and effect (or effective judicial relief with respect thereto has been obtained). All applicable waiting
periods with respect thereto have or, prior to the time when required, will have, expired without, in all such cases, any action being taken by any competent authority which restrains, prevents or
imposes material adverse conditions upon the consummation of such Permitted Exchange Offer. All corporate and other similar approvals necessary for the consummation of any such Permitted Exchange
Offer shall have been obtained and remain in full force and effect. Additionally, at the time of the consummation thereof, there shall not exist any judgment, order or injunction prohibiting or
imposing material adverse conditions upon the consummation of such Permitted Exchange Offer. The Senior Unsecured Notes issued pursuant to each Permitted Exchange Offer will constitute, and as
structured on the Fifth Amendment Effective Date do constitute (and qualify as), "Permitted Refinancing Indebtedness" (as defined in the Senior Subordinated Discount Notes Documents). 

        7.36    Exchange Offer Notes.    As of the date of each issuance of any Exchange Offer Notes, the Borrower is entitled
to incur the Indebtedness evidenced by any such Exchange Offer Notes in reliance on
Section 4.09(a) of the Senior Subordinated Discount Notes Indenture (dated as of April 11, 2000) (it being understood and agreed by the parties hereto that for the purpose of calculating
the Consolidated Debt to Annualized Operating Cash Flow Ratio (as defined in the Senior Subordinated Discount Note Indenture), Consolidated Debt (as defined in the Senior 

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Subordinated Discount Note Indenture) shall include all Loans outstanding and all available undrawn Commitments, in each case, as of the relevant calculation date).". 

        8.    Section 8
of the Credit Agreement is hereby amended by inserting the following new Sections 8.23 and 8.24 immediately at the end of said Section: 

        "8.23    Leases.    (a)    Promptly following, but in no event more than 90 days following the Fifth
Amendment Effective Date, Holdings shall cause Via and its Subsidiaries to grant a first priority leasehold mortgage (in form and substance satisfactory to the Administrative Agent) securing the
Obligations on at least 75% of the tower, rooftop, ground, co-location or similar leases to which Via and its Subsidiaries are party on the Fifth Amendment Effective Date excluding for
this purpose any tower, rooftop, ground, co-location or similar leases which constitute part of the assets to be sold pursuant to the sale-leaseback transaction described in
Section 9.02(ix)(C)(1); provided, that, solely to the extent that (i) Via and its Subsidiaries shall have granted first priority leasehold
mortgages with respect to at least 60% of the tower, rooftop, ground, co-location or similar leases described in this clause (a) within the time period provided for in this
clause (a) and (ii) Holdings, Via and each of their respective Subsidiaries shall have used their collective commercially reasonable efforts to obtain the first priority leasehold
mortgages required to be obtained in connection with the remaining tower, rooftop, ground, co-location or similar leases described in this clause (a) and, notwithstanding any such
efforts, for reasons not attributable to Holdings, Via or any of their respective Subsidiaries, could not obtain one or more of such required leasehold mortgages within the time periods stipulated in
this clause (a), such failure shall not constitute a Default or Event of Default pursuant to Section 10.03. 

        (b)    Promptly
following, but in no event more than 210 days after the Fifth Amendment Effective Date, Holdings shall cause Via and its Subsidiaries to grant a first
priority mortgage or leasehold mortgage, as applicable (in form and substance satisfactory to the Administrative Agent) securing the Obligations on at least 75% of the tower, rooftop, ground,
co-location or similar leases to which Via and its Subsidiaries are party on the Fifth Amendment Effective Date which constitute part of the assets to be sold pursuant to the
sale-leaseback transaction described in Section 9.02(ix)(C)(1) which have not been sold on or before such date. 

        (c)    Promptly
following, but in no event more than 30 days after Via or any of its Subsidiaries enters into any tower, rooftop, ground, co-location or
similar leases after the Fifth Amendment Effective Date (including, without limitation, any such leases entered into in connection with the sale-leaseback transaction described in
Section 9.02(ix)(C)(1)), Holdings shall cause Via and its Subsidiaries to grant a first priority leasehold mortgage (in form and substance satisfactory the Administrative Agent) securing the
Obligations on such leases. 

        (d)    The
leasehold mortgages or mortgages entered into pursuant to clauses (a), (b) and (c) of this Section 8.23 shall comply in all respects with
Section 8.17(b) to the extent applicable in the judgment of the Administrative Agent. 

        (e)    Promptly
following, but in no event more than 90 days following the Fifth Amendment Effective Date, Holdings and the Borrower shall, or shall otherwise cause each
of their respective Subsidiaries to, (i) transfer any Tower Site Lease to the Leases Subsidiary to which it or any of its respective Subsidiaries is a party to or any other tower, rooftop or
similar lease to which it is a party used for the operation of the Service Area Network, (ii) deliver to the Administrative Agent all documents executed and delivered in connection with such
transfer, which documents shall be in form, scope and substance satisfactory to the Administrative Agent and (iii) execute and deliver agreements with the Leases Subsidiary in form and
substance substantially similar to the Leases Subsidiary Funding Agreement in connection with each such transfer. 

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        8.24    Landlord Agreement.    Promptly following, but in no event more than 30 days following the Fifth Amendment
Effective Date, the Borrower shall have delivered to the Collateral Agent an agreement, in form and substance satisfactory to the Administrative Agent, from the landlord of the Real Property leased to
Holdings and/or the Borrower at One West Elm Street, Suite 400, Conshohocken, PA 19428 acknowledging, among other things, the Collateral Agent's security interests in property maintained on the leased
premises and waiving its own security interest, if any, thereon and the Collateral Agent's authority to obtain access to such property and covering such other matters as the Collateral Agent may
reasonably request.". 

        9.    Section 9.02(ix) of
the Credit Agreement is hereby amended by (i) deleting each reference to "the Borrower" appearing in said Section (other than in
clause (D) of said Section, which reference shall remain the same) and inserting the text "Holdings or any of its Subsidiaries" in lieu thereof and (ii) inserting the text
"provided that the Net Sale Proceeds received as the result of the consummation of a sale-leaseback transaction of the type described in
sub-clause (C)(1) of this clause (ix) and consummated in accordance with the terms hereof shall not be required to be applied as (and to the extent) required by
Section 4.02 hereof solely in the event that (1) such sale-leaseback transaction is consummated on or after the date upon
which a Permitted Exchange Offer shall have been consummated by the Borrower in accordance with the terms hereof and the mandatory repayments and/or commitment reductions required to be made pursuant
to Section 4.02(A)(j) shall have been made and (2) the aggregate amount of such Net Sale Proceeds does not exceed $15,000,000 (the excess of any such Net Sale Proceeds to be applied in
accordance with Section 4.02(A)(f))" immediately prior to the semicolon appearing in said Section. 

        10.    Section 9.04
of the Credit Agreement is hereby amended by (i) inserting the text "(a)" immediately before the text "Neither" appearing in said Section and
(ii) inserting the following text immediately at the end of said Section: 

        "(b)    Holdings
and the Borrower will not, and will not permit any of their respective Subsidiaries other than the Leases Subsidiary to, directly or indirectly, enter into any
tower, ground, co-location or rooftop leases for the operation of the Service Area Network. 

        11.    Section 9.05
of the Credit Agreement is hereby amended by (i) deleting the text "and" appearing at the end of clause (vii) of said Section,
(ii) deleting the period appearing at the end of clause (viii) of said Section and inserting a semicolon in lieu thereof and (iii) inserting the following new clauses
(ix) and (x) immediately following clause (viii) appearing in said Section: 

        "(ix)    Indebtedness
evidenced by the Senior Unsecured Notes (substantially in the form agreed to by the Banks on the Fifth Amendment Effective Date (with any such amendments
or modifications thereto as may be acceptable to the Administrative Agent)) less the amount of principal repayments thereof and senior guaranties (substantially in the form agreed to by the Banks on
the Fifth Amendment Effective Date (with any such amendments or modifications thereto as may be acceptable to the Administrative Agent)) with respect thereto and from parties also guaranteeing the
Obligations on a senior basis; and 

        (x)    Indebtedness
evidenced by any Exchange Offer Notes (substantially in the form agreed to by the Banks on the Fifth Amendment Effective Date (with any such amendments or
modifications thereto as may be acceptable to the Administrative Agent)) less the amount of principal repayments thereof.". 

        12.    Section 9.08(a)
of the Credit Agreement is hereby amended by inserting the following new Section 9.08(a)(3) immediately following clause (a)(2)
appearing in said Section: 

        "(3)    Notwithstanding
anything to the contrary contained in clauses (a)(1) or (a)(2) above, to the extent that any Permitted Exchange Offer is consummated in accordance with
the terms hereof, Holdings, on and after the date on which such Permitted Exchange Offer is consummated, 

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will not, and will not permit any of its Subsidiaries to, make or commit to make any Capital Expenditures, except that the Borrower and its Subsidiaries may make Capital Expenditures so long as the
aggregate amount thereof does not exceed during any period or fiscal year set forth below the amount set forth below opposite such date: 

	Fiscal Year Ended
 
	 	Amount
	 
	December 31, 2003	 	$	30,000,000	 
	December 31, 2004	 	 	30,000,000	 
	December 31, 2005	 	 	40,000,000	 
	December 31, 2006 and each fiscal year thereafter	 	 	35,000,000	".

        13.    Section 9.08(b)
of the Credit Agreement is hereby amended by inserting the text "; provided, further, that any
amounts carried forward from the fiscal year immediately preceding the fiscal year in which the Borrower shall have consummated the first Permitted Exchange Offer and available to be used during such
fiscal year shall in no event exceed $12,500,000" immediately preceding the period appearing at the end of said Section. 

        14.    Section 9.16(i) of
the Credit Agreement is hereby amended by deleting the text "as applicable, or the Preferred Stock" appearing in said Section and
inserting the text "the Preferred Stock, the Senior Unsecured Notes or (except as set forth in the immediately succeeding proviso) the Exchange Offer Notes, as applicable;  provided that (x)
 Holdings may, and may permit any of its Subsidiaries to, make any such voluntary or optional payment or prepayment on account
of any Exchange Offer Notes solely to the extent that the Borrower first makes a mandatory repayment in accordance with Section 4.02(A)(k) hereof simultaneously with any such voluntary or
optional payment or prepayment in an amount equal to the payment made on the account of any such Exchange Offer Notes and (y) Holdings may permit the Borrower to make any such repayments on
account of any Senior Subordinated Discount Notes constituting the cash component of a Permitted Exchange Offer, to the extent specifically permitted hereunder and strictly in accordance with the
terms hereof" in lieu thereof. 

        15.    Section 9.16(ii) of
the Credit Agreement is hereby amended by inserting the text "or the Senior Unsecured Notes Documents or the Exchange Offer Notes
Documents" immediately following the text "or the Bridge Financing Documents" appearing in said Section. 

        16.    Section 9.26
of the Credit Agreement is hereby amended by (i) inserting the text "(a)" immediately prior to the text "Holdings shall not permit" and
(ii) inserting the following new clauses (b) and (c) at the end of said Section: 

        (b)    Notwithstanding
anything to the contrary contained in Section 9.26(a) above, in the event that the Borrower consummates a Permitted Exchange Offer in accordance
with the terms hereof, each of the amounts set forth in clause (a) above shall be increased by any Net Sale Proceeds received by the Borrower as a result of the consummation of a
sale-leaseback transaction permitted pursuant to Section 9.02(ix) of the type described in Section 9.02(ix)(C)(1). 

        (c)    Notwithstanding
anything to the contrary contained in Section 9.26(a) above, in the event that the Borrower consummates a Permitted Exchange Offer in accordance
with the terms hereof, each of the amounts set forth in clause (a) above shall be reduced by the aggregate amount of mandatory repayments required to be made by the Borrower on such date
pursuant to Section 4.02(A)(j) and actually made by the Borrower.". 

        17.    The
definition of "Consolidated Indebtedness" appearing in Section 11 of the Credit Agreement is hereby amended by inserting the text ";  provided, further, however, that, at any time, the aggregate
principal amount of Indebtedness (as a component of "Consolidated Indebtedness") evidenced
by the Senior Unsecured Notes, for purposes of this Agreement, shall be determined without 

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giving effect to the application of FASB Statement No. 15 as it relates specifically to the Senior Unsecured Notes" immediately preceding the period appearing in said definition. 

        18.    The
definition of "Tower Sites" appearing in Section 11 of the Credit Agreement is hereby amended by inserting the text "and Via's" immediately following the text
"Borrower's" appearing in said definition. 

        19.    Section 11
of the Credit Agreement is hereby amended by inserting the following new definitions in appropriate alphabetical order: 

        "Exchange
Offer Capital Contribution" shall mean the sale or issuance of equity of the Borrower to Holdings (as otherwise permitted hereunder) or a capital contribution by Holdings to
the Borrower for the sole purpose of consummating a Permitted Exchange Offer; provided that the sum of the cash proceeds received from any such sale or
issuance, when aggregated with the sum of all outstanding Exchange Offer Notes and all other Exchange Offer Capital Contributions made to the Borrower, shall not exceed $27,700,000 at any time,  provided, however,
 that to the extent that the sum of the Exchange Offer Notes and the Exchange Offer Capital Contributions exceeds $20,000,000, any
such excess shall be attributable solely to the accrual and capitalization of interest on such Exchange Offer Notes (as permitted herein). 

        "Exchange
Offer Notes" shall mean any indebtedness for borrowed money incurred by the Borrower from any Person for the sole purpose of consummating a Permitted Exchange Offer;  provided that (i) the initial
accreted value of all such outstanding Indebtedness shall not exceed $20,000,000 and the
aggregate principal amount of all such outstanding Indebtedness (immediately after giving effect to any such incurrence and after giving effect to the capitalization of any interest payments that will
accrue from the issuance thereof until such date upon which any interest payments are required to be paid by the Borrower in cash to the holder of said Exchange Offer Notes in accordance with the
terms thereof), when aggregated with the sum of all Exchange Offer Capital Contributions made to the Borrower at the time, shall not exceed $27,700,000, (ii) such Indebtedness shall not have a
maturity date that is earlier than December 31, 2008, (iii) such Indebtedness shall (A) constitute the unsecured obligations of the Borrower and (B) bear interest at a
stated annual rate of no more than 14% payable semi-annually, with any payments on account of such Indebtedness (including interest and principal payments) commencing solely on or after
October 15, 2005, (iv) other than as specifically set forth in sub-clause (ii) above, such Indebtedness shall have terms substantially similar to the terms of the
Senior Unsecured Notes, (v) the cash proceeds received by the Borrower in connection with any incurrence of Indebtedness on account of any Exchange Offer Notes shall be at least equal to the
initial accreted value of such Exchange Offer Notes and (vi) such Indebtedness shall have been issued in accordance with the terms of the relevant Exchange Offer Notes Documents. 

