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Yahoo! Marketplace LLC Agreement 08-26-1996

YAHOO! MARKETPLACE, L.L.C.

 

LIMITED LIABILITY COMPANY AGREEMENT

This LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") is made and

entered into as of August 26, 1996 (the "Effective Date"), by and among

Yahoo! Inc., a California corporation ("Yahoo"), and the other persons whose

names are set forth in SCHEDULE 1 hereto. Capitalized terms not otherwise

defined herein are defined in Section 1.9.

 

WHEREAS, the Members desire to form a Delaware limited

liability company on the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, the Members hereby agree as follows:

 

ARTICLE I

FORMATION OF COMPANY

 

1.1 FORMATION. The Members hereby form the Company pursuant

to the Delaware Limited Liability Company Act (6 Del. Code Sections 18-101 ET

SEQ.) (the "Act"), which Act shall govern the rights and liabilities of the

Members except as otherwise herein expressly stated.

 

1.2 NAME OF THE COMPANY. The name of the Company is Yahoo!

MarketPlace, L.L.C., a Delaware limited liability company.

 

1.3 FILINGS, OTHER ACTIONS. Yahoo has caused to be filed a

Certificate of Formation (the "Certificate") with the office of the Secretary

of State of Delaware. The Board (as defined below) shall take all other

actions which may be necessary or appropriate from time to time to comply

with all requirements of law for the formation and operation of a limited

liability company and to ensure the limited liability of the Members in the

State of Delaware and all jurisdictions where the Company may elect to do

business.

 

1.4 PLACE OF BUSINESS. The principal place of business for

the Company initially shall be at 635 Vaqueros Avenue, Sunnyvale, CA 94086;

provided, however, that the Board may change the address of the principal

office by notice in writing to all the Members. In addition, the Company may

maintain such other offices and places of business as the Board may deem

advisable.

 

1.5 TERM. The Company shall continue in effect perpetually,

subject to earlier termination in accordance with the provisions of this

Agreement.

 

1.6 PURPOSES AND POWERS.

 

(a) Subject to the provisions of this Agreement, the

purposes of the Company shall be to provide on-line services and related

products and services targeted to individual and business consumers located

within the United States and its territories, as well as any and all

activities necessary or incidental thereto.

 

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(b) The Company shall have all powers necessary,

suitable or convenient for the accomplishment of its purposes.

 

(c) Nothing set forth herein shall be construed as

authorizing the Company to possess any purpose or power, or to do any act or

thing, forbidden by law to a limited liability company organized under the

laws of the State of Delaware.

 

1.7 DELAWARE OFFICE; AGENT FOR SERVICE OF PROCESS. The

Company's agent for service of process in the State of Delaware shall be c/o

The Prentice-Hall Corporation System, Inc., 32 Loockerman Square, Suite L100,

Dover, County of Kent, Delaware. The name of the registered agent for

service of process on the Company is The Prentice-Hall Corporation System,

Inc. The Board may designate a different agent for service of process at any

time, provided, however, that the Board shall give all of the Members written

notice promptly following such change.

 

1.8 TITLE TO COMPANY PROPERTY. All property owned by the

Company, whether real or personal, tangible or intangible, shall be owned by

the Company as an entity, and no Member individually nor any other person,

partnership, corporation or other entity shall have any ownership interest in

such property.

 

1.9 DEFINITIONS. For purposes of this Agreement, the

following terms shall have the meanings ascribed to them below. Capitalized

terms defined in the Operating Agreement and not otherwise defined herein

shall have the meanings ascribed to them in the Operating Agreement.

 

(a) "ACT" shall mean the Delaware Limited Liability

Company Act, 6 Del. Code Sections 18-101 ET SEQ.

