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Ventures Partners III LLC Agreement 06-30-1999

LIMITED LIABILITY COMPANY AGREEMENT OF

@ VENTURES PARTNERS III, LLC

 

THIS LIMITED LIABILITY COMPANY AGREEMENT of @ Ventures Partners III,

LLC (the "LLC"), dated as of June 30, 1999, is by and among the persons named on

Schedule A attached hereto, each of whom is designated as either a Capital

Member or a Managing Member.

 

WHEREAS, CMG @ Ventures Capital Corp. formed the LLC as a limited

liability company pursuant to the Delaware Limited Liability Company Act, by the

filing, on May 27, 1998, in the Office of the Secretary of State of the State of

Delaware, of a Certificate of Formation for the LLC (the "Certificate"); and

 

WHEREAS, effective as of the date hereof, the persons designated on

Schedule A as Managing Members have been admitted to the LLC; and

 

WHEREAS, the Members desire to enter into this Agreement to set forth

the agreements among the Members with respect to the LLC, all as more fully set

forth herein.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and

sufficiency of which is hereby acknowledged, and in consideration of the

agreements hereinafter set forth, the parties hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

The following capitalized terms used in this Agreement shall have the

respective meanings ascribed to them below:

 

"Act" means the Delaware Limited Liability Company Act, in effect at

the time of the initial filing of the Certificate with the Office of the

Secretary of State of the State of Delaware, and as thereafter amended from time

to time.

 

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"Affiliate" shall mean, with respect to any specified person or entity,

(i) any person or entity that directly or indirectly controls, is controlled by,

or is under common control with such specified person or entity; (ii) any person

or entity that directly or indirectly controls 10% or more of the outstanding

equity securities of the specified entity or of which the specified person or

entity is directly or indirectly the owner of 10% or more of any class of equity

securities; (iii) any person or entity that is an officer of, director of,

manager of, partner in, or trustee of, or serves in a similar capacity with

respect to, the specified person or entity or of which the specified person or

entity is an officer, director, partner, manager or trustee, or with respect to

which the specified person or entity serves in a similar capacity; or (iv) any

person that is a spouse, mother, father, brother, sister or lineal descendant of

the specified person.

 

"Agreement" means this Limited Liability Company Agreement as it may be

amended, supplemented, or restated from time to time.

 

"Capital Account" means a separate account maintained for each Member

and adjusted in accordance with Treasury Regulations under Section 704 of the

Code. To the extent consistent with such Treasury Regulations, the adjustments

to such accounts shall include the following:

 

(i) There shall be credited to each Member's Capital Account

the amount of any cash actually contributed by such Member to the

capital of the LLC, the fair market value of any property contributed

by such Member to the capital of the LLC, the amount of liabilities of

the LLC assumed by the Member or to which property distributed to the

Member was subject and such Member's share of the Net Profits of the

LLC and of any items in the nature of income or gain separately

allocated to the Members; and there shall be charged against each

Member's Capital Account the amount of all cash distributions to such

Member, the fair market value of any property distributed to such

Member by the LLC, the amount of liabilities of the Member assumed by

the LLC or to which property contributed by the Member to the LLC was

subject and such Member's share of the Net Losses of the LLC and of any

items in the nature of losses or deductions separately allocated to the

Members.

 

(ii) If the LLC at any time distributes any of its assets

in-kind to any Member, the Capital Account of each Member shall be

adjusted to account for that Member's allocable share of the Net

Profits, Net Losses or items thereof that would be realized by the LLC

if it sold the assets that were distributed at their respective fair

market values (taking Code Section 7701(g) into account) immediately

prior to their distribution.

 

 

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(iii) If elected by the LLC in accordance with Section 6.01(b)

hereof, at any time specified in Treasury Regulation Section

1.704-1(b)(2)(iv)(f), the Capital Account balance of each Member shall

be adjusted to the extent provided under such Treasury Regulation to

reflect the Member's allocable share (as determined under Article V) of

the items of Net Profits or Net Losses that would be realized by the

LLC if it sold all of its property at its fair market value (taking

Code Section 7701(g) into account) on the day of the adjustment.

 

"Capital Member" shall refer severally to any person named as a Capital

Member in this Agreement and any person who becomes an additional, substitute or

replacement Capital Member as permitted by this Agreement, in such person's

capacity as a Capital Member of the LLC. "Capital Members" shall refer

collectively to all such persons in their capacities as Capital Members.

 

"Carrying Value" means, with respect to any asset, the asset's adjusted

basis for federal income tax purposes; provided, however, that (i) the initial

Carrying Value of any asset contributed to the LLC shall be adjusted to equal

its gross fair market value at the time of its contribution and (ii) the

Carrying Values of all assets held by the LLC shall be adjusted to equal their

respective gross fair market values (taking Code Section 7701(g) into account)

upon an adjustment to the Capital Accounts of the Members described in paragraph

(iii) of the definition of "Capital Account." The Carrying Value of any asset

whose Carrying Value was adjusted pursuant to the preceding sentence thereafter

shall be adjusted in accordance with the provisions of Treasury Regulation

Section 1.704-1(b)(2)(iv)(g).

 

"Cause" shall mean, in connection with the termination of a Managing

Member's relationship with the Employer:

 

(i) conviction of, or plea of nolo contendere to, (A) a

felony, whether or not business related, which may injure the business

or reputation of the Employer, or (B) a crime of moral turpitude;

 

(ii) theft or embezzlement of assets of the Employer;

 

(iii) a material breach of any agreement between the Managing

Member and the Employer including, without limitation, any violation of

the covenants set forth in Sections 6.06 and 6.07 below;

 

 

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(iv) the willful and continued failure by the Managing Member

to substantially perform his or her duties (other than as a result of

incapacity due to physical or mental illness); or

 

(v) gross neglect of duties or responsibilities as an employee

of the Employer, or as a Managing Member, or dishonesty or

incompetence, or willful misconduct, which in any case adversely

affects the business of the Employer, but only if there has been a good

faith determination by a Majority in Number of the Voting Managing

Members other than the subject Managing Member that such neglect or

misconduct or dishonesty or incompetence has occurred.

 

"Certificate" means the Certificate of Formation creating the LLC, as

it may, from time to time, be amended in accordance with the Act.

 

"CMGI" means CMGI Inc., a Delaware corporation.

 

"CMGI Fund" means CMG @ Ventures III, LLC, a Delaware limited liability

company.

 

"CMGI Fund Agreement" means the Limited Liability Company Agreement of

the CMGI Fund, as from time to time amended and in effect.

 

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

time.

 

"Distributable Cash and Property", with respect to any particular

Investment shall mean, with respect to any fiscal period, the excess of all

receipts of cash and property of the LLC from such Investment, including

dividends or distributions in respect of such Investment, proceeds from a

capital transaction relating to such Investment, and any and all other sources

over the sum of:

 

(i) Any and all expenses of the LLC related directly or

indirectly to such Investment, including an allocable share of the

following types of LLC expenses:

 

(A) cash disbursements for all items which are

customarily considered to be "operating expenses";

 

(B) payments of interest, principal and premium and

points and other costs of borrowing under any indebtedness of

the LLC;

 

 

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<PAGE>

 

(C) payments made to purchase inventory or capital

assets, and for capital construction, rehabilitation,

acquisitions, alterations and improvements;

 

(D) payments made to purchase or sell securities, and

brokerage commissions, finders fees and transaction costs; and

 

(E) amounts set aside as reserves for working

capital, contingent liabilities, replacements or for any of

the expenditures described in clauses (A), (B), (C) and (D)

above which are deemed by the Voting Managing Members (in

their reasonable discretion) to be necessary to meet the

current and anticipated future needs of the LLC; and

 

(ii) The amount of expenses described in clause (i) above that

(A) are attributable to another Investment (the "Other Investment"),

(B) are not paid from the receipts of cash and property attributable to

the Other Investment as a result of the total expenses attributable to

the Other Investment for the fiscal period exceeding the total receipts

of cash and property attributable to the Other Investment for the

fiscal period and (C) are paid from the receipts of cash and property

in respect of the Investment for which the computation of Distributable

Cash and Property is being made (the "First Investment"); provided,

however, that if Distributable Cash and Property with respect to the

First Investment is reduced as a result of this clause (ii), a

corresponding amount of the next amount of Distributable Cash and

Property with respect to the Other Investment shall be treated as a

receipt attributable to the First Investment.

 

For purposes of determining Distributable Cash or Property in respect of any

particular Investment, the Voting Managing Members shall allocate all LLC

expenses of the types described in clauses (i) and (ii) above among all

Investments and among Other Cash Receipts in such manner as they may reasonably

determine.

 

"Distributable Other Cash" means, with respect to any fiscal period,

the excess of Other Cash Receipts over the sum of the expenses (including those

described in clause (i) of the definition of "Distributable Cash and Property")

which the Voting Managing Members reasonably allocate to Other Cash Receipts.

 

"Domestic Fund" means @ Ventures III, L.P., a Delaware limited

partnership.

 

"Domestic Fund Agreement" means the Limited Partnership Agreement of

the Domestic Fund, as from time to time amended and in effect.

 

 

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<PAGE>

 

"Employer" shall mean, for any Managing Member, the LLC, any Fund, CMGI

or any Affiliate of any of them that employs the Managing Member on a

substantially full-time basis. For purposes of this Agreement, a Portfolio

Company shall not constitute an Affiliate of any of the LLC, any Fund or CMGI

(and a Managing Member shall not be deemed to be employed by an Employer if such

Managing Member is employed by a Portfolio Company), unless the Capital Member

specifically elects in writing to treat a Portfolio Company as an Affiliate and

such Portfolio Company falls within the definition of "Affiliate" set forth

above.

 

"Event of Forfeiture" shall mean and shall be deemed to have occurred

in the event that:

 

(x) a Managing Member dies or becomes mentally or physically

disabled (as determined by a physician licensed in the Commonwealth of

Massachusetts, selected by the Voting Managing Members exclusive of any

Managing Member which is the subject of the determination) or a

conservator or guardian is appointed for the benefit of any Managing

Member or his property;

 

(y) the relationship of such Managing Member to all Employers

is terminated without Cause or for any reason other than the reasons

specified in clauses (x) and (z) of this definition; or

 

(z) a Managing Member defaults in its obligation to make

Capital Contributions to the LLC pursuant to Section 3.01 below and the

Voting Managing Members exercise the remedy in Section 3.01(e), or the

relationship of such Managing Member to the LLC is terminated with

Cause (in accordance with the procedures described below), or is

terminated by the Managing Member (each of the foregoing, a "Clause Z

Event").