        "Exchange
Offer Notes Documents" shall mean all documents, instruments and agreements executed and delivered in connection with the incurrence by the Borrower of any Exchange Offer
Notes, which documents, instruments and agreements shall be substantially in the form agreed to by the Banks on the Fifth Amendment Effective Date (with any amendments and modifications thereto as may
be acceptable to the Administrative Agent). 

        "Fifth
Amendment" shall mean that certain Fifth Amendment to Credit Agreement, dated as of February 7, 2003, among the Borrower, Holdings, the Banks party thereto, the
Administrative Agent and the Lead Arranger. 

        "Fifth
Amendment Effective Date" shall have the meaning provided in the Fifth Amendment. 

        "Permitted
Exchange Offer" shall mean one or more related or unrelated exchange offers consummated by the Borrower no later than 365 days following the Fifth Amendment Effective
Date pursuant to which the Borrower shall have offered to exchange and subsequently exchanged 

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its outstanding (as of the Fifth Amendment Effective Date) Senior Subordinated Discount Notes for any combination of Senior Unsecured Notes, cash or common stock of Holdings (or warrants for the
purchase of common stock of Holdings); provided that on or prior to the consummation of any such exchange offer, the following conditions shall have
been satisfied: (i) on or prior to the date of consummation of the first Permitted Exchange Offer, Holdings shall have provided the Banks with a copy of a letter of intent executed and
delivered by Holdings and a purchaser for the sale and leaseback of 99 tower sites and one rooftop site located in the central valley of California, pursuant to which Holdings or the Borrower shall
receive gross proceeds equal to at least $9,000,000, which letter of intent shall be in form, scope and substance satisfactory to the Banks, (ii) on or prior to the date of consummation of the
first Permitted Exchange Offer, Holdings shall have provided the Banks with an opinion, in form, scope and substance satisfactory to the Banks, from PriceWaterhouseCoopers, accountants to Holdings,
concluding that Holdings is entitled to receive a tax refund from the United
States Internal Revenue Service, during Holdings' fiscal year ended December 31, 2003, equal to at least $9,000,000, (iii) immediately prior to and immediately following the consummation
of any Permitted Exchange Offer, no event shall have occurred that could reasonably be expected to have a material adverse effect on the performance, business, assets, nature of assets, liabilities
(contingent or otherwise), operations, properties, condition (financial or otherwise), solvency or prospects of the Borrower, Holdings and each of their respective Subsidiaries, (iv) on or
prior to the consummation of any Permitted Exchange Offer, the Borrower, Holdings and each of their respective Subsidiaries, to the extent required, shall have obtained all of the consents,
authorizations and approvals described in Section 7.35 hereof and shall have taken any other material action required to be taken hereunder and in accordance with applicable law in connection
with such Permitted Exchange Offer, (v) on the date of consummation of the first Permitted Exchange Offer, the Borrower shall have made the mandatory repayments and/or commitment reductions
required pursuant to Section 4.02(A)(j) hereof, (vi) no Default or Event of Default shall exist either immediately prior or immediately after giving effect to any Permitted Exchange
Offer, (vii) the Senior Unsecured Notes of the Borrower issued pursuant to any Permitted Exchange Offer shall meet the conditions set forth in the definition thereof and shall not exceed, in
aggregate principal amount, 35% of the aggregate principal amount of Senior Subordinated Discount Notes tendered for exchange in any particular Permitted Exchange Offer and, when aggregated with any
other Senior Unsecured Notes issued pursuant to any other Permitted Exchange Offer, shall not have (1) a total aggregate principal amount (after giving effect to the capitalization of any
interest payments that will accrue on such notes in accordance with the terms thereof) greater than $105,000,000 or (2) a total aggregate initial (as of the date of consummation of each such
Permitted Exchange Offer) accreted principal value greater than $75,000,000, (viii) on the date of consummation of the first Permitted Exchange Offer, Holdings shall have provided the
Administrative Agent with a certificate dated the date of such consummation signed by the Chief Financial Officer of Holdings demonstrating compliance with Sections 9.15 and 9.26 hereof (for the
fiscal quarter ended December 31, 2002), (ix) the cash consideration component of any Permitted Exchange Offer shall be derived solely
from the proceeds of an Exchange Offer Capital Contribution or Exchange Offer Notes and shall not exceed with respect to all such Permitted Exchange Offers $20,000,000 at any time (for the avoidance
of doubt, the cash consideration component of any Permitted Exchange Offer shall never be derived from the proceeds of any Loans made hereunder or any cash on hand of the Borrower, Holdings or any of
their respective Subsidiaries), (x) the consummation of any Permitted Exchange Offer shall not result in the incurrence by Holdings or any of its Subsidiaries of any material tax liability and
(xi) the Borrower shall have provided to the Administrative Agent copies of any and all legal opinions delivered in connection with any Permitted Exchange Offer and reliance letters from
Holdings' or the Borrower's counsel that provides such opinions permitting a reliance thereon by the Administrative Agent, the Banks and the Collateral Agent. 

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        "Senior
Unsecured Notes" shall mean the Borrower's senior unsecured notes issued pursuant to the Senior Unsecured Notes Documents in connection with, and pursuant to, a Permitted
Exchange Offer; provided that such Senior Unsecured Notes (i) shall be unsecured obligations of the Borrower, (ii) shall bear interest at
a stated annual rate of no more than 14% payable semi-annually, with any payments of interest solely payable on or after October 15, 2005, (iii) shall have a final maturity
date no earlier than April 15, 2010 and (iv) shall have an amortization schedule substantially similar (in terms of dates) to the schedule currently applicable to the Senior Subordinated
Discount Notes. 

        "Senior
Unsecured Notes Documents" shall mean all documents, instruments and agreements substantially in the form agreed to by the Banks on the Fifth Amendment Effective Date (with any
such amendments or modifications thereto as may be acceptable to the Administrative Agent) executed and delivered in connection with the issuance by the Borrower of the Senior Unsecured Notes. 

        20.    Section 13.02
of the Credit Agreement is hereby amended by (i) inserting the text "(a)" immediately prior to the text "In addition to any rights" appearing
at the beginning of said Section and (ii) inserting the following text immediately at the end of said Section: 

"(b)    NOTWITHSTANDING
THE FOREGOING SUBSECTION (a), AT ANY TIME THAT THE LOANS OR ANY OTHER OBLIGATION SHALL BE SECURED BY REAL PROPERTY LOCATED IN CALIFORNIA, NO BANK OR THE
ADMINISTRATIVE AGENT SHALL EXERCISE A RIGHT OF SETOFF, LIEN OR COUNTERCLAIM OR TAKE ANY COURT OR ADMINISTRATIVE ACTION OR INSTITUTE ANY PROCEEDING TO ENFORCE ANY PROVISION OF THIS AGREEMENT OR ANY
NOTE UNLESS IT IS TAKEN WITH THE CONSENT OF THE REQUIRED BANKS OR, TO THE EXTENT REQUIRED BY SECTION 13.12 OF THIS AGREEMENT, ALL OF THE BANKS, OR APPROVED IN WRITING BY THE ADMINISTRATIVE AGENT, IF
SUCH SETOFF OR ACTION OR PROCEEDING WOULD OR MIGHT (PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 580a, 580b, 580d AND 726 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE OR SECTION 2924 OF THE
CALIFORNIA CIVIL CODE, IF APPLICABLE, OR OTHERWISE) AFFECT OR IMPAIR THE VALIDITY, PRIORITY, OR ENFORCEABILITY OF THE LIENS GRANTED TO THE COLLATERAL AGENT PURSUANT TO THE SECURITY DOCUMENTS OR THE
ENFORCEABILITY OF THE NOTES AND OTHER OBLIGATIONS HEREUNDER, AND ANY ATTEMPTED EXERCISE BY ANY BANK OR THE ADMINISTRATIVE AGENT OF ANY SUCH RIGHT WITHOUT OBTAINING SUCH CONSENT OF THE REQUIRED BANKS
OR THE ADMINISTRATIVE AGENT SHALL BE NULL AND VOID. THIS SUBSECTION (b) SHALL BE SOLELY FOR THE BENEFIT OF EACH OF THE BANKS AND THE ADMINISTRATIVE AGENT HEREUNDER.". 

II.    Miscellaneous Provisions.

        1.    In
order to induce the Banks to enter into this Amendment, the Borrower hereby represents and warrants that: 

        (a)    no
Default or Event of Default exists as of the Fifth Amendment Effective Date both immediately prior to and immediately after giving effect to this Amendment; 

        (b)    all
of the representations and warranties contained in the Credit Agreement or the other Credit Documents are true and correct in all material respects on the Fifth
Amendment Effective Date, both before and after giving effect to this Amendment, with the same effect as though such representations and warranties had been made on and as of the Fifth Amendment
Effective Date 

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(it being understood that any representation or warranty made as of a specific date shall be true and correct in all material respects as of such specific date); and 

        (c)    the
tower, rooftop, ground, co-location or similar leases to which Via and its Subsidiaries are party on this Fifth Amendment Effective Date are set forth as
Annex A to this Amendment and said Annex A identifies which of said leases constitutes part of the assets to be sold pursuant to the sale-leaseback transaction described in
Section 9.02(ix)(C)(1). 

        2.    On
the Fifth Amendment Effective Date, the Borrower hereby agrees to pay in immediately available funds to the Administrative Agent for distribution to each Bank that
executes and delivers to the Administrative Agent (or its designee) a counterpart of this Amendment by the close of business on February 12, 2003, a non-refundable cash fee in an
amount (in U.S. dollars) equal to 15 basis points (0.15%) of an amount equal to the sum of the outstanding principal amount of A Term Loans, B Term Loans and Revolving Loan Commitment of such Bank, in
each case, as the same is in effect on the Fifth Amendment Effective Date, which fee shall not be subject to counterclaim or set-off for, or be otherwise affected by, any claim or dispute
relating to any other matter. 

        3.    This
Amendment is limited as specified and shall not constitute a modification, acceptance or waiver of any other provision of the Credit Agreement or any other Credit
Document. 

        4.    This
Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts when executed and
delivered shall be an original, but all of which shall together constitute one and the same instrument. A complete set of counterparts shall be lodged with the Borrower and the Administrative Agent. 

        5.    THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE
OF NEW YORK.

        6.    This
Amendment shall become effective on the date (the "Fifth Amendment Effective Date") when (i) the Borrower, Holdings, each Guarantor and the Required Banks
shall have signed a counterpart hereof (whether the same or different counterparts) and shall have delivered (including by way of facsimile transmission) the same to the Administrative Agent at its
Notice Office and (ii) the Borrower shall have paid the Administration Agent the fee described in Section 2 of Part II of this Amendment;  provided, that in the event that the Fifth
Amendment Effective Date shall not have occurred on or prior to the close of business on February 12,
2003, this Amendment shall be null and void and shall have no further force and effect. 

        7.    By
executing and delivering a copy hereof, each Credit Party hereby agrees that all Loans shall be fully guaranteed pursuant to the Guaranty in accordance with the terms
and provisions thereof and shall be fully secured pursuant to the Pledge Agreement and the Security Agreement. 

        8.    From
and after the Fifth Amendment Effective Date, all references in the Credit Agreement and each of the other Credit Documents to the Credit Agreement shall be deemed
to be references to the Credit Agreement as modified hereby. 

*            *            * 

9

        IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Amendment to be duly executed and delivered as of the date first above written. 

	

 	
 	
UBIQUITEL OPERATING COMPANY,

as Borrower
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	
BNP PARIBAS,

Individually, as Bank, as Administrative Agent,

as Lead Arranger
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

FORTIS CAPITAL CORP.,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

 

	

 	
 	

WEST LB AG, NEW YORK BRANCH,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

BAYERISCHE LANDESBANK, NEW YORK BRANCH,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

CITY NATIONAL BANK,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

2

 

	

 	
 	

BANK OF TOKYO-MITSUBISHI TRUST COMPANY,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

THE CIT GROUP/EQUIPMENT FINANCING, INC.,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

IBM CREDIT CORPORATION,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

LIBERTY-STEIN ROE ADVISOR FLOATING RATE ADVANTAGE FUND,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

3

 

	

 	
 	

RFC CAPITAL CORPORATION,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

STEIN ROE FLOATING RATE LIMITED LIABILITY COMPANY,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

KEYPORT LIFE INSURANCE COMPANY,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

COAST BUSINESS CREDIT,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

4

 

	

 	
 	

DZ BANK DEUTSCHE ZENTRAL- GENOSSENSCHAFTSBANK, FRANKFURT AM MAIN

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

GALAXY CLO 1999-1, LTD.,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

5

 

	

 	
 	

KZH SOLEIL LLC,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

KZH SOLEIL-2 LLC,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

GENERAL ELECTRIC CAPITAL CORPORATION,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

BANK OF AMERICA, N.A.,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

6

 

	

 	
 	

SAWGRASS TRADING LLC,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

AURUM CLO 2002-I LTD.,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

HIGHLAND LEGACY LIMITED,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

PAM CAPITAL FUNDING,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

APEX (TRIMARAN) CDO I, LTD.,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

QDRA, LLC,

as Bank
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

7

 

Each
of the undersigned, each being a Guarantor under, and as defined in, the Credit Agreement referenced in the foregoing Amendment, hereby consents to the entering into of the Amendment and agrees
to the provisions thereof (including, without limitation, Sections 6 and 7 of Part II thereof). 