 

(b) "AFFILIATES" shall mean Subsidiaries and Related

Entities and with respect to VMI, Visa International Service Association. A

"Subsidiary" shall mean a company in which on a class-by-class basis, more

than fifty percent (50%) of the stock entitled to vote for the election of

directors is owned or controlled by a party, but only so long as such

ownership or control exists. For Visa and VMI, a "Related Entity" shall mean

an entity (A) at least fifty percent (50%) of whose stock or other equity is

owned collectively by Visa Members and that has the authority to process Visa

payment transactions, but only so long as such ownership exists; (B) has an

equity interest in Visa and is owned in whole collectively by Visa Members or

financial institutions (E.G., national or regional group members); or (C) is

exclusively managed by Visa or a national or group member of Visa for the

purpose of processing Visa payment transactions, but only so long as such

exclusive management exists. Notwithstanding anything to the contrary set

forth above, however, Subsidiaries or Related Entities do not include any

individual Visa Member, bank or like financial institution. Visa Affiliates

include, for example, without limitation, Visa USA, Inc., Vital, Inc., Plus

and Interlink.

 

(c) "AGREEMENT" shall mean this Limited Liability

Company Agreement, as the same may be amended from time to time (including by

the addition of Counterparts).

 

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(d) "APPROVAL" shall mean consent by the Members to an

action by the affirmative vote of Members holding a majority of the

Percentage Interests in the Company entitled to vote with respect to such

matter, or such other Percentage Interests as may be expressly stated herein,

which vote may be obtained either at a meeting of Members duly noticed (to

the address of each Member shown on the Company's records at least ten (10)

days prior to the date set forth in such notice) or by a written consent

executed and delivered by such Members; provided, however, that if Approval

is obtained by written consent, the Company must send written notice of the

action so taken to each non-consenting Member within three (3) days after the

taking of such action. The failure of the Company to provide such written

notice to the non-consenting Members shall not invalidate the action so taken

so long as such failure was inadvertent.

 

(e) "BANKRUPTCY" shall mean with respect to any person,

being the subject of an order for relief under Title 11 of the United States

Code, or any successor statute in any foreign jurisdiction having like import

or effect, or that such person shall have made an assignment for the benefit

of its creditors generally or a receiver shall have been appointed for

substantially all of the property and assets of such person.

 

(f) "BOARD" shall mean the Board of Managers of the

Company, designated in accordance with Section 3.1.

 

(g) "BOOK VALUE" shall mean, as of any particular date,

the value at which the Company's assets are properly reflected on the books

of the Company as of such date in accordance with the provisions of Treasury

Regulations Section 1.704-1(b). The Book Values of all Company assets shall,

if the Board in its sole discretion deems it appropriate, be adjusted to

equal their respective gross fair market values, as determined by the Board,

at the times specified in those regulations.

 

(h) "CAPITAL ACCOUNT" shall mean the individual capital

account of a Member maintained in accordance with Section 2.5 hereof.

 

(i) "CAPITAL CONTRIBUTION" shall have the meaning set

forth in Section 2.2 hereof.

 

(j) "CERTIFICATE" shall have the meaning set forth in

Section 1.3 hereof.

 

(k) "CODE" shall mean the Internal Revenue Code of 1986,

as amended.

 

(l) "COMPANY" shall mean Yahoo! MarketPlace, L.L.C., a

Delaware limited liability company organized pursuant to this Agreement.

 

(m) "COMPETITOR" shall mean, with respect to any party

to this Agreement, an entity that would reasonably be determined to be

involved in any substantial way in a business that is directly competitive in

any territory with the primary business of such party, whether directly or

indirectly, including (without limitation) as a partner, joint venturer or

owner of more than ten (10%) of the voting power of such competitive entity.

 

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(n) "COUNTERPART" shall mean an additional document

executed and delivered by (i) any new Member admitted to membership in the

Company after the original date of this Agreement, and (ii) such existing

Members having the right under this Agreement to approve the admission of

such new Member, which document shall set forth the new Member's Percentage

Interest, the resulting Percentage Interests of all other Members, and any

other terms and conditions as shall apply to such Members membership in the

Company. Each Counterpart shall be attached to, and shall become part of,

this Agreement.

 

(o) "DISTRIBUTABLE CASH" shall mean, with respect to

each fiscal year of the Company, the Company's cash flow from operations for

such fiscal year, as reflected in financial statements audited by the

Company's independent public accountants, after providing for reserves that

are determined by the Board to be required to fund ongoing development,

marketing, operations and capital expenditures of the Company in accordance

with the Operating Plan, and after deducting any amounts determined by the

Board to be subject to any contingency.