 

An Event of Forfeiture for a Managing Member whose relationship with all

Employers was terminated pursuant to clause (y) may thereafter occur if any

Clause Z Event occurs with respect to such Managing Member.

 

"Follow-on Investment" shall have the meaning ascribed thereto in the

Domestic Fund Agreement, the Foreign Fund Agreement and the CMGI Fund Agreement.

 

"Foreign Fund" means @ Ventures Foreign Fund III, L.P., a Delaware

limited partnership.

 

 

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<PAGE>

 

"Foreign Fund Agreement" means the Limited Partnership Agreement of the

Foreign Fund, as from time to time amended and in effect.

 

"Funds" means the Domestic Fund, the Foreign Fund and the CMGI Fund,

and "Fund" means any one of the Funds.

 

"Investment" means an investment in a Portfolio Company made by any

Fund, including without limitation a Follow-on Investment. As and when a Fund or

Funds makes an Investment, there shall be attached to this Agreement a Schedule

for such Investment, which shall reflect the information described in Section

3.03(a). Each such Schedule is hereinafter referred to as an "Investment

Schedule" and all such Schedules are referred to collectively as the "Investment

Schedules." The term "Investment" shall not include short-term investments made

by any Fund pending investments in securities of Portfolio Companies.

 

"Investment Percentage Interest" means each Member's Percentage

Interest in an Investment, as specified on the Investment Schedule for such

Investment.

 

"LLC" means the limited liability company formed pursuant to the

Certificate and this Agreement, as it may from time to time be constituted and

amended.

 

"Majority in Number of the Voting Managing Members" means, with respect

to a particular action or matter, a majority in number of the Voting Managing

Members then entitled to vote on the action.

 

"Managing Member" shall refer severally to any person named as a

Managing Member in this Agreement (whether a Voting Managing Member or a

Non-Voting Managing Member) and any person who becomes an additional, substitute

or replacement Managing Member as permitted by this Agreement, in such person's

capacity as a Managing Member of the LLC. "Managing Members" shall refer

collectively to all such persons in their capacities as Managing Members. Except

as expressly set forth in this Agreement, the rights, obligations and interests

of the Voting Managing Members and the Non-Voting Managing Members shall be

identical.

 

"Member" shall refer severally to any person named as a Capital Member

or Managing Member in this Agreement and any person who becomes an additional,

substitute or replacement Capital Member or Managing Member as permitted by this

Agreement, in such person's capacity as a Member of the LLC. "Members" shall

refer collectively to all such persons in their capacities as Members.

 

 

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<PAGE>

 

"Net Profits" and "Net Losses" mean the taxable income or loss, as the

case may be, for a period as determined in accordance with Code Section 703(a)

computed with the following adjustments:

 

(i) Items of gain, loss, and deduction shall be computed based

upon the Carrying Values of the LLC's assets (in accordance with

Treasury Regulation Sections 1.704(b)(2)(iv)(g) and/or 1.704-3(d))

rather than upon the assets' adjusted bases for federal income tax

purposes;

 

(ii) Any tax-exempt income received by the LLC shall be

included as an item of gross income;

 

(iii) The amount of any adjustments to the Carrying Values of

any assets of the LLC pursuant to Code Section 743 shall not be taken

into account;

 

(iv) Any expenditure of the LLC described in Code Section

705(a)(2)(B) (including any expenditures treated as being described in

Section 705(a)(2)(B) pursuant to Treasury Regulations under Code

Section 704(b)) shall be treated as a deductible expense;

 

(v) The amount of items of income, gain, loss or deduction

specially allocated to any Members pursuant to Section 5.02 shall not

be included in the computation; and

 

(vi) The amount of any items of Net Profits or Net Losses

deemed realized pursuant to paragraphs (ii) and (iii) of the definition

of "Capital Account" shall be included in the computation.

 

"Non-Voting Managing Member" shall refer severally to any Managing

Member identified as a Non-Voting Managing Member on Schedule A hereto and any

person who becomes an additional, substitute or replacement Non-Voting Managing

Member as permitted by this Agreement, in such person's capacity as a Non-Voting

Managing Member of the LLC. "Non-Voting Managing Members" shall refer

collectively to all such persons in their capacities as Non-Voting Managing

Members.

 

"Other Cash Receipts" means cash receipts of the LLC, exclusive of

capital contributions of the Members, which the Voting Managing Members

reasonably determine are not allocable to Investments.

 

 

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<PAGE>

 

"Percentage Interest" shall be the percentage interest of a Member set

forth in Schedule B, as amended from time to time, and subject to adjustment

pursuant to Sections 3.04, 8.02 and 8.03.

 

"Permitted Transferee" means (A) any Member; (B) any spouse, parent,

lineal descendant, brother, sister, or spouse of a brother or sister of a

Member; (C) any trust, corporation or partnership or other entity in which any

Member and/or one of the persons designated in clause (B) is a principal,

beneficiary, majority stockholder, member or limited or general partner with an

aggregate interest in profits and losses of greater than fifty percent; (D)

grantors or beneficiaries of a trust which is (or of which the trustees thereof

are, in their capacities as trustees) a Member; or (E) charitable foundations

created or primarily endowed by a Member or a member of his or her family.

 

"Portfolio Company" means the issuer of any security in which any Fund

has invested, other than issuers in which the Fund has made short-term

investments pending the making of long-term investments.

 

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

 

"Vesting Commencement Date" means, for each Managing Member, the

Vesting Commencement Date specified on Schedule A attached hereto.

 

"Vesting Escrow" shall have the meaning ascribed thereto in Section

4.02.

 

"Vested Percentage" means, for any Managing Member, a fraction

(expressed as a percentage) the numerator of which is the number of whole

calendar quarters that have elapsed between such Managing Member's Vesting

Commencement Date and the date of determination and the denominator of which is

20; provided, however, that in no event shall a Managing Member's Vested

Percentage exceed 100%.

 

"Voting Managing Member" shall refer severally to any Managing Member

identified as a Voting Managing Member on Schedule A hereto and any person who

becomes an additional, substitute or replacement Voting Managing Member as

permitted by this Agreement, in such person's capacity as a Voting Managing

Member of the LLC. "Voting Managing Members" shall refer collectively to all

such persons in their capacities as Voting Managing Members.

 

 

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ARTICLE II

 

GENERAL PROVISIONS

 

2.01 Formation of Limited Liability Company; Foreign Qualification. The

Capital Member formed the LLC as a limited liability company under the Act on

May 27, 1998, by the filing on such date of the Certificate in the Office of the

Secretary of State of the State of Delaware.

 

Prior to the LLC's conducting business in any jurisdiction other than

the State of Delaware, the LLC shall comply, to the extent procedures are

available, with all requirements necessary to qualify the LLC as a foreign

limited liability company in each such jurisdiction where foreign qualification

is either necessary or appropriate. Each Member shall execute, acknowledge,

swear to and deliver all certificates and other instruments conforming to this

Agreement that are necessary or appropriate to qualify, or, as appropriate, to

continue or terminate the foreign qualification of, the LLC as a limited

liability company in all such jurisdictions in which the LLC may conduct

business.

 

2.02 Name of the LLC. The name of the LLC shall be @ Ventures Partners

III, LLC.

 

2.03 Business of the LLC. The general character of the business of the

LLC is to (a) serve as the general partner of each of the Domestic Fund and the

Foreign Fund, (b) serve as the Managing Member of the CMGI Fund, (c) own a

limited liability company interest in Covestco-Ateura, LLC, and (d) engage in

any activities directly or indirectly related or incidental thereto which may be

lawfully conducted by a limited liability company formed under the laws of the

State of Delaware.

 

2.04 Place of Business of the LLC; Resident Agent. The address of the

principal place of business of the LLC, and the office at which the LLC will

maintain its records is 100 Brickstone Square, Andover, Massachusetts 01810. the

LLC's registered office in Delaware is c/o Corporation Trust Company, 1209

Orange Street, Wilmington, Delaware, 19810, and the LLC's registered agent for

service of process in Delaware is Corporation Trust Company, 1209 Orange Street,

Wilmington, Delaware, 19810. The Voting Managing Members may at any time and

from time to time change the LLC's principal place of business, establish

additional places of business, change the LLC's registered agent or registered

office in Delaware, and in each case shall promptly provide notice of any of

such actions (identifying all such offices and agents) to all Members.

 

 

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2.05 Duration of the LLC. The term of the LLC commenced on May 27,

1998, and the LLC shall have perpetual existence, unless earlier terminated in

accordance with Article IX hereof.

 

2.06 Members' Names and Addresses. The name and address of each Member

are set forth on Schedule A. Additional Members may be admitted in accordance

with the procedures specified in Article VIII. A Member may not resign from the

LLC at any time.

 

2.07 No Partnership. The LLC is not intended to be a general

partnership, limited partnership or joint venture, and no Member shall be

considered to be a partner or joint venturer of any other Member, for any

purposes other than foreign and domestic federal, state, provincial and local

income tax purposes, and this Agreement shall not be construed to suggest

otherwise.

 

2.08 Title to LLC Property. All property owned by the LLC, whether real

or personal, tangible or intangible, shall be deemed to be owned by the LLC as

an entity, and no Member, individually, shall have any ownership of such

property. The LLC may hold any of its assets in its own name or in the name of

its nominee, which nominee may be one or more trusts. Any property held by a

nominee trust for the benefit of the LLC shall, for purposes of this Agreement,

be treated as if such property were directly owned by the LLC.

 

2.09 Nature of Member's Interest. The interests of all of the Members

in the LLC are personal property and shall not, under any circumstances, be

considered real property.

 

2.10 Investment Representations. Each Member, by execution of this

Agreement or an amendment hereto reflecting such Member's admission to the LLC,

hereby represents and warrants to the LLC that:

 

(a) It is acquiring an interest in the LLC for its own account

for investment only, and not with a view to, or for sale in connection

with, any distribution thereof in violation of the Securities Act or

any rule or regulation thereunder.