	

 	
 	

UBIQUITEL INC.,

as Guarantor
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

VIA HOLDING INC.
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

VIA BUILDING, LLC
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	

 	
 	

VIA WIRELESS LLC
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

8

QuickLinks

EXHIBIT 10.37

FIFTH AMENDMENT TO CREDIT AGREEMENTEXHIBIT 10.1

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT

                                       OF

                          BIORAL NUTRIENT DELIVERY, LLC

                                 January 8, 2003

THE  MEMBERSHIP  SHARES IN BIORAL  NUTRIENT  DELIVERY,  LLC (THE  "SHARES")  ARE
SUBJECT TO THE  RESTRICTIONS  ON TRANSFER  SET FORTH IN THIS  AGREEMENT  AND THE
OTHER TERMS AND  CONDITIONS OF THIS  AGREEMENT.  NEITHER THE SHARES NOR ANY PART
THEREOF  MAY BE OFFERED  FOR SALE,  PLEDGED,  HYPOTHECATED,  SOLD,  ASSIGNED  OR
TRANSFERRED  AT ANY TIME EXCEPT IN COMPLIANCE  WITH THE TERMS AND  CONDITIONS OF
THIS AGREEMENT AND (I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER ANY
APPLICABLE  STATE  SECURITIES  LAWS OR IN A  TRANSACTION  WHICH IS  EXEMPT  FROM
REGISTRATION UNDER SUCH SECURITIES LAWS OR WHICH IS OTHERWISE IN COMPLIANCE WITH
SUCH  SECURITIES LAWS AND (II) PURSUANT TO AN EFFECTIVE  REGISTRATION  STATEMENT
UNDER THE SECURITIES  ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT"),  OR IN A
TRANSACTION WHICH IS EXEMPT FROM REGISTRATION  UNDER THE SECURITIES ACT OR WHICH
IS OTHERWISE IN COMPLIANCE WITH THE SECURITIES ACT.

<PAGE>
<TABLE>
<CAPTION>

                                                 TABLE OF CONTENTS

                                                                                                               Page
                                                                                                               ----

<S>                                                                                                            <C>
ARTICLE I FORMATION; DURATION AND PURPOSES.......................................................................1

         Section 1.1       Name..................................................................................1
                           ----
         Section 1.2       Formation.............................................................................1
                           ---------
         Section 1.3       Principal Business Office.............................................................2
                           -------------------------
         Section 1.4       Registered Office and Agent...........................................................2
                           ---------------------------
         Section 1.5       Term of the Company...................................................................2
                           -------------------
         Section 1.6       Fiscal Year...........................................................................2
                           -----------

ARTICLE II PURPOSE AND POWERS OF THE COMPANY.....................................................................2

         Section 2.1       Purpose...............................................................................2
                           -------
         Section 2.2       Powers................................................................................2
                           ------

ARTICLE III MEMBERS; MEMBERSIP SHARES; RIGHTS DISTRIBUTION PROGRAM...............................................3

         Section 3.1       Membership Shares.....................................................................3
                           -----------------
         Section 3.2       Percentage Interest...................................................................4
                           -------------------
         Section 3.3       Capital Contributions.................................................................4
                           ---------------------
         Section 3.4       Partition.............................................................................4
                           ---------
         Section 3.5       No Interest on Capital................................................................4
                           ----------------------
         Section 3.6       Withdrawal............................................................................4
                           ----------
         Section 3.7       Rights Distribution Program...........................................................4
                           ---------------------------
         Section 3.8       Substitute and Additional Members.....................................................6
                           ---------------------------------
         Section 3.9       Company Reorganization................................................................6
                           ----------------------
         Section 3.10      MM Option.............................................................................7
                           ---------

ARTICLE IV ALLOCATION OF PROFITS AND LOSS; DISTRIBUTIONS.........................................................7

         Section 4.1       Allocation of Profits and Loss........................................................7
                           ------------------------------
         Section 4.2       Distributions.........................................................................8
                           -------------
         Section 4.3       Capital Accounts......................................................................8
                           ----------------
         Section 4.4       Book/Tax Disparities; Section 754 Elections; etc......................................8
                           ------------------------------------------------
         Section 4.5       Certain Tax-Related Definitions.......................................................9
                           -------------------------------
         Section 4.6       Regulatory Allocations, Qualified Income Offset and Minimum Gain Chargebacks..........9
                           ----------------------------------------------------------------------------

                                                        -i-
<PAGE>

ARTICLE V MANAGEMENT ............................................................................................9

         Section 5.1       Management by the Board of Directors..................................................9
                           ------------------------------------
         Section 5.2       Officers.............................................................................11
                           --------
         Section 5.3       Class B Share Incentive Plan.........................................................11
                           ----------------------------
         Section 5.4       Reliance by Third Parties............................................................11
                           -------------------------
         Section 5.5       Other Business Interests.............................................................12
                           ------------------------

ARTICLE VI BOOKS AND RECORDS; TAX MATTERS.......................................................................12

         Section 6.1       Books, Records and Financial Statements..............................................12
                           ---------------------------------------
         Section 6.2       Company Audits.......................................................................12
                           --------------
         Section 6.3       Tax Matters Partner..................................................................12
                           -------------------
         Section 6.4       Taxation as Partnership..............................................................12
                           -----------------------

ARTICLE VII LIABILITY, EXCULPATION AND INDEMNIFICATION..........................................................13

         Section 7.1       Liability............................................................................13
                           ---------
         Section 7.2       Exculpation..........................................................................13
                           -----------
         Section 7.3       Indemnification......................................................................13
                           ---------------
         Section 7.4       Expenses.............................................................................14
                           --------
         Section 7.5       Insurance............................................................................14
                           ---------

ARTICLE VIII TRANSFERS OF MEMBERSHIP INTERESTS..................................................................15

         Section 8.1       Transfers of Membership Shares.......................................................15
                           ------------------------------
         Section 8.2       Managing Member Right of First Refusal...............................................16
                           --------------------------------------

ARTICLE IX DISSOLUTION, LIQUIDATION AND TERMINATION.............................................................16

         Section 9.1       Dissolution..........................................................................16
                           -----------
         Section 9.2       Liquidation..........................................................................16
                           -----------
         Section 9.3       Termination..........................................................................17
                           -----------
         Section 9.4       Claims of the Members................................................................17
                           ---------------------

ARTICLE X MISCELLANEOUS.........................................................................................17

         Section 10.1      Separability of Provisions...........................................................17
                           --------------------------
         Section 10.2      Counterparts.........................................................................17
                           ------------
         Section 10.3      Entire Agreement.....................................................................17
                           ----------------
         Section 10.4      Governing Law........................................................................17
                           -------------
         Section 10.5      Arbitration..........................................................................17
                           -----------

                                                       -ii-
<PAGE>

         Section 10.6      Remedies.............................................................................18
                           --------
         Section 10.7      No Third Party Beneficiaries.........................................................18
                           ----------------------------
         Section 10.8      Amendments...........................................................................18
                           ----------
         Section 10.9      Interpretation.......................................................................19
                           --------------
         Section 10.10     Captions.............................................................................19
                           --------
         Section 10.11     Notices. ............................................................................19
                           -------

ARTICLE XI DEFINITIONS..........................................................................................19

         Section 11.1      Certain Defined Terms.  .............................................................19
                           ---------------------

SCHEDULES

Schedule A     Names, Contact Information and Membership Shares Held by the Members
Schedule B     2003 Class B Membership Share Option Plan

</TABLE>

                                                       -iii-
<PAGE>

                LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF
                          BIORAL NUTRIENT DELIVERY, LLC

     This LIMITED LIABILITY COMPANY OPERATING AGREEMENT (this "Agreement") of
Bioral Nutrient Delivery, LLC, a Delaware limited liability company (the
"Company") is entered into as of the 8th day of January, 2003, by and among
BioDelivery Sciences International, Inc., a Delaware corporation (the "Managing
Member") and the Persons listed on Schedule A hereto, which Persons hold Class B
Shares (as defined below) in the Company (the "Class B Members" and,
collectively with the Managing Member and any future member of the Company
admitted in accordance with the provisions of this Agreement, the "Members").

     WHEREAS, the Members desire to form the Company as a limited liability
company pursuant to the Limited Liability Company Act of the State of Delaware,
6 Del. C. 18-101 et seq., as amended from time to time (the "Act"); and

     WHEREAS, the Members desire to enter into this Agreement in order to
provide for the operation and management of the Company and the rights and
obligations of the Members in connection therewith.

     NOW, THEREFORE, in consideration of the foregoing and mutual promises and
agreements herein made, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally
bound, the undersigned Members hereby agree as follows:

                                   ARTICLE I
                        FORMATION; DURATION AND PURPOSES

     Section 1.1 Name. The name of the limited liability company that is the
                 ----
subject of this Agreement shall be Bioral Nutrient Delivery, LLC. Each Member
acknowledges that the word "Bioral" is a registered trademark of the Managing
Member.

     Section 1.2 Formation.
                 ----------

     (a) Pursuant to the Act, the Members hereby form the Company. The Company's
existence will commence upon the filing of a certificate of formation of the
Company (the "Certificate") by an authorized person (as such term is used in
Section 18-201 of the Act) designated by the Managing Member (the "Organizer")
in the office of the Delaware Secretary of State. The execution and filing of
such Certificate with the Delaware Secretary of State is hereby authorized and
approved by the Members. The rights, liabilities and obligations of any Member
with respect to the Company shall be determined in accordance with the Act, the
Certificate and this Agreement. To the extent anything contained in this
Agreement modifies, supplements or otherwise affects any such right, liability,
or obligation arising under the Act, this Agreement shall supersede the Act to
the extent not restricted thereby.

     (b) The Organizer, any Officer (as defined below) and any other Person
appointed by the Board of Directors (as defined below) shall hereinafter be
authorized to cause the Company to be qualified, or registered under assumed or
fictitious name statutes or similar laws, in any jurisdiction in which the

<PAGE>

Company transacts business. Such Person, as an authorized person within the
meaning of the Act, shall execute, deliver and file any certificates (and any
amendments and/or restatements thereof) necessary or desirable for the Company
to qualify to do business in any jurisdiction in which the Company may wish to
conduct business.

     Section 1.3 Principal Business Office. The principal business office of the
                 -------------------------
Company shall be located at c/o UMDNJ - New Jersey Medical School,
Administrative Building 4, 185 South Orange Avenue, Newark, New Jersey 07103, or
at such other location as may hereafter be determined by the Board of Directors.

     Section 1.4 Registered Office and Agent. The name and address of the
                 ---------------------------
registered agent of the Company for service of process on the Company in the
State of Delaware is National Registered Agents, Inc., 9 East Loockerman Street,
Suite 1B, Dover, Delaware, 19901, County of Kent. The name of the registered
agent of the Company at such address is National Registered Agents, Inc. At any
time, the Board of Directors may designate another registered agent and/or
registered office for the Company.

     Section 1.5 Term of the Company. The term of the Company shall commence on
                 -------------------
the date of the filing of the Certificate and shall be perpetual, unless the
Company is sooner terminated and dissolved pursuant to the terms hereof. No
Member may withdraw from the Company without the prior written consent of the
other Members, other than as expressly provided in this Agreement.

     Section 1.6 Fiscal Year. The fiscal year of the Company shall end on
                 -----------
December 31st of each year.

                                   ARTICLE II
                        PURPOSE AND POWERS OF THE COMPANY

     Section 2.1 Purpose. The Company is formed for the objective and purpose
                 -------
of, and the nature of the business to be conducted and promoted by the Company
is, engaging in any lawful act or activity for which limited liability companies
may be formed under the Act as may be determined by the Managing Member and
engaging in any and all activities necessary, convenient, desirable or
incidental to the foregoing. The initial purpose of the Company is to obtain an
exclusive world-wide perpetual sub-license to the Managing Member's proprietary
encochleation drug delivery technology for non-pharmaceutical use in the
processed food and beverage industries for both human and animal consumption.

     Section 2.2 Powers. In furtherance of its purposes, the Company shall have
                 ------
the power and is hereby authorized to take any and all actions necessary,
appropriate, proper, advisable, incidental or convenient to or for the
furtherance of the purposes set forth in Section 2.1, including, but not limited
to, the power to conduct its business, carry on its operations and have and
exercise the powers granted to a limited liability company by the Act in any
state, territory, district or possession of the United States, or in any foreign
country that may be necessary, convenient or incidental to the accomplishment of
the purpose of the Company.

                                       2
<PAGE>

                                  ARTICLE III
             MEMBERS; MEMBERSIP SHARES; RIGHTS DISTRIBUTION PROGRAM

     Section 3.1 Membership Shares.
                  -----------------

     (a) Generally. The limited liability company interests of the Company shall
         ---------
be classified in two classes of shares (each such interest in the Company, a
"Membership Share" and collectively, the "Membership Shares"): Class A
Membership Shares (each, a "Class A Share" and collectively, the "Class A
Shares") and Class B Membership Shares (each, a "Class B Share" and
collectively, the "Class B Shares"). There shall be no limitation on the number
of Membership Shares which may be issued and/or outstanding at any time, subject
to the approval of the Board of Directors as to the timing of any such issuance
and amount thereof.

     (b) Class A Shares. The Class A Shares will be held only by the Managing
         --------------
Member and will grant the Managing Member the management and governance rights
contained in this Agreement. The Managing Member, as a holder of Class A Shares,
will be entitled to its pro rata portion (based on its Percentage Interests) of
distributions declared and paid by the Board of Directors.

     (c) Class B Shares. The Class B Shares will be held by the Managing Member
         --------------
and the Class B Members in accordance with the provisions of this Agreement. The
Class B Members will have no management, governance or approval rights
whatsoever relating to the business and operations of the Company. Each Class B
Member will be entitled to its pro rata portion (based on its Percentage
Interests) of distributions declared and paid by the Board of Directors.

     (d) Other Securities. The Board of Directors is authorized to issue
         ----------------
additional Membership Shares, or any other class or type of debt or equity
securities of the Company (including options, warrants or rights to receive
Class B Shares or any other class or type of debt or equity securities of the
Company, including convertible securities) that the Board of Directors
designates, at such times and on such terms as the Board of Directors
determines. Any such action shall be memorialized, as applicable, in an
amendment and/or restatement to this Agreement executed by the Managing Member.