 

(p) "FOUNDERS" shall mean, collectively, Yahoo and each

member of the Visa Group.

 

(q) "MANAGEMENT POOL" shall mean the Percentage Interest

granted to executives of the Company by the Board as non-cash compensation,

which in no event shall exceed cumulatively and in the aggregate eight

percent (8%) of the Percentage Interests outstanding on the date of the first

grant of Percentage Interests to executives of the Company pursuant to

Section 7.3 hereof. The creation of the Management Pool shall reduce the

respective Percentage Interests of each of the Visa Group and Yahoo in equal

amounts. For example, if the full eight percent (8%) of the then outstanding

Percentage Interests is granted to executives of the Company, each of Yahoo's

and the Visa Group's respective Percentage Interest shall be reduced by four

percent (4%).

 

(r) "MANAGER" shall mean a person appointed to the Board

of Managers in accordance with Section 3.1.

 

(s) "MEMBER" shall mean Yahoo, each member of the Visa

Group and each other person admitted to membership in the Company whose

names, Capital Contributions and Percentage Interests are set forth on

SCHEDULE 1 hereto and all Counterparts.

 

(t) "OPERATING AGREEMENT" shall mean that certain

Operating Agreement dated as of even date herewith between the Company, Yahoo

and Visa.

 

(u) "OPERATING PLAN" shall mean the Operating Plan for

the Company which has been approved by the Board as the same may be amended

from time to time as set forth herein, which Operating Plan shall be updated

no less frequently than once each calendar year.

 

(v) "PERCENTAGE INTEREST" shall have the meaning set

forth in Section 2.1 hereof.

 

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(w) "PROFIT" OR "LOSS" shall mean for each taxable year,

the Company's taxable income or taxable loss for such taxable year, as

determined under Section 703(a) of the Code and Section 1.703-1 of the

Treasury Regulations (for this purpose, all items of income, gain, loss or

deduction required to be stated separately pursuant to Section 703(a)(1) of

the Code shall be included in taxable income or taxable loss), but with the

following adjustments: (i) any tax-exempt income or Company expenditures

described in Section 705(a)(2)(B) of the Code shall be taken into account in

computing such taxable income or taxable loss; (ii) any item of income or

gain required to be allocated specially to a Member under Section 6.2 hereof

shall not be taken into account in computing such taxable income or taxable

loss; and (iii) in lieu of the depreciation, amortization, gain or loss taken

into account in computing such taxable income or loss, the Company shall

compute such items based on the Book Value of Company property rather than

its tax basis, in accordance with Treasury Regulations Section

1.704-1(b)(2)(iv)(g)(3).

 

(x) "TAX DISTRIBUTIONS" shall mean an amount equal to

(a) the combined effective federal and California maximum corporate income

tax rates in effect for such fiscal year (taking into account the

deductibility of state taxes against federal taxable income, currently 41%),

multiplied by (b) the amount by which the Company Profit (other than income

and gain referred to in Section 6.6 hereof) allocated to such Member for such

fiscal year exceeds the cumulative net Company Loss (if any) allocated to

such Member since the inception of the Company.

 

(y) "TAX MATTERS PARTNER" has the meaning set forth in

Section 5.6.

 

(z) "TREASURY REGULATIONS" shall mean the Income Tax

Regulations issued by the Department of the Treasury.

 

(aa) "VISA" shall mean Visa International Service

Association, a Delaware corporation.

 

(bb) "VISA GROUP" shall mean VMI, Sterling Payot Capital,

L.P. and their permitted assignees.

 

(cc) "VISA OWNERSHIP PERIOD" shall mean the period

commencing with the Effective Date and ending on the later to occur of (i)

the date the Visa Group holds, in the aggregate, less than [REDACTED]* of all

then outstanding Percentage Interests; or (ii) the date on which the Visa

Brand Features are no longer used in the Service.

 

(dd) "VMI" shall mean Visa Marketplace, Inc., a Delaware

corporation, a wholly-owned subsidiary of Visa.

 

* Confidential treatment requested. Omitted portion filed

separately with the Commission.