 

(b) It understands that (i) the interest in the LLC it is

acquiring has not been registered under the Securities Act or

applicable state securities laws and cannot be resold unless

subsequently registered under the Securities Act and such laws or

unless an exemption from such registration is available, (ii) such

registration under the

 

 

 

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<PAGE>

 

Securities Act and such laws is unlikely at any time in the future and

neither the LLC nor the Members are obligated to file a registration

statement under the Securities Act or such laws, and (iii) the

assignment, sale, transfer, exchange, or other disposition of the

interests in the LLC is restricted in accordance with the terms of this

Agreement.

 

(c) It has had such opportunity as it has deemed adequate to

ask questions of and receive answers from representatives of the LLC

concerning the LLC, and to obtain from representatives of the LLC such

information which the LLC possesses or can acquire without unreasonable

effort or expense, as is necessary to evaluate the merits and risks of

an investment in the LLC.

 

(d) It has, either alone or with its professional advisers,

sufficient experience in business, financial and investment matters to

be able to evaluate the merits and risks involved in investing in the

LLC and to make an informed investment decision with respect to such

investment.

 

(e) It can afford a complete loss of the value of its

investment in the LLC and is able to bear the economic risk of holding

such investment for an indefinite period.

 

(f) If it is an entity, (i) it is duly organized, validly

existing and in good standing under the laws of its jurisdiction of

organization, (ii) it has full organizational power to execute and

deliver this Agreement and to perform its obligations hereunder, (iii)

its execution, delivery and performance of this Agreement has been

authorized by all requisite action on behalf of the entity, and (iv) it

has duly executed and delivered this Agreement.

 

ARTICLE III

 

CAPITAL CONTRIBUTIONS

 

3.01 Capital Contributions.

 

(a) Each Member shall be required to contribute capital to the

LLC in accordance with this Section 3.01.

 

(b) As and when the LLC is required to contribute capital to

any Fund, each Member shall contribute to the LLC his or its

proportionate share of the amount required to be contributed by the LLC

to such Fund, determined in the manner

 

 

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hereinafter provided. Each of the Members hereby acknowledges that it

has received copies of the CMGI Fund Agreement, the Domestic Fund

Agreement and the Foreign Fund Agreement, that it has read each of

such Agreements, and understands the LLC's obligations thereunder,

including without limitation, the LLC's obligations to make capital

contributions to each of the Funds and to fund certain escrow

accounts.

 

(i) With respect to any routine call for capital by

any Fund (which capital calls the Members acknowledge are

generally, but not always, called for on a quarter annual

basis), each Member shall contribute a portion of the total

amount called for based on his Percentage Interest in the LLC

on the date on which such capital is required to be

contributed by the LLC to the Fund. Notwithstanding the

foregoing, the Voting Managing Members may, in respect of any

particular call for capital, determine to modify each Member's

share of the contribution to be made by such Member to the LLC

if the Voting Managing Members reasonably determine that the

amounts called for by any Fund relate in whole or in part to a

Follow-on Investment, in which case the portion of the

contributions which relate to such Follow-on Investment shall

be contributed by the Members in accordance with their

respective Investment Percentage Interests in such Follow-on

Investment. The Voting Managing Members may also make other

equitable adjustments to the portion to be contributed by each

Member to the LLC in respect of Investments to be made by the

Funds to take into account similar factors.

 

If any Member is admitted to the LLC during any

calendar quarter, such Member shall be required to contribute

to the LLC an amount equal to (x) the aggregate amount of the

sum of (I) any contributions made by the other Members to the

LLC during or with respect to such calendar quarter pursuant

to this Section 3.01(b)(i) plus (II) the unspent amount, if

any, of the capital contributions made by the Members to the

LLC in previous quarters multiplied by (y) such Member's

Percentage Interest in the LLC. The amount so contributed by

such Member shall be distributed to the other Members

(exclusive of Members whose Percentage Interests have been

reduced to zero), so that, following the admission of such

additional Member, all Members will have contributed a portion

of the amount described in clause (x) of the preceding

sentence equal to their respective Percentage Interests in the

LLC as in effect immediately following such admission.

 

(ii) With respect to any amount required to satisfy

the LLC's obligations under Section 5.2E of the Domestic Fund

Agreement [clawback obligation], or Section 5.2E of the

Foreign Fund Agreement [clawback

 

 

 

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obligation], each Member shall contribute a portion of the

total amount called for based on the aggregate amount of

distributions received by such Member from the LLC which are,

in the reasonable judgment of the Voting Managing Members,

attributable to the Domestic Fund and the Foreign Fund,

respectively, as compared to the aggregate amount of

distributions received by all Members from the LLC which are,

in the reasonable judgment of the Voting Managing Members,

attributable to the Domestic Fund and the Foreign Fund,

respectively. Notwithstanding the foregoing, in no event shall

any Member be obligated to contribute to the LLC any amount

pursuant to this clause (ii) in excess of the total amount of

distributions received by (or held in the Vesting Escrow for

the benefit of) such Member from the LLC. The obligation of

each Member to make contributions pursuant to this Section

3.01(b)(ii) shall survive the withdrawal, resignation or

default (as described in Section 3.01(e) below) of any Member,

and the occurrence of an Event of Forfeiture of any Member.

The LLC may contribute to the Domestic Fund or the Foreign

Fund on behalf of any Member any amounts held in a Vesting

Escrow on behalf of such Member, in respect of such Member's

obligations under this Section 3.01(b)(ii).

 

(iii) As and when the LLC is required to deposit

amounts into the escrow account established pursuant to

Section 5.2F of the Domestic Fund Agreement or Section 5.2F of

the Foreign Fund Agreement, the Voting Managing Members may

determine to call for contributions of cash to the LLC to

enable the LLC to satisfy any such obligation. Each Member

shall contribute a portion of the amount which the Voting

Managing Members so determine to call, based on the aggregate

amount of distributions received by such Member from the LLC

which are, in the reasonable judgment of the Voting Managing

Members, attributable to the Domestic Fund and the Foreign

Fund, respectively, as compared to the aggregate amount of

distributions received by all Members from the LLC which are,

in the reasonable judgment of the Voting Managing Members,

attributable to the Domestic Fund and the Foreign Fund,

respectively. In no event shall any Member be obligated to

contribute to the LLC any amount pursuant to this clause (iii)

in excess of the total amount of distributions received by (or

held in the Vesting Escrow for the benefit of) such Member

from the LLC. The obligation of each Member to make

contributions pursuant to this Section 3.01(b)(iii) shall

survive the withdrawal, resignation or default (as described

in Section 3.01(e) below) of any Member, and the occurrence of

an Event of Forfeiture of any Member. The LLC may contribute

to the Domestic Fund or the Foreign Fund on behalf of any

Member any amounts held in a Vesting Escrow on behalf of such

Member, in respect of such Member's obligations under this

Section 3.01(b)(iii).

 

 

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(c) The Voting Managing Members may call for capital for other

LLC purposes as they may from time to time reasonably determine, and

any capital called for pursuant to this Section 3.01(c) shall be

contributed by the Members in proportion to their respective Percentage

Interests on the date on which such capital is called for.

 

(d) The Voting Managing Members shall call for capital from

all Members for the purposes specified in this Section 3.01 from time

to time as needed. In connection with any such call, the Voting

Managing Members shall provide to each Member notice of a call for

capital (which notice may be given in writing or by electronic mail),

which notice shall specify the aggregate amount called for from the

LLC, a general statement of the purposes for which such capital call is

being made, each Member's share of the total amount called for, and the

date on which the capital contribution is due (which date shall, to the

extent reasonably practicable, be not less than 10 days after the date

of the notice).

 

(e) Any contribution of capital which is not made when due

shall bear interest at the prime rate of interest announced from time

to time by The Wall Street Journal plus 1% per annum, until paid in

full. Without limiting the foregoing, if a Member fails to satisfy his,

her or its capital contribution obligation as required under this

Section 3.01 in a timely manner, the LLC may exercise any rights it may

have under the Act or otherwise at law or in equity, and shall also

have the rights provided in this Section 3.01(e). In any such event, a

Majority in Number of the Voting Managing Members (determined exclusive

of the Member which has defaulted in his capital contribution

obligation) may (but shall not be obligated to) cause the LLC to

deliver to such Member a notice ("Default Notice") making reference to

the Member's failure to contribute capital to the LLC, and to this

Section 3.01(e). If the defaulting Member fails to fund such capital

contribution obligation within five business days after the date of

delivery of the Default Notice, then an Event of Forfeiture shall be

deemed to have occurred with respect to such Member, with the

consequences specified in Section 3.04 below.

 

(f) The LLC shall maintain written records indicating the

amount of capital contributed by each Member to the LLC.

 

(g) The LLC may elect to withhold from any amounts which are

otherwise distributable to a Member in accordance with the terms of

this Agreement any amount which such Member may be required to

contribute to the LLC pursuant to this Section 3.01. In the event the

LLC so withholds, for all purposes of this Agreement the Member with

respect to whom the withholding occurs shall be treated as if he had

 

 

 

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been distributed such amount in accordance with Article IV hereof and

then recontributed such amount pursuant to this Section 3.01.

 

3.02 No Additional Capital. Except as provided in this Article III, no

Member shall be obligated or permitted to contribute any additional capital to

the LLC. No interest shall accrue on any contributions to the capital of the

LLC, and no Member shall have the right to withdraw or to be repaid any capital

contributed by it or to receive any other payment in respect of its interest in

the LLC, including without limitation as a result of the withdrawal or

resignation of such Member from the LLC, except as specifically provided in this

Agreement.

 

3.03 Anticipated Operations of the LLC.

 

(a) As and when any Fund acquires an Investment, the Managing

Members shall create an Investment Schedule for such Investment, which

shall be attached to this Agreement. The Investment Schedule for each

Investment shall reflect (a) the Fund or Funds making the acquisition,

(b) the Portfolio Company issuing the securities, (c) the Acquisition

Date, (d) the number and class or series of shares of such securities,

(d) the purchase price and/or other consideration payable by each Fund,

(e) the Investment Percentage Interest of each of the Members in such

Investment (determined in the manner hereinafter provided) and (f) such

other information, if any, as the Managing Members may deem

appropriate.

 

(b) The Investment Percentage Interest of the Capital Member

in each Investment (including Follow-on Investments) shall at all times

equal 10%.