     (e) Inclusions to "Membership Shares." For purposes of this Agreement, a
         --------------------------------
Member's aggregate "Membership Shares" shall include the entire ownership
interest of a Member in the Company at any time, including (a) the rights of
such Member to any and all benefits to which a Member may be entitled as
provided in this Agreement, together with the obligations of such Member to
comply with all the terms and provisions of this Agreement, (b) all income,
profits, Available Net Cash, fees or payments of whatever nature and all
distributions to which any Member would be entitled, now or at any time
hereafter, of whatsoever description or character; and (c) all of any Member's
present and future rights to and in its Capital Account, whether by way of
liquidating distributions or otherwise, and all of such Member's right to
receive or share in any surplus of the Company in the event of the dissolution
of the Company.

                                       3
<PAGE>

     Section 3.2 Percentage Interest. A Member's percentage interest of the
                 -------------------
outstanding Membership Shares (the "Percentage Interest") shall be calculated by
dividing the number of Membership Shares held by such Member (regardless of
class) by the aggregate number of Membership Shares outstanding (regardless of
class). The number and class of Membership Shares and the resulting Percentage
Interest of the Members is reflected on Exhibit A hereto. Exhibit A hereto shall
                                        ---------         ---------
be amended from time to time to reflect the issuance of additional Membership
Shares and the admission of new Members, in each case in accordance with the
provisions of this Agreement.

     Section 3.3 Capital Contributions. No Member shall be obligated to make
                 ---------------------
contributions of cash or other property to the Company (each, a "Capital
Contribution"). A Member may make a Capital Contribution or loan funds to the
Company with the prior written consent of the Managing Member, which consent may
be granted or withheld in the sole discretion of the Managing Member, for any
reason or no reason.

     Section 3.4 Partition. Each Member waives any and all rights that it may
                 ---------
have to maintain an action for partition of the Company's property.

     Section 3.5 No Interest on Capital. No Member shall be entitled to any
                 ----------------------
interest on any capital, if any, contributed by it to the Company.

     Section 3.6 Withdrawal.
                 ----------

     (a) Except in connection with a Transfer to a Permitted Transferee (each as
defined in Section 8.1 below) or a Transfer to which the Managing Member
consents pursuant to Section 8.1 hereof in which the transferee has been
admitted as a Substitute Member (as defined below) and has assumed the
obligations of a Member or as otherwise described herein, no Member shall have
the right to withdraw from the Company without the prior written consent of the
Managing Member (which consent may be withheld in Managing Member's sole
discretion, for any reason or no reason). Effective on the date of a permitted
withdrawal, such withdrawing Member shall be deemed to have withdrawn from the
Company and shall no longer be a Member for purposes of this Agreement. From and
after the effective date of such withdrawal, the withdrawing Member shall not be
entitled to receive any distributions from the Company unless the withdrawing
Member was a Member on the record date therefor.

     (b) If a Member withdraws from the Company in violation of Section 3.6(a),
such Member shall not be entitled to any distribution or payment with respect to
his, her or its Membership Shares in the Company and shall be liable to the
Company for breach of this Agreement.

     Section 3.7 Rights Distribution Program.
                 ---------------------------

     (a) As of the date hereof, the Managing Member holds 8,600,000 Class B
Shares and has the right to acquire, from time to time in the future, 4,000,000
Class B Shares underlying the MM Option (as defined in Section 3.10 below) (such
12,600,000 Class B Shares, collectively, the "MM Class B Shares").
Notwithstanding any provision of this Agreement to the contrary (and assuming
the exercise, from time to time, of the MM Option as provided for herein), the
MM Class B Shares will be available to be distributed by the Managing Member to

                                       4
<PAGE>

current and/or future stockholders of the Managing Member upon the exercise of
Rights (as defined below), including, upon the exercise of such instruments,
holders of the Managing Member's Class A warrants and holders of options
entitling such holders to purchase shares of the Managing Member's common stock.

     (b) The Managing Member shall have the right, from time to time and on such
terms as the Managing Member may determine in its sole discretion, to distribute
as a dividend to its stockholders rights ("Rights") to purchase MM Class B
Shares held by the Managing Member. At the request of the Managing Member, the
Company shall register both the Rights and Class B Shares issuable upon the
exercise thereof (in this context, collectively, the "Registrable Securities")
with the Securities and Exchange Commission ("SEC") under the Securities Act of
1933, as amended (together with the rules and regulations promulgated
thereunder, the "Securities Act"), it being understood and agreed that neither
the MM Class B Shares nor any other debt or equity securities of the Company
shall, without the approval of the Managing Member in its sole discretion, be
listed on any public market or exchange.

     (c) The Members agree that, in connection with any such registration of the
Registrable Securities under the Securities Act, the Company shall:

          (i) File with the SEC a registration statement with respect to such
     Registrable Securities (a "Registration Statement") and use its reasonable
     best efforts to cause that Registration Statement to become effective as
     soon as possible;

          (ii) When required by the Managing Member, and as expeditiously as
     possible, prepare and file with the SEC any amendments and supplements to
     the Registration Statement and the prospectus included in the Registration
     Statement (the "Prospectus") as may be necessary to comply in all material
     respects with the provisions of the Securities Act (including the
     anti-fraud provisions thereof) and to keep the Registration Statement
     effective for so long as the Managing Member may require;

          (iii) When required by the Managing Member, and as expeditiously as
     possible, furnish to the Managing Member such reasonable numbers of copies
     of the Prospectus, including any preliminary prospectus, in conformity with
     the requirements of the Securities Act, and such other documents as the
     Managing Member may reasonably request in order to facilitate the public
     distribution or sale of the Registrable Securities owned by the Managing
     Member;

          (iv) As expeditiously as possible, use its best efforts to register or
     qualify the Registrable Securities covered by the Registration Statement
     under the securities or Blue Sky laws of such states as the Managing Member
     shall reasonably request, and do any and all other acts and things that may
     be necessary or desirable to enable the Managing Member to facilitate the
     public distribution or sale of the Registrable Securities owned by the
     Managing Member;

          (v) Promptly provide a transfer agent and registrar for all such
     Registrable Securities not later than the effective date of such
     Registration Statement;

                                       5
<PAGE>

          (vi) As expeditiously as possible following the effectiveness of such
     Registration Statement, notify the Managing Member of any request by the
     SEC for the amending or supplementing of such Registration Statement or
     prospectus;

          (vii) Use its reasonable best efforts to obtain the lifting of any
     stop order that might be issued suspending the effectiveness of such
     Registration Statement at the earliest possible moment; and

          (viii) Use its reasonable best efforts to file with the SEC in a
     timely manner all reports and other documents required of the Company under
     the Securities Act and the Securities Exchange Act of 1934, as amended (at
     any time after it has become subject to such reporting requirements).

     Section 3.8 Substitute and Additional Members
                 ---------------------------------

     (a) Additional members may be admitted to the Company (the "Additional
Members") upon the issuance of Membership Shares to such Additional Members,
including, without limitation, upon the exercise on any Rights as contemplated
by Section 3.7 hereof. No Additional Member and no Person who is the transferee
or assignee of all or a portion of the Membership Shares of a Member (a
"Substitute Member") shall be entitled to any of the rights and benefits under
this Agreement of the transferor or assignor of such interest (other than the
right to distributions) unless and until:

          (i) the Additional Member or the Substitute Member, as the case may
     be, shall execute and acknowledge any instrument reasonably deemed by the
     Managing Member to be necessary to effectuate such admission, which
     instrument shall include representations that such Additional Member or
     Substitute Member or their Affiliates is not a Prohibited Owner; and

          (ii) the Additional Member or the Substitute Member, as the case may
     be, shall accept and assume in writing (in a form determined by the Board
     of Directors) all of the terms, conditions and obligations of this
     Agreement applicable to the Membership Shares being acquired by it.

     (b) As promptly as is reasonably practicable after the admission of an
Additional Member or a Substitute Member in the Company, the Managing Member or
its designee shall amend this Agreement (including Schedule A annexed hereto) to
reflect the addition of the Additional Member, or the addition of the Substitute
Member and the deletion of the Member substituted therefor, and to set forth the
respective designations, preferences and rights, as established by the Managing
Member, of the Membership Shares of such Additional Member or Substitute Member.
The Managing Member shall cause any such amendment to be dated and effective as
of the date upon which any such Additional Member or Substitute Member first
acquired the Membership Shares in question.

     Section 3.9 Company Reorganization. If the Managing Member, in its sole
                 ----------------------
discretion, determines that conditions are favorable for the Company to
reorganize as a corporation, the Company may be reorganized as a corporation
and, in connection therewith, its equity interests (including but not limited to
the Class B Shares) may be reclassified as shares of stock (or securities

                                       6
<PAGE>

convertible into, or options to purchase, such shares of stock) in such
corporation on such terms and conditions as are approved by the Managing Member,
provided that the relative rights and preferences of the Class B Shares shall
not be materially modified. Each Member (including the Class B Members) or other
direct or indirect holder of Membership Shares will be required to execute and
deliver such instruments or documents as may be necessary or advisable in
connection with any such reorganization.

     Section 3.10 MM Option.
                  ---------

     (a) The Company hereby grants to the Managing Member an option (the "MM
Option") to purchase, in whole or in part, and from time to time in any amounts,
for the period beginning January 8, 2003 and ending January 8, 2008 (the "Option
Period"), an aggregate of 4,000,000 Class B Shares at a purchase price
throughout the Option Period of $0.01 per Class B Share.

     (b) The MM Option shall be exercised by the Managing Member by giving
written notice thereof to the Company, which notice shall state the amount of
Class B Shares desired to be acquired by the Managing Member and the aggregate
purchase price for such Class B Shares. In connection with each exercise of the
MM Option during the Option Period, the Managing Member shall tender to the
Company the aggregate purchase price for the Class B Shares acquired no later
than five (5) days following its delivery of the written notice contemplated by
this Section 3.10(b).

     (c) Upon payment by the Managing Member for the applicable Class B Shares,
an appropriate amendment to Schedule A hereto shall be made reflecting the
number of Class B Shares issued to the Managing Member and the resulting changes
to the Percentage Interests of each Member. The Managing Member shall not be
entitled to any preferential return on any capital contributed by it to the
Company in connection with the exercise or exercises of the MM Option and shall
only be entitled to a pro rata increase in its Percentage Interest.

                                   ARTICLE IV
                  ALLOCATION OF PROFITS AND LOSS; DISTRIBUTIONS

     Section 4.1 Allocation of Profits and Loss.
                 ------------------------------

     (a) Profits. Profits shall be allocated:
         -------

          (i) First to each Member in an amount equal to the Loss allocated to
     such Member pursuant to Section 4.1(b)(ii) hereof, then

          (ii) Second, to each Member in an amount equal to the Loss allocated
     to such Member pursuant to Section 4.1(b)(i) hereof, then

          (iii) Third, to the Members pro rata in proportion to their respective
     Percentage Interests.

     (b) Loss. Loss shall be allocated:
         ----

                                       7
<PAGE>

          (i) First, among Members with positive Capital Account balances, until
     such balances have been reduced to zero, and then

          (ii) Second, to the Members, pro rata in proportion to their
     respective Percentage Interests.

     Section 4.2 Distributions. Available Net Cash, if available, shall be
                 -------------
distributed by the Company at such time and in such amounts as shall be approved
by the Board of Directors, in its sole and absolute discretion, in the following
order of priority:

     (a) First, to each Member, an amount sufficient for such Member to pay his,
her or its federal income taxes, if any, in respect of their share of the
Profits (as defined below) of the Company (in excess of prior allocations to
each Member of Loss (as defined below) of the Company), based on the highest
applicable federal income tax rate on individuals in effect at the time that
Profits are allocated to the Members; and

     (b) Thereafter, to the Members, pro rata in proportion to their respective
Percentage Interests. Distributions to which a Member is entitled pursuant to
this Section 4.2(b) shall be reduced by any distributions which such Member
received pursuant to Section 4.2(a) above.

     Section 4.3 Capital Accounts. The Board of Directors shall establish and
                 ----------------
maintain capital accounts ("Capital Account") for each Member. Capital Accounts
shall be maintained in accordance with Treasury Regulation ss.1.704-1(b)(2)(iv)
and shall be interpreted and applied in a manner consistent therewith. If the
Board of Directors shall determine that it is prudent to modify the manner in
which the Capital Accounts are computed in order to comply with Treasury
Regulation ss.1.704-1(b)(2)(iv), the Board of Directors may make such
modification.

     Section 4.4 Book/Tax Disparities; Section 754 Elections; etc.
                 -------------------------------------------------

     (a) In the case of contributed property, items of income, gain, loss,
deduction and credit, as determined for federal income tax purposes, shall be
allocated in a manner consistent with the principles of Section 704(c) of the
Code by using a method described in Treasury Regulation ss.1.704-3(d) selected
by the Board of Directors, in its sole discretion, to take into account the
difference between the agreed value of such property and its adjusted tax basis
at the time of contribution or adjustment, as the case may be.

     (b) All items of income, gain, loss, deduction and credit recognized by the
Company for federal income tax purposes and allocated to the Members in
accordance with the provisions hereof shall be determined without regard to any
election under Section 754 of the Code which may be made by Board of Directors
on behalf of the Company; provided, however, that such allocations, once made,
shall be adjusted as necessary or appropriate to take into account those
adjustments permitted by Section 734 and 743 of the Code.

                                       8
<PAGE>

     Section 4.5 Certain Tax-Related Definitions.
                 -------------------------------

     (a) For purposes of this Agreement, the terms "Profit" or "Loss" mean, for
each fiscal year or other period, an amount equal to the Company's net taxable
income or loss for such 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), adjusted as follows: (i) any
income of the Company that is exempt from federal income tax and not otherwise
taken into account in computing Profit or 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 described in such Section pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(i) and not otherwise taken into
account in computing Profit or Loss, shall be subtracted from such taxable
income or loss; and (iii) in the event the Carrying Value (as defined below) of
any Company property is adjusted pursuant to Section 1.704-1(b)(2)(iv)(f) of the
Treasury Regulations or other pertinent sections of such Treasury Regulations,
the amount of such adjustment shall be taken into account for purposes of
computing Profit and Loss. Notwithstanding any other provisions, any items which
are specially allocated pursuant to Section 4.6 shall not be taken into account
in computing Profit or Loss.