 

 

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ARTICLE II

 

CAPITAL CONTRIBUTIONS

 

2.1 PERCENTAGE ECONOMIC INTERESTS. Each Member shall have an

undivided percentage economic interest in the Company, including, except as

may otherwise be provided in Article VI hereof, each item of income, gain,

loss, deduction, credit and distributions of the Company (a "Percentage

Interest"), equal to the percentage set forth next to such Member's name on

SCHEDULE 1 of this Agreement (or, after admission of new Members, on the most

recently adopted Counterpart).

 

2.2 CAPITAL CONTRIBUTIONS.

 

(a) Upon execution of this Agreement, the Founders have

contributed to the Company cash in the respective amounts set forth on

SCHEDULE 1. The Founders have agreed at the time of such contribution their

respective initial Capital Accounts (as defined below) were equal to the

amount of such contributions, subject to adjustment upon the events described

in this Agreement. The contributions made by the Founders under this Section

2.2, and the subsequent contributions of cash capital by Members to the

Company under Section 2.4, are hereafter referred to as "Capital

Contributions."

 

(b) In event that following the execution of this

Agreement the Board from time to time determines that the Company requires

additional funding (in light of the financial criteria set forth in the

Operating Plan), the Members will, within ten (10) days following notice from

the Company (which notice shall include a certified resolution of the Board

approving such funding), make additional Capital Contributions in cash in the

amount set forth in such notice, which shall be made in proportion to their

Percentage Interest; provided that the aggregate additional Capital

Contributions required by the Board shall not exceed two million dollars

($2,000,000) from all Founders, unless a higher amount receives the unanimous

approval of the Founders who hold any of the then outstanding Percentage

Interest.

 

2.3 MEMBER ADVANCES. In addition to the Capital

Contributions provided for under Section 2.2 and without limiting the

provisions of Section 2.4, the Members may, if the Board in its discretion

deems it appropriate, make cash advances in such amounts and upon such

commercially reasonable repayment, interest and other terms as the Board and

the Member providing such advance shall agree; provided, however, that during

the Visa Ownership Period, such advances shall not be made without Visa's

prior written consent. Any such cash advances shall be treated as loans to

the Company rather than Capital Contributions and shall therefore not affect

a Member's Capital Account.

 

2.4 ADDITIONAL CAPITAL CONTRIBUTIONS. The Board may admit

additional Members and accept additional Capital Contributions from such

additional Members or from existing Members from time to time and on such

commercially reasonable terms as the Board deems appropriate;

 

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provided, however, that during the Visa Ownership Period, the Board must

obtain Visa's written consent prior to taking any such action unless (i) Visa

has been notified of the material terms of the issuance of Percentage

Interests in such transaction, and VMI and Sterling Payot Capital, L.P. have

the right exercisable within twenty (20) days following such notice to

purchase a portion of such new Percentage Interests (on the terms set forth

in the notice) up to an amount sufficient for each of VMI and Sterling Payot

Capital, L.P. respectively to maintain the amount of its total Percentage

Interest immediately preceding such transaction, and (ii) if Yahoo or Yahoo's

Affiliates are the only purchasers of such additional Percentage Interests,

the material terms of such transaction have been determined in good faith by

an independent third party appraiser or investment bank to be fair from a

financial point of view to the Company and the Members (other than Yahoo).

No Member shall be obligated to make any other Capital Contributions, and no

Member shall make any such further Capital Contributions except as otherwise

provided in this Article II.

 

2.5 CAPITAL ACCOUNTS.

 

(a) A separate capital account (a "Capital Account")

shall be maintained for each Member strictly in accordance with the rules set

forth in Treasury Regulations Section 1.704-1(b)(2)(iv). Subject to the

preceding sentence, each Member's Capital Account shall be (i) increased by

the amount of Capital Contributions made by such Member to the Company and

allocations to such Member of Company Profits and other items of book income

and gain; and (ii) decreased by the amount of money and fair market value of

property (net of liabilities secured by such distributed property that such

Member is considered to assume or take subject to under Section 752 of the

Code) distributed to it by the Company and allocations to such Member of

Company Loss and other items of book loss and deductions; and (iii) otherwise

adjusted in accordance with the additional rules set forth in Treasury

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

 