 

(c) (i) Subject to Sections 3.03(c)(ii) and (iii) and 3.04,

the Investment Percentage Interest of each Managing Member for whom an

Event of Forfeiture has not occurred shall equal 90% multiplied by a

fraction (x) the numerator of which shall equal such Managing Member's

Percentage Interest at the beginning of the calendar quarter in which

the Investment was made (the "Applicable Quarter") and the denominator

of which shall equal the aggregate Percentage Interests at the

beginning of the Applicable Quarter for all Managing Members exclusive

of those for whom an Event of Forfeiture has occurred. The Investment

Percentage Interest of each Managing Member in each Investment shall be

subject to reduction upon the occurrence of an Event of Forfeiture.

 

(ii) Notwithstanding Section 3.03(c)(i), if any Fund

makes a Follow-on Investment, the Investment Percentage

Interests of the Managing Members in such Follow-on Investment

shall be their Investment Percentage

 

 

 

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Interests then in effect for other investments in the same

Portfolio Company (except that the Investment Percentage

Interest in any Follow-on Investment for any Managing Member

for whom an Event of Forfeiture has occurred shall be zero).

 

(iii) Notwithstanding Section 3.03(c)(i), Brad

Garlinghouse, David J. Nerrow, Jr. and Denise W. Marks, who

were admitted to the LLC as of January 11, 1999, February 3,

1999 and March 1, 1999, respectively, shall be entitled to

participate in those Investments made by the Fund prior to the

respective dates on which they were admitted to the LLC, and

their respective Investment Percentage Interests in such

investments are reflected on the Investment Schedules with

respect to such Investments, and all of the Members hereby

consent to such participation.

 

3.04 Event of Forfeiture.

 

(a) Each Managing Member's Percentage Interest and Investment

Percentage Interest in each Investment are subject to adjustment upon

the occurrence of an Event of Forfeiture with respect to such Managing

Member, as provided in this Section 3.04. In no event shall the

provisions of this Section 3.04 be applicable to the interest of the

Capital Member.

 

(b) Upon the occurrence of an Event of Forfeiture with respect

to a Managing Member:

 

(i) Such Managing Member's Percentage Interest in the

LLC shall, from and after the date of the Event of Forfeiture,

be reduced to zero, and the Percentage Interest in the LLC of

all other Managing Members (exclusive of any Managing Member

for whom an Event of Forfeiture has occurred) shall be

increased by an aggregate amount equal to the amount of the

Percentage Interest of the Managing Member for whom the Event

of Forfeiture has occurred (such increase to be allocated

among them in proportion to their respective Percentage

Interests immediately prior to the adjustment contemplated

hereby).

 

(ii) If the Event of Forfeiture is not a Clause Z

Event, such Managing Member's Investment Percentage Interest

in each Investment in which such Managing Member participates

shall be reduced to a Percentage determined by multiplying the

Managing Member's initial Investment Percentage Interest by

such Managing Member's then Vested Percentage; and, if the

Event of Forfeiture is a Clause Z Event, such Managing

Member's Investment

 

 

 

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Percentage Interest in each Investment in which such Managing

Member participates shall be reduced to zero. The Investment

Percentage Interest in each Investment of all other Managing

Members (exclusive of any Managing Member for whom an Event of

Forfeiture has occurred) participating in such Investment

shall be increased by an aggregate amount equal to the amount

of the reduction in the Investment Percentage Interest of the

Managing Member for whom the Event of Forfeiture has occurred

(such increase to be allocated among them in proportion to

their respective Investment Percentage Interests in such

Investment immediately prior to the adjustment contemplated

hereby).

 

(iii) Any amount held in any Vesting Escrow for the

benefit of such Managing Member shall be forfeited. Amounts so

forfeited shall (subject to the provisions of this Section

3.04 and Section 4.02), on an Investment by Investment basis,

be allocated to all other Managing Members (exclusive of any

Managing Member for whom an Event of Forfeiture has occurred)

participating in each such Investment (such distributions to

be allocated among them in proportion to their respective

Investment Percentage Interests in each such Investment

immediately prior to the adjustment contemplated hereby).

 

(iv) Such Managing Member (whether Voting or

Non-Voting) shall have no right to vote on or participate in

any decision or matter on or in which Managing Members are

entitled to vote or participate and such Managing Member shall

be disregarded for all purposes in determining the number of

Managing Members which constitute a Majority in Number of the

Voting Managing Members or the number or percentage or

Managing Members entitled to vote on any matter, as the case

may be.

 

(c) A Managing Member with respect to whom an Event of

Forfeiture has occurred: (i) shall not be entitled to participate in

any Investment acquired by the LLC (including without limitation, a

Follow-on Investment) made by the LLC after the date of the Event of

Forfeiture; (ii) shall not be required to make subsequent capital

contributions to the LLC from and after the date of the Event of

Forfeiture, except for capital contributions required pursuant to

Section 3.01(b)(ii) and (iii); and (iii) shall automatically and

without any action on the part of the LLC, such Managing Member or any

other Member, be deemed to have withdrawn from the LLC on the first

date on which the LLC no longer owns any Investment in which such

Managing Member has an Investment Percentage Interest.

 

The Voting Managing Members shall make all determinations

under this Section 3.04 (including determinations as to when and

whether an Event of Forfeiture has occurred, and the reduction in the

Percentage Interest and Investment Percentage

 

 

 

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Interests of the affected Managing Member in connection therewith), in

their reasonable discretion.

 

(d) Notwithstanding the foregoing, the interest of Denise W.

Marks shall not be subject to the provisions of this Section 3.04 and

such interest shall not be subject to forfeiture, reduction or

modification upon the occurrence of an Event of Forfeiture with respect

to Ms. Marks.

 

 

ARTICLE IV

 

DISTRIBUTIONS

 

4.01 Distribution of Distributable Cash and Property and Distributable

Other Cash.

 

(a) Distributable Cash and Property of the LLC shall be

distributed on an Investment by Investment basis, at such times and in

such amounts as the Voting Managing Members may in their reasonable

discretion determine. Any non-cash distributions made to the Members

shall be valued at their respective fair market values, as determined

by the Voting Managing Members in good faith and in a manner consistent

with the valuation procedures established in the Domestic Fund

Agreement and the Foreign Fund Agreement. Distributable Other Cash

shall be distributed, in such amounts as the Voting Managing Members

may determine, not less frequently than quarterly, within 30 days

following the last day of each fiscal quarter of the LLC.

 

(b) Subject to the provisions of Sections 4.02 and

9.02(b)below: (i) Distributable Cash and Property related to an

Investment shall be distributed to the Members in proportion to their

respective Investment Percentage Interests in such Investment on the

date the LLC makes such distribution; and (ii) Distributable Other Cash

shall be distributed to the Members in proportion to their respective

Percentage Interests on the date the LLC makes such distribution.

 

(c) The Voting Managing Members will use reasonable efforts to

cause the LLC to distribute to each Member in each year the Tax

Distribution Amount (as defined below), which amount shall be treated

as an advance against future distributions to such Member pursuant to

Section 4.01(b) above. The Tax Distribution Amount shall equal an

amount which, when added to all distributions previously made to the

Member pursuant to this Section 4.01 from the inception of the LLC,

equals the product of (i) the Member's allocable share of the net

taxable income of the LLC

 

 

 

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computed on an aggregate cumulative basis from the inception of the LLC

and (ii) the highest combined marginal rate of federal and

Massachusetts state income tax applicable to individuals for any year

since the inception of the LLC. Separate Tax Distribution Amounts shall

be computed with respect to each Investment, and, to the extent

practicable, the required distribution of the Tax Distribution Amount

attributable to a particular Investment for a particular period shall

be satisfied by a distribution of Distributable Cash and Property

attributable to such Investment. To the extent that the required

distribution of the Tax Distribution Amount attributable to a

particular Investment is satisfied by a distribution of Distributable

Cash and Property attributable to another Investment, rules similar to

those set forth in clause (ii) of the definition of "Distributable Cash

and Property" shall apply.

 

4.02 Vesting Escrow.

 

(a) Notwithstanding the provisions of Section 4.01 above, the

LLC shall distribute to each Managing Member on the date of any

distribution only that portion of any Distributable Cash and Property

to which he is entitled which is equal to his Vested Percentage of such

amount. Any portion of any distribution which is not distributed as a

result of the operation of this Section 4.02(a) shall be held in escrow

by the LLC, in accordance with this Section 4.02. Any escrow

established pursuant to this Section 4.02 is herein referred to as a

"Vesting Escrow." Subject to Section 3.04, on the last day of each

calendar quarter following the date of the distribution with respect to

any Investment, one-twentieth of the amount of the original

distribution (plus a proportionate amount of interest or other amounts

earned thereon, if any), shall be disbursed from such Vesting Escrow to

such Managing Member.

 

(b) The interest of the Capital Member shall not be subject to

the provisions of this Section 4.02, and it shall at all times be

entitled to receive 100% of any distributions to Distributable Cash and

Property allocable to it pursuant to and in accordance with Section

4.01.

 

(c) Each of the Managing Members hereby agrees and

acknowledges that, as a result of the operation of this Section 4.02,

(i) such Managing Member may be allocated Net Profits and Net Losses of

the LLC without corresponding distributions of Distributable Cash or

Property; (ii) the Managing Members are authorized to and may (but

shall not be required to) invest amounts that are held in a Vesting

Escrow in short-term investments pending distribution of such amounts

to the Managing Members; (iii) the LLC may hold in a Vesting Escrow

securities which would otherwise have been distributed to such Managing

Member, and the LLC shall be entitled to vote, transfer, sell, assign

and exercise all rights of ownership with respect to all such

securities prior

 

 

 

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to their distribution to the Managing Members in accordance with this

Section 4.02; and (iv) amounts held in escrow pursuant to this Section

4.02 shall be irrevocably forfeited by a Managing Member from and after

the date of any Event of Forfeiture with respect to such Managing

Member. If any property which is held in escrow pursuant to this

Section 4.02 is sold or otherwise disposed of, the proceeds of such

sale or other disposition shall be substituted in the Vesting Escrow

for such property, and released in accordance with Section 4.02(a)

above at the same time such property would have been released from such

Vesting Escrow.

 

(d) Upon the discontinuance of the activities of the LLC

related to the funding of additional investments after the Funds have

been fully invested, and with the approval of a Majority in Number of

the Voting Managing Members, the Vested Percentage of each Managing

Member shall be increased to one hundred percent (100%).

 

(e) Notwithstanding the foregoing, distributions of

Distributable Cash and Property to Denise W. Marks shall not be subject

to the provisions of this Section 4.02 and no portion thereof shall be

required to be held in a Vesting Escrow.