     (b) For purposes of computing Profit and Loss, the term "Carrying Value"
shall mean (A) with respect to contributed property, the agreed value of such
property, (B) with respect to property the book value of which is adjusted
pursuant to Treasury Regulation ss. 1.704-1(b)(2)(iv)(d), (e) or (f), the amount
determined by the Board of Directors, and (C) with respect to any other
property, the adjusted basis of such property for federal income tax purposes as
of the time of determination.

     Section 4.6 Regulatory Allocations, Qualified Income Offset and Minimum
                 -----------------------------------------------------------
Gain Chargebacks. The provisions of this Agreement are intended to comply with
----------------
Code Section 704 and Treasury Regulations ss.ss. 1.704-1(b) and 1.704-2 and
shall be interpreted and applied in a manner consistent with such Section and
such Regulations. Notwithstanding anything to the contrary in this Agreement,
the Members shall make such allocations as may be required in order to comply
with Code Section 704 and Treasury Regulations ss.ss. 1.704-1(b) and 1.704-2
including any allocations necessary to satisfy the requirements for (i) a
"qualified income offset"; (ii) a "minimum gain chargeback"; and (iii) a
chargeback of "minimum gain attributable to partner nonrecourse debt" as such
terms are defined in Treasury Regulation ss.ss. 1.704-1(b) and 1.704-2.

                                   ARTICLE V
                                   MANAGEMENT

     Section 5.1 Management by the Board of Directors.
                 ------------------------------------

     (a) Powers. Subject to the oversight by the Managing Member and the other
         ------
rights of the Managing Member contained in this Agreement, the management and
control of the business and affairs of the Company shall be vested in a board of
directors (the "Board of Directors"), which shall have the power to do any and
all acts necessary, convenient or incidental to or for the furtherance of the
purposes of the Company, including all powers provided for in this Agreement,
the Act or otherwise. Any Officer or employee of the Company authorized by the

                                       9
<PAGE>

Board of Directors shall have the authority to bind the Company. Without
limiting the generality of the foregoing, the Board of Directors shall establish
overall policies for the Company, set long-range plans and objectives and direct
the conduct of the Company's Officers and employees. No action shall be taken,
sum expended, decision made or obligation incurred by the Company with respect
to any matter regarding the Company unless such matter has been expressly
approved by the Board of Directors as provided for herein.

     (b) Composition. The Board of Directors shall consist of six (6)
         -----------
individuals (each, a "Director" and collectively, the "Directors"), each of whom
shall be appointed from time to time by the Managing Member and shall serve at
the pleasure of the Managing Member. The Managing Member shall have the right to
remove any Director or all Directors at any time, with or without cause. Any
vacancy existing on the Board of Directors shall be filled by the Managing
Member. The initial Directors shall be Susan G. Bonitz, Ph.D., Mauro Bove,
Christopher Chapman, M.D., Susan Gould-Fogerite, Ph.D., Francis E. O'Donnell,
Jr., M.D. and L.M. Stephenson, M.D.

     (c) Meetings. The Board of Directors shall meet no less frequently than
         --------
quarterly and additionally at the request of the Managing Member, such request
to be made upon no less than three (3) business days notice by telephone, e-mail
or facsimile transmission, which notice may be waived in each instance. Each
such meeting shall be held at such date, time and place as the Managing Member
may determine. One or more Directors may participate in any meeting of the Board
via telephone conference call or other electronic device by which all Directors
may hear such Directors. A Director may attend a meeting by proxy, provided that
his proxyholder presents a written proxy at the meeting which empowers the
proxyholder to take any action that the Director could take if personally
present. A proxyholder must be another Director.

     (d) Voting and other Actions. Each Director shall have one vote and may
         ------------------------
also cast one vote on behalf of any Director for whom he or she holds a proxy.
All actions of the Board shall require the affirmative vote of a majority of the
Directors. No Director shall be liable to the Company or to the Managing Member
for any loss or damage sustained by the Company or the Managing Member, unless
the loss or damage shall have been the result of fraud, deceit, or intentional
misconduct.

     (e) Action by Written Consent Without a Meeting. Any action that may be
         -------------------------------------------
taken at a meeting of the Board of Directors may be taken without a meeting if a
consent in writing setting forth the action so taken is signed by the required
number of Directors or by the Managing Member, as applicable. All such consents
shall be filed with the minutes of the Company and shall be maintained in the
Company records.

     (f) Compensation. Except as determined and approved by the Managing Member
         ------------
or as provided for in Section 5.3 hereof, Directors shall not be entitled to
compensation for acting as such, provided that a Director shall be reimbursed by
the Company for reasonable out-of-pocket expenses incurred to attend meetings of
the Board of Directors.

     (g) Agency. No Director is an agent of the Company, nor can a Director
         ------
bind, or execute any instrument on behalf of, the Company.

                                       10
<PAGE>

     Section 5.2 Officers.
                 --------

     (a) Generally. The day-to-day operations of the Company shall be under the
         ---------
control of the officers of the Company duly appointed from time to time by the
Board of Directors and subject to the supervision and direction of the Board of
Directors (the "Officers"). The Officers of the Company shall include a
president or chief executive officer, a secretary and a chief financial officer
or treasurer and may include a chief operating officer, one or more vice
presidents and such other Officers as the Board of Directors may from time to
time consider appropriate. Such Officers shall exercise such duties as
customarily pertain to such offices as determined by the Board of Directors.

     (b) Appointment. The Officers of the Company appointed by the Board of
         -----------
Directors shall hold office until their successors are chosen by the Board of
Directors. Any Officer may be removed at any time by the Board of Directors. Any
vacancy occurring in any office of the Company shall be filled by the Board of
Directors.

     (c) Compensation. Except as determined and approved by the Managing Member
         ------------
or as provided for in Section 5.3 hereof, Officers shall not be entitled to
compensation for acting as such during the first twelve (12) months following
the formation of the Company, provided that Officers shall be reimbursed by the
Company for reasonable out-of-pocket expenses incurred in connection with the
duties assigned to them by the Board of Directors. Promptly following the one
(1) year anniversary of the formation of the Company, the Board of Directors
shall determine and agree with each Officer on a reasonable amount of
compensation for services rendered or to be rendered to the Company.

     (d) The initial Officers of the Company shall be as follows: Francis E.
O'Donnell, Jr., Chief Executive Officer and President; and James A. McNulty,
Secretary, Treasurer and Chief Financial Officer.

     Section 5.3 Class B Share Incentive Plan. The Managing Member hereby
                 ----------------------------
establishes the 2003 Class B Share Option Plan for the Company, a copy of which
is attached hereto as Schedule B (the "Option Plan"). Pursuant to the Option
Plan, the Company may issue to Directors and Officers of the Company and third
party individuals or entities providing services to the Company ("Consultants")
options to purchase up to an aggregate of no more than 1,000,000 Class B Shares.
The Option Plan shall be administered by the Board of Directors pursuant to the
terms of the Option Plan.

     Section 5.4 Reliance by Third Parties. Any Person dealing with the Company,
                 -------------------------
the Directors or any Officer or employee of the Company may rely upon a
certificate signed by the Managing Member as to:

     (a) the identity of any of the Managing Member, any Director or Officer;

     (b) the persons who are authorized to execute and deliver any instrument or
document on behalf of the Company; or

     (c) any act or failure to act by the Company or as to any other matter
whatsoever involving the Company.

                                       11
<PAGE>

     Section 5.5 Other Business Interests. Any Member, Director or Officer, or
                 ------------------------
any Affiliate of any Member, may engage in or possess an interest in other
business ventures of every kind and description, independently or with others,
and may dedicate such time to such ventures as such Persons deem, in their
discretion, necessary. None of the Company or the other Members shall have any
rights in or to such ventures or the income or profits therefrom by virtue of
this Agreement. Without limiting the generality of the foregoing, the Members
acknowledge that (i) Francis E. O'Donnell, a Director and the initial President
and Chief Executive Officer of the Company, is also Chairman, President and
Chief Executive Officer of the Managing Member as well as the managing director
of The Hopkins Capital Group, a group of affiliated of entities engaged in
business development activities, and (ii) James A. McNulty, the initial
Secretary, Treasurer and Chief Financial Officer of the Company, is also the
Secretary, Treasurer and Chief Financial Officer of the Managing Member.

                                   ARTICLE VI
                         BOOKS AND RECORDS; TAX MATTERS

     Section 6.1 Books, Records and Financial Statements. At all times during
                 ---------------------------------------
the continuance of the Company, the Company shall maintain, at its principal
place of business, separate books of account for the Company that shall show a
true and accurate record of all costs and expenses incurred, all charges made,
all credits made and received and all income derived in connection with the
operation of the Company's business. Such books of account, together with a
certified copy of this Agreement (including any amendments and/or restatements
hereof)and of the Certificate, shall at all times be maintained at the principal
place of business of the Company and shall be open to inspection and examination
at reasonable times by each Member and its duly authorized representative for
any purpose reasonably related to such Member's interest in the Company.

     Section 6.2 Company Audits. At any time at the sole discretion of the Board
                 --------------
of Directors, the financial statements of the Company may be audited by an
independent certified public accountant, selected by the Board of Directors,
with such audit to be accompanied by a report of such accountant containing its
opinion. The cost of such audit will be an expense of the Company. A copy of any
such audited financial statements and accountant's reports will be made
available for inspection by the Members.

     Section 6.3 Tax Matters Partner. The Managing Member is hereby designated
                 -------------------
as "Tax Matters Partner" of the Company for purposes of ss.6231(a)(7) of the
Code and shall have the power to manage and control, on behalf of the Company,
any administrative proceeding at the Company level with the Internal Revenue
Service relating to the determination of any item of Company income, gain, loss,
deduction or credit for federal income tax purposes.

     Section 6.4 Taxation as Partnership. The Company shall be treated as a
                 -----------------------
partnership for U.S. federal income tax purposes.

                                       12
<PAGE>

                                  ARTICLE VII
                   LIABILITY, EXCULPATION AND INDEMNIFICATION

     Section 7.1 Liability.
                 ---------

     (a) Except as otherwise provided by the Act, 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 the
Organizer, the Members, the Directors, the Officers and the employees of the
Company (each a "Covered Person" and collectively "Covered Persons") shall not
be obligated personally for any such debt, obligation or liability of the
Company solely by reason of being a Covered Person.

     (b) Except as otherwise expressly required by law, a Member, in its
capacity as a Member of the Company, shall have no liability in excess of (i)
the amount of its Capital Contributions, (ii) its share of any assets and
undistributed profits of the Company and (iii) the amount of any distributions
wrongfully distributed to it.

     Section 7.2 Exculpation.
                 -----------

     (a) No Covered Person shall be liable to the Company, any Member or any
other Person who has an interest in the Company for any loss, damage or claim
incurred by reason of any act or omission performed or omitted by such Covered
Person in good faith in connection with the formation of the Company or on
behalf of the Company and in a manner reasonably believed to be within the scope
of the authority conferred on such Covered Person by this Agreement, except that
a Covered Person shall be liable for any such loss, damage or claim incurred by
reason of such Covered Person's gross negligence or willful misconduct.

     (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 or the Board of Directors by any Person as
to matters the Covered Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Company, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses or any other facts pertinent to the existence and amount of assets from
which distributions to Members might properly be paid.

     Section 7.3 Indemnification.
                 ---------------

     (a) Covered Persons. To the full extent permitted by applicable law, each
         ---------------
Covered Person shall be entitled to indemnification from the Company for any
loss, damage or claim incurred by such Covered Person by reason of any act or
omission performed or omitted by such Covered Person in good faith on behalf of
the Company and in a manner reasonably believed to be within the scope of the
authority conferred on such Covered Person by this Agreement, except that no
Covered Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Covered Person by reason of gross negligence or
willful misconduct with respect to such acts or omissions; provided, however,
that any indemnity under this Section 7.3 shall be provided out of and to the
extent of Company assets only, and no Member shall have personal liability on
account thereof.

                                       12
<PAGE>

     (b) Notice of Claims. Any Covered Person seeking indemnification hereunder
         ----------------
(an "Indemnitee") shall promptly, and within 30 days after notice to it (notice
to Indemnitee being the filing of any action, receipt of any claim in writing or
similar form of actual notice) of any claim as to which it asserts a right to
indemnification, notify the party from whom indemnification is sought (an
"Indemnitor") of such claim. Indemnitee shall bill Indemnitor for any such
claims no more frequently than on a monthly basis, and Indemnitor shall promptly
pay (or cause to be paid) Indemnitee upon receipt of any such bill. The failure
of Indemnitee to give the notification to Indemnitor contemplated above in this
Section 7.3(b) shall not relieve Indemnitor from any liability or obligation
that it may have pursuant to this Agreement unless the failure to give such
notice within such time shall have been materially prejudicial to it, and in no
event shall the failure to give such notification relieve Indemnitor from any
liability it may have other than pursuant to this Agreement.

     (c) Third Party Claims. If any claim for indemnification by Indemnitee
         ------------------
arises out of an action or claim by a Person other than Indemnitee, Indemnitor
may, by written notice to Indemnitee, undertake to conduct the defense thereof
and to take all other steps or proceedings to defeat or compromise any such
action or claim, including the employment of counsel; provided, that Indemnitor
shall reasonably consider the advice of Indemnitee as to the defense or
compromise of such actions and claims, and Indemnitee shall have the right to
participate, at its own expense, in such proceedings, but control of such
proceedings shall remain exclusively with Indemnitor. Indemnitee shall provide
all reasonable cooperation to Indemnitor in connection with such proceedings.
Counsel and auditor costs and expenses and court costs and fees of all
proceedings with respect to any such action or claim shall be borne by
Indemnitor. If any such claim is made hereunder and Indemnitor does not elect to
undertake the defense thereof by written notice to Indemnitee, Indemnitee shall
be entitled to control such proceedings and shall be entitled to indemnity with
respect thereto pursuant to the terms of this Section 7.3(b). To the extent that
Indemnitor undertakes the defense of such claim by written notice to Indemnitee
and diligently pursues such defense at its expense, Indemnitee shall be entitled
to indemnification hereunder only to the extent that such defense is
unsuccessful as determined by a final judgment of a court of competent
jurisdiction, or by written acknowledgment of the parties.