 

4.03 Certain Payments to the Internal Revenue Service Treated as

Distributions. Notwithstanding anything to the contrary herein, to the extent

that the LLC is required (as determined in the discretion of the Voting Managing

Members), or elects, pursuant to applicable law, either (i) to pay tax

(including estimated tax) on a Member's allocable share of LLC items of income

or gain, whether or not distributed, or (ii) to withhold and pay over to the tax

authorities any portion of a distribution otherwise distributable to a Member,

the LLC may pay over such tax or such withheld amount to the tax authorities,

and such amount shall be treated as a distribution to such Member at the time it

is paid to the tax authorities. In the event that the amount paid (or paid over)

to the tax authorities on behalf of a Member exceeds the amount that would have

been distributed to such Member absent such tax obligation, such excess shall be

treated as a demand loan from the LLC to such Member, which loan shall bear

interest at the prime rate announced from time to time by The Wall Street

Journal, until paid in full.

 

4.04 Distributions in Kind. A Member, regardless of the nature of his

contribution to the LLC, shall have no right to demand or receive any

distribution from the LLC in any form other than cash. The LLC may, at any time

and from time to time, make distributions in kind to the Members. Any Member

entitled to any interest in such assets shall, unless otherwise determined by

the Members, receive separate assets

 

 

 

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of the LLC and not an interest as a tenant-in-common with other Members so

entitled in any asset being distributed.

 

4.05 Distributions Upon Transfer or Admission. In the event that a

Member acquires an interest in the LLC either by transfer from another Member or

by acquisition from the LLC, the LLC shall close its books as of the date of the

acquisition and Distributable Cash and Property and items thereof computed for

the portion of the year ending on the date of the acquisition shall be

distributed among the Members without regard to such acquisition, and

Distributable Cash and items thereof computed for the portion of the year

commencing on the day following the date of the acquisition shall be allocated

among the Members taking into account such acquisition. For purposes of this

Section 4.04, any modifications to a Member's Percentage Interest or Investment

Percentage Interest for any Investment, shall be treated as if a Member acquired

an interest in the LLC.

 

4.06 Right to Set Off Certain Amounts. The LLC may withhold from any

amounts which are otherwise distributable to a Member in accordance with this

Agreement, and pay over to @Ventures Management, LLC (the "Management Company"),

any amount which such Member may owe to the Management Company pursuant to

certain promissory notes made by such Member to the Management Company, which

notes evidence loans made by the Management Company to such Member in order to

enable such Member to satisfy its capital contribution obligations to the LLC.

 

 

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ARTICLE V

 

ALLOCATION OF NET PROFITS AND NET LOSSES

 

5.01 Basic Allocations.

 

(a) Net Profits and Net Losses shall be computed on an

Investment by Investment basis as of the end of each fiscal year (or

other relevant period). Except as provided in Section 5.02 below (which

shall be applied first) and Section 5.01(b) below, Net Profits and Net

Losses attributable to a particular Investment shall be allocated among

the Members in proportion to their respective Investment Percentage

Interests in such Investment. Net Profits and Net Losses attributable

to Other Cash Receipts shall be allocated among the Members in

proportion to their respective Percentage Interests.

 

(b) Notwithstanding Section 5.01(a) above, Net Profits and Net

Losses attributable to any assets held in a Vesting Escrow shall be

specially allocated to the Managing Member to whom such Vesting Escrow

relates.

 

(c) For purposes of this Article V, the amount of the Net

Profits or Net Losses from any Investment (treating all sources of

Other Cash Receipts as one Investment) shall be determined by

allocating expenses incurred by the LLC among the Investments in the

same manner that expenses are allocated pursuant to the last sentence

of the definition of "Distributable Cash and Property."

 

(d) Allocations of Net Profits and Net Losses provided for in

this Section 5.01 shall generally be made as of the end of the fiscal

year of the LLC; provided, however, that allocations of items of Net

Profits and Net Losses described in clause (vi) of the definition of

"Net Profits" and "Net Losses" shall be made at the time deemed

realized as described in the definition of "Capital Account."

 

(e) Upon admission of any Managing Member to the LLC following

the date of formation of the LLC, any deduction attributable to such

admission shall be allocated among the Managing Members of the LLC

(determined immediately prior to the admission of such new Managing

Member), in proportion to such Managing Members' respective Percentage

Interests as in effect immediately prior to such admission.

 

 

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5.02 Regulatory Allocations. Notwithstanding the provisions of Section

5.01 above, the following allocations of Net Profits, Net Losses and items

thereof shall be made in the following order of priority:

 

(a) Items of income or gain (computed with the adjustments

contained in paragraphs (i), (ii) and (iii) of the definition of "Net

Profits and Net Losses") for any taxable period shall be allocated to

the Members in the manner and to the minimum extent required by the

"minimum gain chargeback" provisions of Treasury Regulation Section

1.704-2(f) and Treasury Regulation Section 1.704-2(i)(4).

 

(b) All "nonrecourse deductions" (as defined in Treasury

Regulation Section 1.704-2(b)(1)) of the LLC for any year shall be

allocated to the Members in the manner in which Net Profits and Net

Losses are allocated; provided, however, that nonrecourse deductions

attributable to "partner nonrecourse debt" (as defined in Treasury

Regulation Section 1.704-2(b)(4)) shall be allocated to the Members in

accordance with the provisions of Treasury Regulation Section

1.704-2(i)(1).

 

(c) Items of income or gain (computed with the adjustments

contained in paragraphs (i), (ii) and (iii) of the definition of "Net

Profits and Net Losses") for any taxable period shall be allocated to

the Members in the manner and to the extent required by the "qualified

income offset" provisions of Treasury Regulation Section

1.704-1(b)(2)(ii)(d).

 

(d) In no event shall Net Losses of the LLC be allocated to a

Member if such allocation would cause or increase a negative balance in

such Member's Capital Account (determined for purposes of this Section

5.02(d) only, by increasing the Member's Capital Account balance by (i)

the amount the Member is obligated to restore to the LLC pursuant to

Treasury Regulation Section 1.704-1(b)(2)(ii)(c) and (ii) such Member's

share of "minimum gain" and of "partner nonrecourse debt minimum gain"

as determined pursuant to Treasury Regulation Sections 1.704-2(g) and

1.704-2(i)(5), respectively).

 

(e) Except as otherwise provided herein or as required by Code

Section 704, for tax purposes, all items of income, gain, loss,

deduction or credit shall be allocated to the Members in the same

manner as are Net Profits and Net Losses; provided, however, that if

the Carrying Value of any property of the LLC differs from its adjusted

basis for tax purposes, then items of income, gain, loss, deduction or

credit related to such property for tax purposes shall be allocated

among the Members so as to take account of the variation between the

adjusted basis of the property for tax purposes and its Carrying Value

in the manner provided for under Code Section 704(c).

 

 

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(f) In the event that Net Profits, Net Losses or items thereof

in respect of any Investment are allocated to one or more Members

pursuant to subsections (a) or (b) above, subsequent Net Profit, Net

Losses or items thereof will first be allocated (subject to the

provisions of subsections (a) and (b)) to the Members in a manner

designed to result in each Member having been allocated an amount of

Net Profits, Net Losses or items thereof attributable to each

Investment as such Member would have been allocated had Section 5.02

not been contained in this Agreement.

 

5.03 Allocations Upon Transfer or Admission. In the event that a Member

acquires an interest in the LLC either by transfer from another Member or by

acquisition from the LLC, the LLC shall close its books as of the date of the

acquisition and Net Profits, Net Losses and items thereof computed for the

portion of the year ending on the date of the acquisition shall be allocated

among the Members without regard to such acquisition, and Net Profits, Net

Losses and items thereof computed for the portion of the year commencing on the

day following the date of the acquisition shall be allocated among the Members

taking into account such acquisition. For purposes of this Section 5.03, any

modifications to a Member's Percentage Interest or Investment Percentage

Interest for any Investment, shall be treated as if a Member acquired an

interest in the LLC.

 

ARTICLE VI

 

MANAGEMENT

 

6.01 Management of the LLC. (a) Subject to the provisions of this

Agreement and the Act, all powers shall be exercised by or under the authority

of, and the business and affairs of the LLC shall be controlled by the Members.

 

 

(b) Except to the extent that this Agreement specifically

provides for a higher or lower number or percentage of Members, all

decisions respecting any matter set forth herein or otherwise affecting

or arising out of the conduct of the business of the LLC shall be made

by action of a Majority in Number of the Voting Managing Members;

provided that, Voting Managing Members with respect to whom an Event of

Forfeiture has occurred shall have no right to vote on or participate

in any matter or decision to be made by the Voting Managing Members and

shall be disregarded for all purposes in determining the number of

Voting Managing Members which constitute a Majority in Number of the

Voting Managing Members. Except to the extent specifically provided in

this Agreement, the Non-Voting Managing Members shall not be entitled

to vote on, consent to or approve any matter relating to the conduct of

 

 

 

 

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the LLC's business. The Voting Managing Members, by action of a

Majority in Number thereof, may at any time and from time to time

change the status of any Managing Member from Voting to Non-Voting, and

vice versa.

 

Subject to the foregoing, the Voting Managing Members shall

have the exclusive right and full authority to manage, conduct and

operate the LLC business. Specifically, but not by way of limitation,

the Voting Managing Members (by action of such Majority in Number)

shall be authorized, for and on behalf of the LLC:

 

(i) to borrow money, to issue evidences of

indebtedness and to guarantee the debts of others for whatever

purposes they may specify, and, as security therefor, to

pledge or otherwise encumber the assets of the LLC;

 

(ii) to cause to be paid on or before the due date

thereof all amounts due and payable by the LLC to any person

or entity;

 

(iii) to employ such agents, employees, managers,

accountants, attorneys, consultants and other persons

necessary or appropriate to carry out the business and affairs

of the LLC, whether or not any such persons so employed are

Members or are affiliated or related to any Member, and to pay

such fees, expenses, salaries, wages and other compensation to

such persons as the Members shall in their sole discretion

determine;

 

(iv) to pay, extend, renew, modify, adjust, submit to

arbitration, prosecute, defend or compromise, upon such terms

as they may determine and upon such evidence as they may deem

sufficient, any obligation, suit, liability, cause of action

or claim, including taxes, either in favor of or against the

LLC;

 

(v) to pay any and all fees and to make any and all

expenditures which the Voting Managing Members, in their

discretion, deem necessary or appropriate in connection with

the organization of the LLC, and the carrying out of its

obligations and responsibilities under this or any other

Agreement;

 

(vi) to invest the assets of the LLC, and to lease,

sell, finance, refinance or dispose of all or any portion of

the LLC's property;

 

(vii) to cause the LLC to make or revoke any of the

elections referred to in Sections 108, 704, 709, 754 or 1017

of the Code or any similar provisions enacted in lieu thereof,

or in any other Section of the Code;

 

 

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(viii) to establish and maintain reserves for such

purposes and in such amounts as they deem appropriate from

time to time;

 

(ix) to pay all organizational expenses and general

and administrative expenses of the LLC;

 

(x) to deal with, or otherwise engage in business

with, or provide services to and receive compensation therefor

from, any person who has provided or may in the future provide

any services to, lend money to, sell property to, or purchase

property from the LLC, including without limitation, a Member;

 

(xi) to engage in any kind of activity and to perform

and carry out contracts of any kind necessary to, or in

connection with, or incidental to the accomplishment of the

purposes of the LLC;

 

(xii) to compromise the obligation of a Member to

make a contribution to the capital of the LLC or to return to

the LLC money or other property paid or distributed to such

Member in violation of this Agreement or the Act;

 

(xiii) to cause to be paid any and all taxes, charges

and assessments that may be levied, assessed or imposed upon

any of the assets of the LLC, unless the same are contested by

the Voting Managing Members;

 

(xiv) to exercise all powers and authority granted by

the Act to members, except as otherwise specifically provided

in this Agreement;

 

(xv) to cause the LLC to take any of the foregoing

actions in the name and on behalf of the Funds, in the LLC's

respective capacity as a general partner or managing member,

as applicable, of any Fund;

 

(xvi) to exercise all other rights, powers,

privileges and other incidents of ownership with respect to

the interest of the LLC in each of the Funds, and to perform

the LLC's respective obligations under the Fund Agreements.

 

(c) Notwithstanding the foregoing, the Voting Managing Members

shall not be authorized to take any of the following actions without

the prior approval of the Capital Member:

 

 

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(i) to do any act that is in contravention of this

Agreement or that is not consistent with the purposes of the

LLC;

 

(ii) to do any act that would make it impossible to

carry on the ordinary business of the LLC;

 

(iii) to guarantee the obligations of any Portfolio

Company; or

 

(iv) to take any other action which requires the

consent of the Capital Member pursuant to this Agreement.

 

Other than as set forth in this Section 6.01(c), the Capital Member

shall not participate in the management or control of the LLC and

shall have no authority to act for or bind the LLC.

 

(d) Any Managing Member is authorized to execute, deliver and

file on behalf of the LLC any documents to be filed with the Secretary

of State of the State of Delaware. The signature of one Managing Member

on any agreement, contract, instrument or other document shall be

sufficient to bind the LLC in respect thereof and conclusively evidence

the authority of such Managing Member and the LLC with respect thereto,

and no third party need look to any other evidence or require the

joinder or consent of any other party.

 

(e) Each Managing Member is authorized to use the title

"Managing Director" when acting on behalf of the LLC in the conduct of

the LLC's business.

 

(f) The Voting Managing Members, by action of a Majority in

Number of the Voting Managing Members exclusive of the Managing Member

as to whom the determination is being made, shall determine whether or

not "Cause" is present in connection with the termination of the

relationship of a Managing Member with the LLC. A Managing Member's

relationship with the LLC may be terminated for Cause only after a

hearing to consider the matter. Any such hearing shall be held only

after written notice has been given to all Members, including the

Managing Member proposed to be terminated. Such notice must be given

not less than 10 days prior to such hearing, and must specify the time

and place at which the hearing will be held, and a general statement of

the nature of the charges against the Managing Member proposed to be

terminated. At such hearing, the Managing Member proposed to be

terminated will have an opportunity to respond to the charges

constituting Cause. None of the Members (including the Managing Member

proposed to be terminated),

 

 

 

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may be represented at such hearing by counsel or other representatives.

At the time any such notice is given, or any time thereafter, but prior

to a decision of a Majority in Number of the Voting Managing Members

following the hearing, a Majority in Number of the Voting Managing

Members (exclusive of the Member proposed to be terminated) may

immediately relieve the Managing Member proposed to be terminated of

his or her duties and responsibilities hereunder pending a decision.

 

6.02 Tax Matters Partner. Andrew J. Hajducky, III shall be the tax

matters partner for the LLC pursuant to Code Sections 6221 through 6231.

 

6.03 Liability of the Members; Indemnification.

 

(a) No Member shall be liable to the LLC or any other Member

for any act or omission taken by the Member in good faith and in the

belief that such act or omission is in the best interests of the LLC;

provided that such act or omission is not in violation of this

Agreement and does not constitute negligence, misconduct, fraud or a

willful violation of law by the Member. No Member shall be liable to

the LLC or any other Member for any action taken by any other Member,

nor shall any Member (in the absence of negligence, misconduct, fraud

or a willful violation of law by the Member) be liable to the LLC or

any other Member for any action of any employee or agent of the LLC

provided that the Member shall have exercised appropriate care in the

selection and supervision of such employee or agent.

 

 

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(b) Each Member and its respective partners, agents, employees

and Affiliates (the "Indemnitees") shall be and hereby are (i)

indemnified and held harmless by the LLC and (ii) released by the other

Members from and against any and all claims, demands, liabilities,

costs, expenses, damages, losses, suits, proceedings and actions for

which such Indemnitee has not otherwise been reimbursed (collectively,

"Liabilities"), whether judicial, administrative, investigative or

otherwise, of any nature whatsoever, known or unknown, liquidated or

unliquidated, that may accrue to the LLC or any other Member or in

which any of the Indemnitees may become involved, as a party or

otherwise, arising out of the conduct of the business or affairs of the

LLC by the respective Indemnitee or otherwise relating to this

Agreement, provided that an Indemnitee shall not be entitled to

indemnification or release hereunder if it shall have been determined

by (i) in the case of the Capital Member or an Indemnitee claiming by

or through the Capital Member, a court of competent jurisdiction, or

(ii) in the case of any Managing Member or an Indemnitee claiming by or

through the Managing Member, by the Capital Member, that (x) such

person did not act in good faith and in a manner such person reasonably

believed to be in the best interests of the LLC and, in the case of a

criminal proceeding, did not have reasonable cause to believe that its

conduct was lawful, or (y) such Liabilities shall have arisen from a

violation of this Agreement or the negligence, misconduct, fraud or

willful violation of law by such Indemnitee, or actions of such

Indemnitee outside the scope of and unauthorized by this Agreement, and

provided further that an Indemnitee shall not be entitled to

indemnification hereunder with respect to any liability arising in

connection with its activities performed for or on behalf of any

Portfolio Company, the securities of which have been sold or have been

distributed to the Members pursuant to Article IV, if such activities

were performed after the date on which such securities were sold or

distributed. The termination of any proceeding by settlement shall not,

of itself, create a presumption that the Indemnitee did not act in good

faith and in a manner that such person reasonably believed to be in the

best interests of the LLC or that the Indemnitee did not have

reasonable cause to believe that its conduct was lawful. The

indemnification rights provided for in this Section 6.03 shall survive

the termination of the LLC or this Agreement.

 

Expenses incurred by an Indemnitee in defense or settlement of

any claim that may be subject to a right of indemnification hereunder

may be advanced by the LLC prior to the final disposition thereof

provided that the following conditions are satisfied: (i) the claim

relates to the performance of duties or services by the Indemnitee on

behalf of the LLC and (ii) the Indemnitee undertakes to repay the

advanced funds to the LLC if it is ultimately determined that the

Indemnitee is not entitled to be indemnified hereunder or under

applicable law. The right of any Indemnitee to indemnification provided

herein shall be cumulative of, and in addition to, any and all

 

 

 

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rights to which such Indemnitee may otherwise be entitled by contract

or as a matter of law or equity and shall extend to such Indemnitee's

successors, assigns and legal representatives. The obligations of the

Members under this Section 6.03(b) shall be satisfied only after any

applicable insurance proceeds have been exhausted and then only out of

LLC assets and, to the extent required by law, distributions made by

the LLC to the Members, and the Members shall have no liability to fund

any indemnification payment hereunder.

 

6.04 Liability of Members. The liability of the Members for the losses,

debts and obligations of the LLC shall be limited to their capital

contributions; provided, however, that under applicable law, the Members may

under certain circumstances be liable to the LLC to the extent of previous

distributions made to them in the event that the LLC does not have sufficient

assets to discharge its liabilities.

 

6.05 Certain Fees and Expenses. All out-of-pocket expenses reasonably

incurred by any Member in connection with the LLC's business (including an

allocable share of certain overhead and similar expenses of the Capital Member)

shall be paid by the LLC or reimbursed to the Member by the LLC.

 

6.06 Other Activities.

 

(a) Subject to Sections 6.06(b) and Section 6.07 below, the

Members and their respective Affiliates may engage in and possess

interests in other business ventures and investment opportunities of

every kind and description, independently or with others, including

serving as directors, officers, stockholders, managers, members and

general or limited partners of corporations, partnerships or other

limited liability companies with purposes similar to or the same as

those of the LLC. Neither the LLC nor any other Member shall have any

rights in or to such ventures or opportunities or the income or profits

therefrom.

 

(b) Each Managing Member agrees that (I) during his or her

employment by the Employer, and (II) while he or she holds any interest

in the LLC, and (III) for a period of three (3) years following

termination of his or her employment relationship with the Employer if

such employment is terminated: (A) by the Managing Member voluntarily,

or (B) by the Employer for Cause, such Managing Member will not,

directly or indirectly:

 

(x) recruit, solicit or induce, or attempt to induce,

any employee or consultant of the Employer or of any Portfolio

Company or of any Affiliate of any of them to terminate his or

her employment with, or otherwise cease any

 

 

 

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relationship with, the Employer or any Portfolio Company or

any Affiliate of any of them; or

 

(y) solicit, divert, take away, or attempt to divert

or take away, any investment opportunity with respect to any

Portfolio Company or any investment opportunity with respect

to any prospective investment or prospective portfolio company

which the Employer contacted or solicited during such Managing

Member's employment relationship with the Employer.