     Section 7.4 Expenses. To the fullest extent permitted by applicable law,
                 --------
expenses (including legal fees) incurred by a Covered Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be advanced
by the Company prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the Company of an undertaking by or on behalf
of the Covered Person to repay such amount if it shall be determined that the
Covered Person is not entitled to be indemnified as authorized in Section 7.3
hereof.

     Section 7.5 Insurance. The Company may purchase and maintain insurance, to
                 ---------
the extent and in such amounts as the Board of Directors shall, in its sole
discretion, deem reasonable, on behalf of Covered Persons and such other persons
as the Board of Directors shall determine, against any liability that may be
asserted against or expenses that may be incurred by any person in connection
with the activities of the Company or such indemnities, regardless of whether
the Company would have the power to indemnify such person against such liability
under the provisions of this Agreement. The Company may enter into indemnity
contracts with Covered Persons and such other Persons as the Board of Directors
shall determine and adopt written procedures pursuant to which arrangements are
made for the advancement of expenses and the funding of obligations under
Section 7.4 hereof and containing such other procedures regarding
indemnification as are appropriate.

                                       14
<PAGE>

                                  ARTICLE VIII
                        TRANSFERS OF MEMBERSHIP INTERESTS

     Section 8.1 Transfers of Membership Shares.
                 ------------------------------

     (a) Generally.
         ---------

          (i) Except as contemplated by Section 3.7 hereof, no Member or
     Securityholder may, at any time, directly or indirectly, assign, transfer,
     sell, exchange, syndicate, lien, encumber, pledge, or hypothecate
     (collectively, a "Transfer") all or any portion of its Membership Shares,
     or any direct or indirect beneficial or equity interest therein, or in the
     Company (collectively, "Equity Interests") to any Person without the prior
     written consent of the Managing Member, which consent may be granted or
     withheld in the Managing Member's sole discretion, for any reason or no
     reason; provided, however, that any Member or Securityholder who is an
     individual may Transfer all or any portion of such Equity Interest to any
     Permitted Transferee without such prior approval.

          (ii) Any individual Member or Securityholder making such Transfer to a
     Permitted Transferee shall provide written notice thereof to the Managing
     Member within ten (10) days of the Applicable Transfer. It is agreed that
     failure to provide such notice to the Managing Member shall make the
     purported Transfer to the Permitted Transferee void ab initio.

          (iii) With respect to Transfers other than Permitted Transfers, the
     Managing Member may condition its approval of any proposed Transfer of
     Membership Shares upon its receipt from the Member proposing to make such
     Transfer (the "Transferring Member") of a written notice to the Managing
     Member (a "Transfer Notice") detailing all of the material terms of such
     proposed Transfer, including the name of proposed third party transferee or
     lender and the economic benefit to be derived by the Transferring Member
     from such transaction.

          (iv) If a Class B Member Transfers all or any portion of its
     Membership Shares to a Permitted Transferee or with the consent of the
     Managing Member as provided for above, the transferee may be admitted to
     the Company as a Substitute Member in accordance with Section 3.8 hereof.
     If a Transfer of Membership Shares is made in accordance with the
     provisions of this Section 8.1, the Managing Member shall amend Schedule A
     hereto to record the admission of the Additional Member.

     (b) Override on Transfers. Notwithstanding the fact that a Transfer may be
         ---------------------
(or may have been effected) to a Permitted Transferee or may have been approved
by the Managing Member pursuant to this Section 8.1, no Transfer of Membership
Shares shall be permitted if such Transfer (i) violates any applicable law,
including federal or state securities laws or regulations, (ii) causes the
Company to be treated as a "publicly traded partnership" for tax purposes or

                                       15
<PAGE>

(iii) would constitute a Transfer of a Membership Share to a Prohibited Owner,
in which case any such purported Transfer shall be void ab initio.

     Section 8.2 Managing Member Right of First Refusal. In the event that a
                 --------------------------------------
Transferring Member is proposing to sell or assign all or any portion of its
Membership Shares to any Person, such Transferring Member shall deliver a
Transfer Notice to the Managing Member no later than thirty (30) days prior to
the contemplated closing of such sale or assignment. For a period of thirty (30)
days following receipt its receipt of such Transfer Notice, the Managing Member
may exercise a right to purchase all or a portion of the Membership Shares
described in such Transfer Notice on the same terms and conditions as set forth
therein. Managing Member's purchase right shall be exercised by written notice
signed by the Managing Member (the "Managing Member Notice") and delivered to
such Transferring Member. The Managing Member shall effect the purchase of the
Transferring Member's Membership Shares, including payment of the purchase
price, not more than thirty (30) days after delivery of the Managing Member
Notice, and at such time the Transferring Member shall sell to the Company the
Membership Shares free and clear of any liens or encumbrances and shall execute
such documentation as the Managing Member may reasonably propose in connection
with such sale. Upon the purchase by the Managing Member of Membership Shares
pursuant to this Section 8.2, such Membership Shares shall be owned for all
purposes by the Managing Member (who may make such acquired Membership Shares
available for issuance pursuant to Section 3.7 hereof) and the resulting
Percentage Interests of the remaining Members shall be amended accordingly.

                                   ARTICLE IX
                    DISSOLUTION, LIQUIDATION AND TERMINATION

     Section 9.1 Dissolution.
                 -----------

          (a) The Company shall dissolve, and its affairs shall be wound up,
     only upon the written consent of the Managing Member.

          (b) The Company shall not be dissolved by the admission of Additional
     Members or Substitute Members in accordance with the terms of this
     Agreement.

     Section 9.2 Liquidation. Upon dissolution of the Company, the Managing
                 -----------
Member shall carry out the winding up of the Company and shall immediately
commence to wind up the Company's affairs; provided, however, that (i) the
Managing Member shall have all of the powers set forth in Section 18-803(b) of
the Act during the period of the winding up of the Company's affairs and (ii) a
reasonable time shall be allowed for the orderly liquidation of the assets of
the Company and the satisfaction of liabilities to creditors so as to enable the
Managing Member to minimize the normal losses attendant upon a liquidation. The
Members shall continue to share in profits and losses of the Company during
liquidation in the same proportions, as specified in Section 4.1 hereof, as
before liquidation, provided that allocations of profits, losses and items
thereof shall be made in a manner that results in the capital account balance
(as described in Treasury Regulation 1.704-1(b)) of each Member is equal to the
distribution to be made to such Member pursuant to Section 9.3(c). The proceeds
of liquidation shall be distributed in the following order and priority:

                                       16
<PAGE>

          (a) first, to creditors of the Company, including Members who are
     creditors, to the extent otherwise permitted by law, in satisfaction of the
     liabilities of the Company (whether by payment or the making of reasonable
     provision for payment thereof); and

          (b) thereafter, to the Members, pro rata in proportion to their
     respective Percentage Interests.

     Section 9.3 Termination. The Company shall terminate when all of the assets
                 -----------
of the Company, after payment of or due provision for all debts, liabilities and
obligations of the Company, shall have been distributed to the Members in the
manner provided for in this Article IX and the certificate of formation shall
have been canceled in the manner required by the Act.

     Section 9.4 Claims of the Members. Upon dissolution of the Company, the
                 ---------------------
Members shall look solely to the Company's assets for the return of their
capital contributions, and if the assets of the Company remaining after payment
of or due provision for all debts, liabilities and obligations of the Company
are insufficient to return such capital contributions, the Members shall have no
recourse against the Company or any other Member.

                                   ARTICLE X
                                  MISCELLANEOUS

     Section 10.1 Separability of Provisions. Each provision of this Agreement
                  --------------------------
shall be considered separable and if for any reason any provision or provisions
herein are determined to be invalid, unenforceable or illegal under any existing
or future law, such invalidity, unenforceability or illegality shall not impair
the operation of or affect those portions of this Agreement which are valid,
enforceable and legal.

     Section 10.2 Counterparts. This Agreement and any amendment or joinder
                  ------------
hereto may be executed in any number of counterparts and by facsimile, each of
which, when taken together, shall be deemed an original of this Agreement and
one and the same Agreement.

     Section 10.3 Entire Agreement. This Agreement constitutes the entire
                  ----------------
agreement between the parties hereto with respect to the subject matter hereof,
and supersedes all prior understandings or agreements between the parties.

     Section 10.4 Governing Law. This Agreement shall be governed by, and
                  -------------
construed under, the laws of the State of Delaware (without regard to the
conflict of laws principles of such State).

     Section 10.5 Arbitration.
                  -----------

          (a) Any controversy, claim, or dispute arising out of or relating to
     this Agreement, including any alleged breach or threatened breach of the
     provisions contained in this Agreement, will, upon demand of a party to the
     controversy, claim, or dispute, be resolved timely by arbitration held in
     New York, New York, and administered by the American Arbitration
     Association ("AAA") in accordance with the Commercial Arbitration Rules of
     the AAA and, to the maximum extent applicable, pursuant to the Federal
     Arbitration Act, 9 U.S.C. 1 et seq.

                                       17
<PAGE>

          (b) An award rendered in any such proceeding shall be final, binding,
     and non-appealable, and judgment thereon may be entered in any court having
     competent jurisdiction. With respect to a controversy, claim or dispute in
     which the claim or amount in controversy does not exceed $100,000, a single
     arbitrator will be impaneled, who will be chosen by the AAA and have
     authority to render a maximum award of $100,000, including all damages of
     any kind and costs, fees, interest and the like. With respect to a
     controversy, claim or dispute in which the claim or amount in controversy
     exceeds $100,000, the dispute will be decided by a majority vote of three
     arbitrators, each of whom shall be selected by the AAA. All arbitrators
     will be knowledgeable in the subject matter of the dispute.

          (c) The arbitrator(s) may grant any remedy or relief they deem just
     and equitable, including any provisional and injunctive remedies available
     at law or in equity (in which case the party receiving such relief may
     apply to the court of competent jurisdiction for enforcement of such
     provisional or injunctive order, without prejudice to the continued
     arbitration of the matter); provided, however, that the AAA may, upon the
     demand of any party to the controversy, claim, or dispute, administratively
     appoint a single "provisional relief" arbitrator on an expedited basis to
     consider any request for, and grant, such provisional or injunctive remedy;
     and, provided further, that the arbitrators shall award reasonable
     attorneys' fees and expenses to the prevailing party. The arbitrators will
     resolve all disputes in accordance with the laws of the State of Delaware.
     The arbitrators will make specific, written findings of fact and
     conclusions of law. The arbitrators' findings of fact will be binding on
     all parties and will not be subject to further review.

     Section 10.6 Remedies. The rights and remedies of the Company and of the
                  --------
Members hereunder shall not be mutually exclusive, i.e., the exercise of one or
more of the provisions hereof shall not preclude the exercise of any other
provisions hereof. Except as otherwise provided for herein, it is expressly
understood and agreed by the Members that, notwithstanding any other remedies
which may be available at law or in equity to the Company, the Members or any of
their respective Affiliates, the remedies available to such Persons upon a
failure by any other such Person to perform any of its obligations hereunder, or
upon a breach of any agreement, covenant or representation hereunder, shall be
limited to those remedies which are expressly set forth in this Agreement, and
all remedies which are not set forth herein, whether at law, equity or
otherwise, are hereby waived by the Members in their own capacities and on
behalf of their Affiliates.

     Section 10.7 No Third Party Beneficiaries. Nothing in this Agreement,
                  ----------------------------
expressed or implied, is intended to confer any rights or remedies upon any
Person, other than the Members and, subject to the restrictions on assignment
contained herein, their respective successors and assigns.

     Section 10.8 Amendments. This Agreement may be modified, altered,
                  ----------
supplemented or amended in any manner only with the approval of the Managing
Member. Any administrative alteration to Schedule A hereto (i.e., correcting a

                                       18
<PAGE>

spelling or typographical error or updating of a Member's address and contact
information or reflecting the admission of Additional Members or Substitute
Members following the issuance or Transfer of Membership Shares in accordance
with the terms of this Agreement) shall not be deemed an amendment to such
schedule or to this Agreement for purposes of this Section 10.8 and may be
effectuated by the Officers at the direction of the Board of Directors.

     Section 10.9 Interpretation. Whenever appropriate in the context, terms
                  --------------
used in this Agreement in the singular also include the plural, and vice versa,
and each masculine, feminine or neuter pronoun shall also include the other
genders. Unless otherwise expressly stated herein, all references to the term
"including" shall be deemed to be interpreted as meaning "including, without
limitation". Unless otherwise expressly stated herein, all references to the
phrase "applicable law" shall be deemed to include provisions of rules and
regulations promulgated under applicable law. Except as otherwise expressly
provided herein, all references herein to any contract, agreement, law, rule,
regulation or other document shall refer to such contract, agreement, law, rule,
regulation or other document as amended from time to time.

     Section 10.10 Captions. The captions of articles, sections and schedules of
                   --------
this Agreement are for convenience only, and neither limit nor amplify the
provisions of the Agreement itself.

     Section 10.11 Notices. All notices, demands, approvals, consents and
                   -------
requests to be sent to the Company, or any Member pursuant to the terms hereof
shall be in writing and shall be deemed to have been properly given or served,
if personally delivered, sent by recognized messenger or next day courier
service, or sent by United States mail to the addresses listed on Schedule A
hereto, and will be deemed received, unless earlier received: (a) if sent by
express, certified or registered mail (and if by registered mail, with return
receipt requested), when actually received or delivery refused; (b) if sent by
messenger or courier, when actually received or refused, provided it is received
or refused on the same Business Day; (c) if delivered by hand, on the date of
delivery or refusal; and (d) if sent by first-class mail, seven (7) days after
it was mailed, unless returned to sender for any reason by the United Stated
Postal Service, but not at the request of the addressee. Rejection or other
refusal to accept or the inability to deliver because of changed address of
which no notice was given shall be deemed to be receipt of the notice, demand or
request sent.

                                   ARTICLE XI
                                   DEFINITIONS

     Section 11.1 Certain Defined Terms. When used in this Agreement, the
                  ---------------------
following terms have the indicated meanings. All other capitalized terms are
defined elsewhere in this Agreement.

     "Affiliate" or "Affiliates" of a specified Person is a Person or Persons
that (i) directly or indirectly, through one or more intermediaries, Controls,
is Controlled by or is under common Control with the Person specified, or (ii)
in the case of a natural person, is a spouse, natural brother or sister, linear
ancestor or linear descendant of any such specified person, or (iii) in the case
of a natural person, is a legal representative or trustee of any such specified

                                       19
<PAGE>

persons, or (iv) is an officer, director, trustee, employee, shareholder,
member, partner, principal or trust for the benefit of any entity or Person
referred to in the preceding clauses (i), (ii) or (iii); provided, however, for
the purposes of this Agreement, that no Member shall be deemed an Affiliate of
any other Member or any officer or agent of the Company solely by virtue of the
relationship of those parties to each other pursuant to this Agreement.

     "Available Net Cash" means, for any fiscal period, any operating receipts
of the Company (including the cash proceeds received by the Company in
connection with any Capital Event) after payment of (i) any amounts required to
pay costs and expenses of the Company, including normal operating expenses,
taxes and professional or other fees, (ii) any payments of any Indebtedness, and
(iii) amounts of any reserves as may reasonably be determined by the Board of
Directors. For purposes of this definition, the term "Indebtedness" means, with
respect to the Company, (a) all indebtedness for borrowed money, (b) the
deferred purchase price of assets or services which, in accordance with
generally accepted accounting principles, would be reflected as a liability, (c)
the maximum amount of all letters of credit issued for the account of the
Company, (d) all capitalized lease obligations, and (e) obligations to guarantee
the debt of another Person.

     "Business Day" shall mean any day other than a Saturday, Sunday or any day
on which national banks in New York, New York are not open for business.

     "Capital Event" means any event not occurring in the ordinary course of
business of the Company, pursuant to which the Company receives any
consideration with respect to its assets or the disposition thereof or of any
interest therein, and including, without limitation, any sale, financing,
refinancing, exchange, redemption, conversion or liquidation of all or any part
of the assets of the Company (including equity interests owned by the Company).
For the avoidance of doubt, the reorganization contemplated by Section 3.9
hereof shall not be deemed a Capital Event.

     "Code" shall mean the Internal Revenue Code of 1986, as amended, or
corresponding provisions of future laws.

     "Control" shall mean the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through (i) the ownership of voting shares, (ii) general partnership or
managing member interests, (iii) common directors or trustees, or (iv) by
contract or otherwise.

     "Government Lists" shall mean (i) the Specially Designated Nationals and
Blocked Persons List maintained by the Office of Foreign Assets Control, U.S.
Department of the Treasury or (ii) any other list of terrorists, terrorist
organizations or narcotics traffickers maintained pursuant to any of the rules
and regulations of Office of Foreign Assets Control, U.S. Department of the
Treasury, or (iii) any similar list maintained by the U.S. Department of the
Treasury, U.S. Department of State, the U.S. Department of Commerce, any other
federal or state agency or pursuant to any Executive Order of the President of
the United States.

     "Patriot Act Offense" means any violation of the criminal laws of the
United States of America or any of the several states, or that would be a

                                       20
<PAGE>

criminal violation if committed within the jurisdiction of the United States of
America or any of the several states, relating to terrorism or the laundering of
monetary instruments, including any offense under (a) the Bank Secrecy Act of
1970, (b) the Money Laundering Control Act of 1986, or (c) the Uniting and
Strengthening of America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, in each case as the same
may be amended from time to time, and the rules and regulations promulgated
thereunder and corresponding provisions of future laws. The term "Patriot Act
Offense" also includes the crimes of conspiracy to commit, or aiding and
abetting another to commit, a Patriot Act Offense.

     "Permitted Transferee" means, as to any Member or Securityholder who is a
natural person, but in any event solely in the furtherance of such Member or
Securityholder's estate planning: (a) the spouse, brother, sister, lineal
ancestor or lineal descendent of such Member or Securityholder, (b) the legal
representative or trustee of such Member, Securityholder or any individual
specified in clause (a) of this definition, or (c) any partnership, limited
liability company, trust or other entity (i) organized solely for the sole
benefit of any individual specified in clause (a) of this definition or group of
such related individuals and (ii) controlled by such Member or Securityholder or
such Member or Securityholder's Permitted Transferee.

     "Person" means any legal person, including any individual, corporation,
limited liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, governmental entity or other entity
of similar nature.

     A "Prohibited Owner" means a proposed Additional Member or Substitute
Member or other transferee or assignee of a Membership Share, or such Person's
direct or indirect shareholders, members, partners, controlling parties,
beneficiaries or other owners of interests in such transferee, to the extent
that any such Person is, are or has been (a) included on any Government List or
(b) a Person who has been determined by a Governmental Authority to be subject
to the prohibitions contained in Executive Order 13224 (September 23, 2001) or
any similar provisions contained in the rules and regulations of the Office of
Foreign Assets Control or (c) indicted for any Patriot Act Offense or (d) to the
actual knowledge of the Company or any Member or their respective Affiliates, at
the time of transfer or other transaction, as applicable, under investigation by
any federal, state, local or foreign governmental authority for alleged criminal
behavior or (e) a Person which, directly or indirectly, is engaged in the
business of drug or nutrient delivery or any other business which the Company is
engaged at the time of the proposed Transfer.

     "Securityholder" means any Person holding a direct or indirect equity
interest in a Member.

     "Treasury Regulations" means the income tax regulations promulgated under
the Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).

                                       21
<PAGE>

     IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby,
have duly executed this Agreement as of the date first set forth above.

                               BIODELIVERY SCIENCES INTERNATIONAL, INC.

                               By:/s/ Francis E. O'Donnell, Jr.
                                  --------------------------------------------
                                  Name:  Francis E. O'Donnell, Jr.
                                  Title: President and Chief Executive Officer

                               /s/ Raphael Mannino
                               -----------------------------
                               Raphael Mannino

                               /s/ Susan Gould-Fogerite
                               -----------------------------
                               Susan Gould-Fogerite

                               /s/ Donald L. Ferguson
                               -----------------------------
                               Donald L. Ferguson

                               /s/ James A. McNulty
                               -----------------------------
                               James A. McNulty

                               /s/ Susan G. Bonitz
                               -----------------------------
                               Susan G. Bonitz

                               /s/ Mauro Bove
                               -----------------------------
                               Mauro Bove

                               /s/ Christopher Chapman
                               -----------------------------
                               Christopher Chapman

                               /s/ Samuel S. Duffey
                               -----------------------------
                               Samuel S. Duffey

                               ELLENOFF GROSSMAN SCHOLE & CYRULI, LLP

                               By: /s/ Douglas S. Ellenoff
                                  -----------------------------
                                  Name: Douglas S. Ellenoff
                                  Title: Partner

<PAGE>
<TABLE>
<CAPTION>

                                              SCHEDULE A

                 Names, Contact Information and Membership Shares Held by the Members

------------------------------------------- ------------------------------------ --------------------
           Name/Contact Information          Number/Class of Membership Shares   Percentage Interest
------------------------------------------- ------------------------------------ --------------------
<S>                                          <C>                                  <C>
BioDelivery Sciences International, Inc.
c/o UMDNJ - New Jersey Medical School
Administrative Building 4
185 South Orange Avenue                               708,586/Class A                  95.757%
Newark, New Jersey 07103                             8,600,000/Class B
------------------------------------------- ------------------------------------ --------------------

Raphael Mannino
c/o UMDNJ - New Jersey Medical School
Administrative Building 4
185 South Orange Avenue                               125,000/Class B                  1.285%
Newark, New Jersey 07103
------------------------------------------- ------------------------------------ --------------------

Susan Gould-Fogerite
c/o UMDNJ - New Jersey Medical School
Administrative Building 4                              75,000/Class B                  0.771%
185 South Orange Avenue
Newark, New Jersey 07103
------------------------------------------- ------------------------------------ --------------------

Donald L. Ferguson
c/o Land Dynamics, Inc.
11719 Old Ballas Road
St. Louis, MO 63141                                    75,000/Class B                  0.771%
------------------------------------------- ------------------------------------ --------------------

Ellenoff Grossman Schole & Cyruli, LLP
370 Lexington Avene, 19th Floor                        37,500/Class B                  0.386%
New York, NY 10017
------------------------------------------- ------------------------------------ --------------------

James A. McNulty
4419 W. Sevilla Street                                 20,000/Class B                  0.206%
Tampa, FL 33629
------------------------------------------- ------------------------------------ --------------------

Susan G. Bonitz
21 Sleepy Hollow Drive                                 20,000/Class B                  0.206%
Flemington, NJ 08822
------------------------------------------- ------------------------------------ --------------------

Mauro Bove
Via Sudafrica 20                                       20,000/Class B                  0.206%
00144 Rome Italy
------------------------------------------- ------------------------------------ --------------------

Christopher Chapman
800 Falls Lake Drive                                   20,000/Class B                  0.206%
Mitchelsville, MD 20720
------------------------------------------- ------------------------------------ --------------------

Samuel S. Duffey
P.O. Box 3379                                          20,000/Class B                  0.206%
Sarasota, Florida
------------------------------------------- ------------------------------------ --------------------

TOTAL                                       708,586 Class A / 9,012,500 Class B         100%
------------------------------------------- ------------------------------------ --------------------
</TABLE>

<PAGE>

                                   SCHEDULE B

                          BIORAL NUTRIENT DELIVERY, LLC
                    2003 CLASS B MEMBERSHIP SHARE OPTION PLAN

     1. Purposes of the Plan. The purposes of the Bioral Nutrient Delivery, LLC
        --------------------
2003 Class B Share Membership Option Plan are to attract and retain the best
available personnel for positions of substantial responsibility, to provide
additional incentive to Directors, Officers, Consultants and Employees of the
Company, and to promote the success of the Company's business. All Options
granted under the Plan are Non-Qualified Stock Options. This Plan is adopted by
the Managing Member as of January 8, 2003.

     2. Definitions. As used herein, the following definitions shall apply. All
        -----------
capitalized terms used but not defined herein shall have the meanings ascribed
such terms in that certain Limited Liability Company Operating Agreement of the
Company, dated January 8, 2003, by the parties signatory thereto, as members of
the Company (as the same may be amended and/or restated from time to time, the
"Operating Agreement").

     "Applicable Laws" means the requirements relating to the administration of
      ---------------
stock or unit option plans under the laws of the State of Delaware, U.S. federal
and state securities laws, and the Code.

     "BDSI" means BioDelivery Sciences International, Inc., a Delaware
      ----
corporation.

     "Beneficial Owner" has the meaning set forth in Rule 13d-3 of the Exchange
      ----------------
Act.

     "Board" means the Board of Directors of the Company.
      -----

     "Change in Control" means (i) any Person becomes the Beneficial Owner,
      -----------------
directly indirectly of securities of the Company representing 51% or more of the
combined voting power of the Company's then outstanding securities; (ii) any
consolidation or merger of the Company with or into any other corporation or
other entity or person in which the members of the Company prior to such
consolidation or merger own less than fifty percent (51%) of the Company's
voting power immediately after such consolidation or merger, excluding any
consolidation or merger effected exclusively to change the domicile of the
Company; (iii) a sale of all or substantially all of the assets of the Company,
or (iv) a liquidation or dissolution of the Company.

     "Class B Shares" means the Class B Membership Shares of the Company, the
      --------------
holders of which have the rights afforded them under the Operating Agreement.

     "Code" means the Internal Revenue Code of 1986, as amended, or any
      ----
successor statute or statutes thereto. Reference to any particular Code section
shall include any successor section.

     "Company" means Bioral Nutrient Delivery, LLC , a Delaware limited
      -------
liability company.

     "Director" means a Director of the Company.
      --------

<PAGE>

     "Employee" means any person, including a Officer who is an employee (as
      --------
defined in accordance with Section 3401(c) of the Code) of the Company. An
Employee shall not cease to be an Employee in the case of any leave of absence
approved by the Company.

     "Fair Market Value" means, as of any date, the value of a Class B Share as
      ------------------
determined in good faith by the Board.

     "Holder" means a person who has been granted or awarded an Option or who
      ------
holds Class B Shares acquired pursuant to the exercise of an Option.

     "Non-Qualified Stock Option" means a stock option that does not qualify as
      --------------------------
an "incentive stock option" within the meaning of Section 422 of the Code.

     "Option" means an option granted, pursuant to the Plan, to purchase Class B
      ------
Shares.

     "Option Agreement" means a written agreement between the Company and a
      ----------------
Holder evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.

     "Parent" means any entity which owns securities possessing 50 percent or
      ------
more of the total combined voting or approval power of all classes of securities
in the Company.

     "Person" has the meaning given under Exchange Act Section 13(d), and shall
      ------
include a "group," as defined in Rule 13d-5 promulgated thereunder. However, a
"person" shall not include: (i) the Company or its Parent or Subsidiaries; (ii)
a trustee or other fiduciary holding securities under this Plan or any employee
benefit plan of the Company, its Parent or Subsidiaries; or (iii) BDSI or any
entity which is controlled by BDSI or is under common control with BDSI.

     "Plan" means this Bioral Nutrient Delivery, LLC 2003 Class B Share Option
      ----
Plan.

     "Subsidiary" means any entity in which the Company owns securities
      ----------
possessing 50 percent or more of the total combined voting power of all classes
of securities in such entity.

     3. Class B Shares Subject To The Plan. Subject to the provisions of Section
        ----------------------------------
12 of the Plan, the maximum aggregate number of Class B Shares which may be
issued upon exercise of Options is 1,000,000 Class B Shares. If an Option is
cancelled, expires or becomes unexercisable without having been exercised in
full, the unpurchased Class B Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated). Class B Shares which are delivered by the Holder or withheld by the
Company upon the exercise of an Option under the Plan, in payment of the
exercise price thereof or tax withholding thereon, may again be optioned,
granted or awarded hereunder, subject to the limitations of this Section 3.