 

If any restriction set forth herein is found by any court to be unenforceable

because it extends for too long a period of time, or over too great a range of

activities, or over too broad a geographic area, the restriction shall be

interpreted to extend only over the maximum period of time, range of activities,

or geographic area which the court finds to be enforceable. Each Managing Member

acknowledges and agrees that the restrictions contained in this Section 6.06(b)

are necessary for the protection of the business and goodwill of the Employer,

the Portfolio Companies and the Affiliates of any of them and are considered by

such Managing Member to be reasonable for such purpose and that his or her

interest in the LLC is being received partly in consideration for the foregoing

covenant.

 

6.07 Commitment of Members. Each of the Managing Members hereby agrees

to use its best efforts in connection with the purposes and objectives of the

LLC and to devote to such purposes and objectives such of its time and resources

as shall be necessary for the management of the affairs of the LLC.

 

6.08 Conflicts of Interest. No contract or transaction between the LLC

and one or more of its Members or Affiliates, or between the LLC and any other

corporation, partnership association or other organization in which one or more

of its Members or Affiliates are directors, officers, members, managers or

partners or have a financial interest, shall be void or voidable solely for such

reason, or solely because the Member or Affiliate is present at or participates

in any meeting of Managing Members which authorizes the contract or transaction,

or solely because his, her or its votes are counted for such purpose, if:

 

(i) the material facts as to his, her or its interest as to

the contract or transaction are disclosed or are known to the Voting

Managing Members and the Voting Managing Members authorize the contract

or transaction by a vote sufficient for such purpose without counting

the vote of any interested Voting Managing Member even though the

disinterested Voting

 

 

 

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Managing Members may be less than a Majority in Number of the Voting

Managing Members entitled to vote thereon; or

 

(ii) the material facts as to his, her or its interest and as

to the contract or transaction are disclosed or are known to the Voting

Managing Members entitled to vote thereon, and the contract or

transaction is specifically approved by a vote of the Voting Managing

Members; or

 

(iii) the contract or transaction is fair to the LLC or its

Affiliates as of the time it is authorized, approved or ratified by the

Voting Managing Members.

 

ARTICLE VII

 

BOOKS, RECORDS AND BANK ACCOUNTS

 

7.01 Books and Records. The Managing Members shall keep or cause to be

kept just and true books of account with respect to the operations of the LLC.

Such books shall be maintained at the LLC's principal place of business, or at

such other place as the Members shall determine, and all Members, and their duly

authorized representatives, shall at all reasonable times have access to such

books as well as any information required to be made available to the Members

under the Act. The Managing Members shall not be required to deliver or mail

copies of the LLC's Certificate of Formation or copies of certificates of

amendment thereto or cancellation thereof to the Members, although such

documents shall be available for review and/or copying by the Members at the

LLC's principal place of business.

 

7.02 Accounting Basis and Fiscal Year. The LLC's books shall be kept on

the accrual method of accounting, or on such other method of accounting as the

Members may from time to time determine, and shall be closed and balanced at the

end of each fiscal year of the LLC. The fiscal year of the LLC shall be the

calendar year.

 

7.03 Bank Accounts. The Managing Members shall be responsible for

causing one or more accounts to be maintained in a bank (or banks), which

accounts shall be used for the payment of the expenditures incurred by the

Managing Members in connection with the business of the LLC, and in which shall

be deposited any and all cash receipts of the LLC. All deposits and funds not

needed for the operations of the LLC may be invested in such short-term

investments as the Managing Members may determine. All such amounts shall be and

remain the property of the LLC, and shall be

 

 

 

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received, held and disbursed by the Managing Members for the purposes specified

in this Agreement. There shall not be deposited in any of said accounts any

funds other than funds belonging to the LLC, and no other funds shall in any way

be commingled with such funds.

 

7.04 Reports to Members. Within 90 days after the end of each fiscal

year, the Managing Members shall cause the LLC to furnish to each Member (i)

such information as may be needed to enable the Members to file their federal

income tax returns and any required state income tax returns, and (ii) an

audited balance sheet of the LLC as of the last day of such fiscal year, and

audited financial statements of the LLC for such fiscal year. The cost of such

reporting shall be paid by the LLC as a LLC expense. Any Member may, at any

time, at its own expense, cause an audit of the LLC books to be made by a

certified public accountant of its own selection. All expenses incurred by such

accountant shall be borne by such Member.

 

ARTICLE VIII

 

TRANSFERS OF INTERESTS OF MEMBERS

 

8.01 Substitution and Assignment of Member's Interest.

 

(a) Subject to Section 8.01(b) below, no Managing Member may

sell, transfer, assign, pledge, hypothecate or otherwise dispose of all

or any part of its interest in the LLC (whether voluntarily,

involuntarily or by operation of law), unless (i) the Capital Member

and (ii) a Majority in Number of the Voting Managing Members (exclusive

of the transferor) shall have previously consented to such transfer,

assignment, pledge, hypothecation or disposition in writing, the

granting or denying of which consent shall be in such Members' absolute

discretion. The provisions of this Section 8.01(a) shall not be

applicable to any assignment of the interest of a Managing Member to a

Permitted Transferee (provided that no such Permitted Transferee may be

admitted to the LLC as a substitute Member except as provided in

Section 8.01(c) below). Subject to Section 8.01(b) below, the Capital

Member may sell, transfer, assign, pledge, hypothecate or otherwise

dispose of all or any part of its interest in the LLC without the

consent or approval of any other Member, provided that the transferee

of any such interest may not be admitted to the LLC as a substitute

Member except as provided in Section 8.01(c) below.

 

(b) No assignment of the interest of a Member shall be made

if, in the opinion of counsel to the LLC, such assignment (i) may not

be effected without

 

 

 

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registration under the Securities Act of 1933, as amended, (ii) would

result in the violation of any applicable state securities laws, (iii)

would result in a termination of the LLC under Section 708 of the Code,

unless such a transfer is consented to by (i) the Capital Member and

(ii) a Majority in Number of the Voting Managing Members, (iv) would

result in the treatment of the LLC as an association taxable as a

corporation or as a "publicly-traded limited partnership" for tax

purposes, unless such a transfer is consented to by all Members or (v)

would require the LLC or any Fund to register as an investment company

under the Investment Company Act of 1940, as amended, or as an

investment advisor under the Investment Advisors Act of 1940, as

amended. The LLC shall not be required to recognize any assignment

until the instrument conveying such interest has been delivered to the

LLC for recordation on the books of the LLC. Unless an assignee becomes

a substituted Member in accordance with the provisions of Section

8.01(c), it shall not be entitled to any of the rights granted to a

Member hereunder, other than the right to receive all or part of the

share of the Net Profits, Net Losses, distributions of cash or property

or returns of capital to which his assignor would otherwise be

entitled.

 

(c) An assignee of the interest of a Member, or any portion

thereof, shall become a substituted Member entitled to all the rights

of a Member if, and only if:

 

(i) the assignor gives the assignee such right;

 

(ii) in the case of an assignee of a Managing Member,

the Capital Member and a Majority in Number of the Voting

Managing Members (exclusive of the assignor) consent to such

substitution, the granting or denying of which consent shall

be in the other Members' absolute discretion;

 

(iii) in the case of an assignee of the Capital

Member, a Majority in Number of the Voting Managing Members

consent to such substitution, the granting or denying of which

consent shall be in the Voting Managing Members' absolute

discretion, except that, in the case of a transfer all or

substantially all of the business or assets of CMGI (by sale

of assets, sale of stock, merger or otherwise), including its

indirect interest in the LLC, no such consent of the Voting

Managing Members shall be required;

 

(iv) the assignee or the assignor pays to the LLC all

costs and expenses incurred in connection with such

substitution, including specifically, without limitation,

costs incurred in the review and processing of the assignment

and in amending this Agreement; and

 

 

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(v) the assignee executes and delivers such

instruments, in form and substance satisfactory to the LLC, as

may be necessary or desirable to effect such substitution and

to confirm the agreement of the assignee to be bound by all of

the terms and provisions of this Agreement.

 

Unless a Majority in Number of the Voting Managing Members (exclusive

of the assignor) otherwise approve, any assignee of the interest of a

Voting Managing Member who becomes a substitute Managing Member shall

be and become a Voting Managing Member, and any assignee of the

interest of a Non-Voting Managing Member who becomes a substitute

Managing Member shall be and become a Non-Voting Managing Member.

 

(d) The LLC and the Members shall be entitled to treat the

record owner of any interest in the LLC as the absolute owner thereof

in all respects, and shall incur no liability for distributions of cash

or other property made in good faith to such owner until such time as a

written assignment of such interest has been received and accepted by

the Managing Members and recorded on the books of the LLC. The Managing

Members may refuse to accept an assignment until the end of the next

successive quarterly accounting period. In no event shall any interest

in the LLC, or any portion thereof, be sold, transferred or assigned to

a minor or incompetent, and any such attempted sale, transfer or

assignment shall be void and ineffectual and shall not bind the LLC.

 

(e) If a Member who is an individual dies or a court of

competent jurisdiction adjudges him to be incompetent to manage his

person or his property, the Member's executor, administrator, guardian,

conservator or other legal representative may exercise all of the

Member's rights hereunder, but solely for the purpose of settling his

estate or administering his property, and in no event shall such

executor, administrator, guardian, conservator or legal representative

participate in any way in the conduct of the business of the LLC, or in

the making of any decision or the taking of any action provided for

hereunder (including without limitation, Section 6.01(a) or (b)) for

any other purpose. If a Member is a corporation, trust or other entity,

and is dissolved or terminated, the powers of that Member may be

exercised by its legal representative or successor.

 

8.02 Additional Members.

 

(a) Except as provided in Section 8.01, additional Members may

be admitted to the LLC only upon the written consent of the Capital

Member and a Majority in Number of the Voting Managing Members. Any

such consent shall specify

 

 

 

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(i) the capital contribution, if any, and the Percentage Interest of

the additional Member, (ii) whether such Managing Member is a Voting or

Non-Voting Managing Member and (iii) any other rights and obligations

of such additional Member. Such approval shall bind all Members. In

connection with any such admission of an additional Member, this

Agreement (including Schedules A and B) shall be amended to reflect the

additional Member, its capital contribution, if any, its Percentage

Interest, its Vesting Commencement Date, and any other rights and

obligations of the additional Member. In connection with any such

admission of an additional Member, the Percentage Interest or other

rights and interests of the Capital Member in the LLC may not be

diluted or otherwise modified or adjusted without the specific written

consent of the Capital Member.