                                       2
<PAGE>

     4. Administration of the Plan.
        --------------------------

     (a) Administration By the Board. The Plan shall be administered by the
         ---------------------------
Board in accordance with the provision of this Plan.

     (b) Powers of the Board. Subject to the provisions of this Plan and the
         -------------------
approval of any relevant authorities, the Board shall have the authority in its
sole discretion:

          (i) to determine the Fair Market Value;

          (ii) to select the Employees to whom Options may from time to time be
     granted hereunder;

          (iii) to determine the number of Class B Shares to be covered by each
     such award granted hereunder;

          (iv) to approve forms of agreement for use under the Plan;

          (v) to determine the terms and conditions of any Option granted
     hereunder (such terms and conditions include, but are not limited to, the
     exercise price, the time or times when Options may vest or be exercised
     (which may be based on performance criteria), any vesting acceleration or
     waiver of forfeiture restrictions, and any restriction or limitation
     regarding any Option or Class B Share relating thereto, based in each case
     on such factors as the Board, in its sole discretion, shall determine);

          (vi) to determine whether to offer to buyout a previously granted
     Option as provided in Section 10(g) hereof and to determine the terms and
     conditions of such offer and buyout (including whether payment is to be
     made in cash or Class B Shares);

          (vii) to prescribe, amend and rescind rules and regulations relating
     to the Plan;

          (viii) to allow Holders to satisfy withholding tax obligations by
     electing to have the Company withhold from the Class B Shares to be issued
     upon exercise of an Option that number of Class B Shares having a Fair
     Market Value equal to the minimum amount required to be withheld based on
     the statutory withholding rates for federal and state tax purposes that
     apply to supplemental taxable income. The Fair Market Value of the Class B
     Shares to be withheld shall be determined on the date that the amount of
     tax to be withheld is to be determined. All elections by Holders to have
     Class B Shares withheld for this purpose shall be made in such form and
     under such conditions as the Board may deem necessary or advisable;

                                       3
<PAGE>

          (ix) to amend the Plan or any Option granted under the Plan as
     provided in Section 14; and

          (x) to construe and interpret the terms of the Plan and awards granted
     pursuant to the Plan and to exercise such powers and perform such acts as
     the Board deems necessary or desirable to promote the best interests of the
     Company which are not in conflict with the provisions of the Plan.

     (c) Effect of Board Decision. All decisions, determinations and
interpretations of the Board shall be final and binding on all Holders.

     5. Eligibility. Options may be granted only to Directors, Officers,
        -----------
Employees and Consultants. If otherwise eligible, a Director, Officer, Employee
or Consultant who has been granted an Option may be granted additional Options.

     6. Limitations. Neither the Plan nor any Option shall confer upon a Holder
        -----------
any right with respect to continuing the Holder's status as a Director or the
Holder's employment or consulting relationship with the Company, nor shall they
interfere in any way with the Holder's right or the Company's right to terminate
such directorship, employment or consulting relationship at any time, with or
without cause.

     7. Term of Plan. The Plan shall become effective upon its initial adoption
        ------------
by the Board and shall continue in effect until it is terminated under Section
14 hereof. No Options may be issued under the Plan after the tenth (10th)
anniversary of the date first listed above in this Plan.

     8. Term of Option. The term of each Option shall be stated in the
        --------------
applicable Option Agreement; provided, however, that the term shall be no more
than ten (10) years from the date of grant thereof.

     9. Option Exercise Price and Consideration.
        ---------------------------------------

     (a) Except as provided in Section 12, the exercise price per Class B Share
for the Class B Shares to be issued upon exercise of an Option shall be such
price as is determined by the Board.

     (b) The consideration to be paid for the Class B Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Board. Such consideration may consist of (i) cash or (ii) check.

     10. Exercise of Option.
         ------------------

     (a) Vesting; Fractional Exercises. Except as provided in Section 12, an
         -----------------------------
Option granted hereunder shall become vested and exercisable at the rate
specified in the Option Agreement. In the absence of a specified rate in the
Option Agreement, the Option shall become vested and exercisable at a rate of
fifty percent (50%) per year over two (2) years from the date the Option is

                                       4
<PAGE>

granted, subject to the condition that the Holder continue to be a Director,
Officer, Consultant or an Employee. An Option may not be exercised for a
fraction of a Class B Share.

     (b) Deliveries upon Exercise. All or a portion of an exercisable Option
         ------------------------
shall be deemed exercised upon delivery of all of the following to the Secretary
of the Company or his or her office:

          (i) A written or electronic notice complying with the applicable rules
     established by the Board stating that the Option, or a portion thereof, is
     exercised. The notice shall be signed by the Holder or other person then
     entitled to exercise the Option or such portion of the Option;

          (ii) Such representations and documents as the Board, in its sole
     discretion, deems necessary or advisable to effect compliance with
     Applicable Laws. The Board may, in its sole discretion, also take whatever
     additional actions it deems appropriate to effect such compliance,
     including, without limitation, placing legends on Class B Share
     certificates and issuing stop transfer notices to agents and registrars;

          (iii) In the event that the Option shall be exercised pursuant to
     Section 10(f) by any person or persons other than the Holder, appropriate
     proof of the right of such person or persons to exercise the Option; and

     (c) Conditions to Delivery of Evidence of Ownership. The Company shall not
         -----------------------------------------------
be required to issue or deliver any certificate or certificates (or other
evidence of ownership, including an amended Schedule A to the Operating
Agreement, certified by the Managing Member as to the number of Shares held by
each Member) for Class B Shares purchased upon the exercise of any Option or
portion thereof prior to fulfillment of all of the following conditions:

          (i) The completion of any registration or other qualification of such
     Class B Shares under any state or federal law, or under the rulings or
     regulations of the Securities and Exchange Commission or any other
     governmental regulatory body which the Board shall, in its sole discretion,
     deem necessary or advisable;

          (ii) The obtaining of any approval or other clearance from any state
     or federal governmental agency which the Board shall, in its sole
     discretion, determine to be necessary or advisable;

          (iii) The lapse of such reasonable period of time following the
     exercise of the Option as the Board may establish from time to time for
     reasons of administrative convenience;

          (iv) The receipt by the Company of full payment for such Class B
     Shares, including payment of any applicable withholding tax, which in the
     sole discretion of the Board may be in the form of consideration used by
     the Holder to pay for such Class B Shares under Section 9(b); and

                                       5
<PAGE>

          (v) The Holder's execution of a Joinder Agreement or similar
     instrument (the form of which shall be determined by the Board) whereby the
     Holder agrees to the terms and conditions of the Operating Agreement.

     (d) Termination of Relationship as a Service Provider. If a Holder ceases
         -------------------------------------------------
to be a Director, Officer, Employee or Consultant other than by reason of the
Holder's disability or death, such Holder may exercise his or her Option within
such period of time as is specified in the Option Agreement to the extent that
the Option is vested on the date of termination. In the absence of a specified
time in the Option Agreement, the Option shall remain exercisable for three (3)
months following the Holder's termination. If, on the date of termination, the
Holder is not vested as to his or her entire Option, the Class B Shares covered
by the unvested portion of the Option immediately cease to be issuable under the
Option and shall again become available for issuance under the Plan. If, after
termination, the Holder does not exercise his or her Option within the time
period specified herein, the Option shall terminate, and the Class B Shares
covered by such Option shall again become available for issuance under the Plan.

     (e) Disability of Holder. If a Holder ceases to be a Director, Officer,
         --------------------
Employee or Consultant as a result of the Holder's disability, as such term is
defined in Section 22(e)(3) of the Code, or, in the case of a Consultant which
is an entity, the bankruptcy or dissolution of such Consultant, the Holder may
exercise his or her Option within such period of time as is specified in the
Option Agreement to the extent the Option is vested on the date of termination.
In the absence of a specified time in the Option Agreement, the Option shall
remain exercisable for three (3) years following the occurrence of the Holder's
disability, bankruptcy or dissolution, as the case may be. If, on the date of
disability, bankruptcy or dissolution, the Holder is not vested as to his or her
entire Option, the Class B Shares covered by the unvested portion of the Option
shall immediately cease to be issuable under the Option and shall again become
available for issuance under the Plan. If, after disability, bankruptcy or
dissolution, the Holder does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Class B Shares covered by
such Option shall again become available for issuance under the Plan.

     (f) Death of Holder. If a Holder dies while still acting as a Director,
         ---------------
Officer, Employee or Consultant, the Option may be exercised within such period
of time as is specified in the Option Agreement, by the Holder's estate or by a
person who acquires the right to exercise the Option by bequest or inheritance,
but only to the extent that the Option is vested on the date of death. In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for three (3) years following the Holder's death. If, at the time of
death, the Holder is not vested as to his or her entire Option, the Class B
Shares covered by the unvested portion of the Option shall immediately cease to
be issuable under the Option and shall again become available for issuance under
the Plan. The Option may be exercised by the executor or Board of the Holder's
estate or, if none, by the person(s) entitled to exercise the Option under the
Holder's will or the laws of descent or distribution. If the Option is not so
exercised within the time specified herein, the Option shall terminate, and the
Class B Shares covered by such Option shall again become available for issuance
under the Plan.

                                       6
<PAGE>

     (g) Buyout Provisions. The Board may at any time offer to buyout for a
         -----------------
payment in cash or Class B Shares, an Option previously granted, based on such
terms and conditions as the Board shall establish and communicate to the Holder
at the time that such offer is made.

     11. Non-Transferability of Options. Except as otherwise provided in this
         ------------------------------
Section 11, Options may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the Holder,
only by the Holder. A Holder may transfer an Option to a partnership or trust
solely benefiting the holder or immediate family members, or to an inter vivos
or testamentary trust from which the option or underlying class b shares will be
transferred after the holder's death.

     12. Adjustments Upon Changes In Capitalization, Merger or Asset Sale.
         ----------------------------------------------------------------

     (a) In the event that the Board determines that any distribution (whether
in the form of cash, Class B Shares, other securities or other property),
recapitalization, reclassification, Membership Share split, reverse Membership
Share split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, liquidation, dissolution, or sale, transfer, exchange
or other disposition of all or substantially all of the assets of the Company,
or exchange of Membership Shares or other securities of the Company, issuance of
warrants or other rights to purchase Class B Shares or other securities of the
Company, or other similar corporate transaction or event, in the Board's sole
discretion, affects the Class B Shares such that an adjustment is determined by
the Board to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended by the Company to be made available
under the Plan or with respect to any Option, then the Board shall, in such
manner as it may deem equitable, adjust any or all of:

          (i) the number and kind of Class B Shares (or other securities or
     property) with respect to which Options Class B Shares may be granted or
     awarded (including, but not limited to, adjustments of the limitations in
     Section 3 on the maximum number and kind of Class B Shares which may be
     issued and adjustments of the maximum number of Class B Shares that may be
     purchased by any Holder pursuant to Section 6(b));

          (ii) the number and kind of shares of Class B Shares (or other
     securities or property) subject to outstanding Options; and

          (iii) the exercise price with respect to any Option.

     (b) In the event of a Change in Control, all Options shall become fully
vested and exercisable.

     13. Time of Granting Options. The date of grant of an Option shall, for all
         ------------------------
purposes, be the date on which the Board makes the determination granting such
Option, or such other date as is determined by the Board. Notice of the
determination shall be given to each Director or Employee to whom an Option is
so granted within a reasonable time after the date of such grant.

                                       7
<PAGE>

     14. Amendment and Termination of the Plan.
         -------------------------------------

     (c) Amendment and Termination. The Board may at any time wholly or
         -------------------------
partially amend, alter, suspend or terminate the Plan.

     (d) Effect of Amendment or Termination. No amendment, alteration,
         ----------------------------------
suspension or termination of the Plan shall impair the rights of any Holder,
unless mutually agreed otherwise between the Holder and the Board, which
agreement must be in writing and signed by the Holder and the Company.
Termination of the Plan shall not affect the Board's ability to exercise the
powers granted to it hereunder with respect to Options granted or awarded under
the Plan prior to the date of such termination.

     15. Inability to Obtain Authority. The inability of the Company to obtain
         -----------------------------
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Class B Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Class B Shares as to which such
requisite authority shall not have been obtained.

     16. Right to Issue of Class B Shares. The Board, during the term of this
         --------------------------------
Plan, shall at all times maintain the right to issue such number of Class B
Shares as shall be sufficient to satisfy the requirements of the Plan.

     17. Investment Intent. The Board may require a Holder, as a condition of
         -----------------
exercising any Option, (i) to give written assurances satisfactory to the Board
as to the Holder's knowledge and experience in financial and business matters
and/or to employ a purchaser representative reasonably satisfactory to the
company who is knowledgeable and experienced in financial and business matters
and that he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the Option, (ii) to
give written assurances satisfactory to the Board stating that the Holder is
acquiring the Class B Shares subject to the Option for the Holder's own account
and not with any present intention of selling or otherwise distributing the
Class B Shares and (iii) that the Class B Shares are subject to the restrictions
of transfer contained in the Operating Agreement. The foregoing requirements,
and any assurances given pursuant to such requirements, shall be inoperative if
as to any particular requirement, a determination is made by counsel for the
company that such requirement need not be met in the circumstances under the
then applicable securities laws.

     18. Governing Law. The validity and enforceability of this Plan shall be
         -------------
governed by and construed in accordance with the laws of the State of Delaware
(including the Limited Liability Company Act of the State of Delaware (6 Del.
C.ss.18-101, et seq.), as amended from time to time), without regard to
otherwise governing principles of conflicts of law.

                                       8
<PAGE>

     IN WITNESS WHEREOF, the undersigned Managing Member of the Company
certifies that the foregoing sets forth the Bioral Nutriment Delivery, LLC 2003
Incentive Plan as duly adopted by the Managing Member on January 8, 2003.

                                BIODELIVERY SCIENCES INTERNATIONAL, INC.

                                By:
                                     ---------------------------------------
                                Name:  Francis E. O'Donnell, Jr.
                                Title: President and Chief Executive Officer

                                       9

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