 

(b) Unless all Voting Managing Members (exclusive of those

with respect to whom an Event of Forfeiture has occurred) otherwise

agree, in connection with the admission of any additional Managing

Member to the LLC, the Percentage Interests of all Managing Members

shall be diluted proportionately based on their respective Percentage

Interests immediately prior to any such admission.

 

(c) Each Managing Member, and each person who is hereinafter

admitted to the LLC as a Managing Member, hereby (i) consents to the

admission to the LLC of any such third party on such terms as may be

approved by the Members in accordance with this Section 8.02, and to

any amendment to this Agreement which may be necessary or appropriate

to reflect the admission of any such third party and the terms of its

interest in the LLC, and (ii) acknowledges that, in connection with any

admission of any such person, such Member's interest in allocations of

Net Profits and Net Losses and distributions of cash and property of

the LLC, and net proceeds upon liquidation of the LLC, may be diluted

or otherwise altered (subject to the provisions of this Section 8.02).

Any amendment to this Agreement which shall be made in order to

effectuate the provisions of this Section 8.02 shall be executed by the

Capital Member and a Majority in Number of the Voting Managing Members,

and any such amendment shall be binding upon all of the Members.

 

8.03 Reallocation of Percentage Interests. The Voting Managing Members,

by action of a Majority in Number thereof, may not later than 10 business days

following the commencement of any fiscal year, elect to modify the respective

Percentage Interests of the Managing Members. Any such determination to modify

the Percentage Interests of the Managing Members shall be made based on the

respective professional and managerial contribution and anticipated contribution

to the business of the LLC of the Managing Members, and any such determination

shall take effect as of the first day of such fiscal year, and shall not

otherwise have any retroactive effect. In no event shall

 

 

 

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the Percentage Interest of the Capital Member be modified or adjusted as a

result of this Section 8.03. In connection with any such adjustment, Schedule B

shall be amended accordingly, and all Members shall be bound by the

determination of a Majority in Number of the Voting Managing Members.

 

ARTICLE IX

 

DISSOLUTION AND TERMINATION

 

9.01 Events of Dissolution.

 

(a) The LLC shall be dissolved:

 

(i) on a date designated in writing by (A) the

Capital Member and (B) a Majority in Number of the Voting

Managing Members;

 

(ii) following the dissolution (following which the

business is not continued) of the last to dissolve of the

Funds, and the liquidation of all of assets of the Funds and

the winding up of their respective businesses;

 

(iii) upon the sale or other disposition of all of

the LLC's assets; or

 

(iv) upon the entry of a decree of judicial

dissolution under Section 18-802 of the Act.

 

(b) Dissolution of the LLC shall be effective on the day on

which the event occurs giving rise to the dissolution, but the LLC

shall not terminate until the LLC's Certificate of Formation shall have

been cancelled and the assets of the LLC shall have been distributed as

provided herein. Notwithstanding the dissolution of the LLC, prior to

the termination of the LLC, as aforesaid, the business of the LLC and

the affairs of the Members, as such, shall continue to be governed by

this Agreement. A liquidator appointed by the Voting Managing Members

(who may be a Member), shall liquidate the assets of the LLC, and

distribute the proceeds thereof as contemplated by this Agreement and

cause the cancellation of the LLC's Certificate of Formation.

 

 

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9.02 Distributions Upon Liquidation.

 

(a) After payment of liabilities owing to creditors, the

liquidator shall set up such reserves as it deems reasonably necessary

for any contingent or unforeseen liabilities or obligations of the LLC

(including without limitation, any liabilities or obligations to the

Funds). Said reserves may be paid over by such liquidator to a bank, to

be held in escrow for the purpose of paying any such contingent or

unforeseen liabilities or obligations and, at the expiration of such

period as such liquidator may deem advisable, such reserves shall be

distributed to the Members or their assigns in the manner set forth in

paragraph (b) below.

 

(b) After paying such liabilities and providing for such

reserves, the liquidator shall cause the remaining net assets of the

LLC to be distributed to all Members with positive Capital Account

balances (after such balances have been adjusted to reflect all debits

and credits required by applicable Treasury Regulations under Section

704(b) of the Code for all events through and including the

distribution in liquidation of the LLC), in proportion to and to the

extent of such positive balances. In the event that any part of such

net assets consists of notes or accounts receivable or other non-cash

assets, the liquidator may take whatever steps it deems appropriate to

convert such assets into cash or into any other form which would

facilitate the distribution thereof. If any assets of the LLC are to be

distributed in kind, such assets shall be distributed on the basis of

their fair market value net of any liabilities. No Member other than

the Capital Member shall have any right or interest in or to the name

"@ Ventures" and all rights and interest in such name shall, upon

termination of the LLC, be assigned and transferred to the Capital

Member.

 

 

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ARTICLE X

 

MISCELLANEOUS

 

10.01 Notices. Except as otherwise specifically provided in this

Agreement, any and all notices, requests, elections, consents or demands

permitted or required to be made under this Agreement shall be in writing,

signed by the Member giving such notice, request, election, consent or demand,

and shall be delivered personally, or sent by registered or certified mail, or

by overnight mail, Federal Express or other similar commercial overnight

courier, to the other Member or Members at their addresses set forth in Schedule

A, and, in the case of a notice to the LLC, at the address of its principal

office as set forth in Article I hereof, or at such other address as may be

supplied by written notice given in conformity with the terms of this Section

10.01. The date of personal delivery, three days after the date of mailing, the

business day after delivery to an overnight courier, as the case may be, or the

date of actual delivery if sent by any other method, shall be the date of such

notice.

 

10.02 Successors and Assigns. Subject to the restrictions on transfer

set forth herein, this Agreement, and each and every provision hereof, shall be

binding upon and shall inure to the benefit of the Members, their respective

successors, successors-in-title, heirs and assigns, and each and every

successor-in-interest to any Member, whether such successor acquires such

interest by way of gift, purchase, foreclosure, or by any other method, shall

hold such interest subject to all of the terms and provisions of this Agreement.

 

10.03 Amendments. Except as otherwise specifically provided in this

Agreement (including without limitation, Section 3.04 and Article VIII), this

Agreement may be amended or modified only by (i) the Capital Member and (ii) a

Majority in Number of the Voting Managing Members; provided that (x) no such

amendment shall increase the liability of, increase the obligations of or

adversely affect the interest of, any Member without the specific approval of

such Member (other than upon the occurrence of an Event of Forfeiture, upon

admission of a Managing Member in accordance with Section 8.02 or upon the

adjustment of the Percentage Interests of the Managing Members in accordance

with Section 8.03); (y) if any provision of this Agreement provides for the

approval or consent of a greater number of Members or of Members holding a

higher percentage of the total Percentage Interests of the Members, any

amendment effectuated pursuant to such provision, and any amendment to such

provision, shall require the approval or consent of such greater number of

Members or of Members holding such higher percentage of Percentage Interests;

and (z) subject to clauses (x) and (y) above, any amendment to this Section

10.03 shall require the

 

 

 

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approval of (i) the Capital Member and (ii) Managing Members holding not less

than two-thirds of all Percentage Interests held by all Managing Members.

 

10.04 Partition. The Members hereby agree that no Member nor any

successor-in-interest to any Member, shall have the right while this Agreement

remains in effect to have the property of the LLC partitioned, or to file a

complaint or institute any proceeding at law or in equity to have the property

of the LLC partitioned, and each Member, on behalf of himself, his successors,

representatives, heirs and assigns, hereby waives any such right. It is the

intention of the Members that during the term of this Agreement, the rights of

the Members and their successors-in-interest, as among themselves, shall be

governed by the terms of this Agreement, and that the right of any Member or

successor-in-interest to assign, transfer, sell or otherwise dispose of his

interest in the LLC shall be subject to the limitations and restrictions of this

Agreement.

 

10.05 No Waiver. The failure of any Member to insist upon strict

performance of a covenant hereunder or of any obligation hereunder, irrespective

of the length of time for which such failure continues, shall not be a waiver of

such Member's right to demand strict compliance in the future. No consent or

waiver, express or implied, to or of any breach or default in the performance of

any obligation hereunder, shall constitute a consent or waiver to or of any

other breach or default in the performance of the same or any other obligation

hereunder.

 

10.06 Entire Agreement. This Agreement constitutes the full and

complete agreement of the parties hereto with respect to the subject matter

hereof.

 

10.07 Captions. Titles or captions of Articles or sections contained in

this Agreement are inserted only as a matter of convenience and for reference,

and in no way define, limit, extend or describe the scope of this Agreement or

the intent of any provision hereof.

 

10.08 Counterparts. This Agreement may be executed in a number of

counterparts, all of which together shall for all purposes constitute one

Agreement, binding on all the Members notwithstanding that all Members have not

signed the same counterpart.

 

10.09 Applicable Law. This Agreement and the rights and obligations of

the parties hereunder shall be governed by and interpreted, construed and

enforced in accordance with the laws of the State of Delaware.

 

 

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10.10 Gender, Etc. In the case of all terms used in this Agreement, the

singular shall include the plural and the masculine gender shall include the

feminine and neuter, and vice versa, as the context requires.

 

10.11 Creditors. None of the provisions of this Agreement shall be for

the benefit of or enforceable by any creditor of any Member or of the LLC other

than a Member who is such a creditor of the LLC.

 

 

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IN WITNESS WHEREOF, the Members have signed and sworn to this Agreement

under penalties of perjury as of the date first above written.

 

CAPITAL MEMBER:

 

CMG @ VENTURES CAPITAL CORP.

 

 

By /s/ Andrew J. Hajducky III

-----------------------------------

 

Name Andrew J. Hajducky III

---------------------------------

 

Title CFO

---------------------------------

 

MANAGING MEMBERS:

 

/s/ David S. Wetherell

--------------------------------------

David S. Wetherell

 

/s/ Guy A. Bradley

--------------------------------------

Guy A. Bradley

 

/s/ Jonathan Callaghan

--------------------------------------

Jonathan Callaghan

 

/s/ Andrew J. Hajducky, III

--------------------------------------

Andrew J. Hajducky, III

 

/s/ Peter H. Mills

--------------------------------------

Peter H. Mills

 

/s/ Marc Poirier

--------------------------------------

Marc Poirier

 

/s/ Brad Garlinghouse

--------------------------------------

Brad Garlinghouse

 

/s/ David J. Nerrow, Jr.

--------------------------------------

David J. Nerrow, Jr.

 

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