(b) In the event the Book Values of Company assets are

adjusted pursuant to Treasury Regulations Section 1.704-1(b) and Section

1.9(g), the Capital Accounts of all Members shall be adjusted simultaneously

to reflect the allocations of income, gain, loss or deduction that would be

made to the Members if there were a taxable disposition of the Company's

property for its fair market value. If any assets of the Company are to be

distributed in kind, such assets shall be distributed on the basis of their

fair market values after the Members' Capital Accounts have been adjusted to

reflect the manner in which any unrealized income gain, loss or deduction

with respect to such assets (that have not been reflected in the Capital

Accounts previously) would be allocated between the Members if there were a

taxable disposition of the property for its fair market value.

 

(c) If any interest in the Company is transferred in

accordance with the provisions of this Agreement, the transferee Member shall

succeed to that portion of the Capital Account of the transferring Member as

relates to such transferred interest.

 

(d) It is the intent of the Company that the Capital

Accounts of all Members be determined and maintained in accordance with the

principles of Treasury Regulations

 

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Section 1.704-1 at all times throughout the full term of the Company and the

foregoing provisions of this Section 2.5 shall be interpreted in accordance

with such intention.

 

2.6 RETURN OF CAPITAL; PARTITION. Except as otherwise

provided herein, no Member shall have any right to (a) withdraw from the

Company, (b) demand the return of all or any part of such Member's Capital

Account during the term of the Company or (c) receive a return of such

Member's Capital Account from any specific assets of the Company. Each

Member irrevocably waives any right which such Member may have to cause a

partition of all or any part of the Company's assets. No Member shall be

entitled to receive any interest with respect to a Capital Contribution.

 

2.7 LIABILITY OF MEMBERS. Notwithstanding anything to the

contrary herein contained, no Member shall be liable for any debts, expenses,

liabilities or obligations of the Company except as otherwise agreed in

writing by such Member or as provided by law.

 

ARTICLE III

 

MANAGEMENT OF COMPANY

 

3.1 BOARD OF MANAGERS.

 

(a) The Board shall consist of five (5) persons, or such

higher number of persons determined by Approval of seventy five percent (75%)

of all then outstanding Percentage Interests; provided, however, that during

the Visa Ownership Period, the number of authorized members of the Board may

not be increased without Visa's prior written consent. Each of the directors

shall be appointed, and shall serve at the pleasure of, the holders of a

majority in interest of all Percentage Interests; provided that, during the

Visa Ownership Period, the members of the Board of Directors shall be

determined as follows:

 

(i) Two (2) Managers shall be appointed by, and

shall serve at the pleasure of, Yahoo;

 

(ii) Two (2) Managers shall be appointed by Visa and

shall serve at the pleasure of Visa; provided that each director appointed by

Visa shall be a full-time employee of Visa; and

 

(iii) One (1) Manager shall be appointed by, and

shall serve at the pleasure of, Yahoo, subject to the approval of Visa, which

approval shall not be unreasonably withheld.

 

(b) Board actions shall be valid only if made (i) at a

meeting held in person or by conference telephone upon at least three (3)

business days' prior notice (by telephone, courier or electronic mail

confirmed by courier), at which at least a majority of all Managers

(including any temporary alternate for a Manager who is reasonably acceptable

to a majority of the remaining Managers) then in office are present and a

majority of those Managers present at the meeting approve the Board action;

or (ii) by a writing signed by at least four (4) Managers

 

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(including during the Visa Ownership Period at least one (1) Manager

appointed by Visa, if at such time Visa has an appointee on the Board). Such

actions, when evidenced in a writing certified by any person appointed to

serve as Secretary or Chairman of the Board of the Company may be relied upon

by third parties for all purposes in respect of their dealings with the

Company.

 

After the Visa Ownership Period and thereafter so long as

Visa or any of its Affiliates shall own any of the total outstanding

Percentage Interests, Visa shall be entitled to appoint one (1) Manager, to

serve at the pleasure of Visa.

 

3.2 CONTROL BY BOARD. Subject to the provisions of Section

3.3, and except as may be otherwise expressly stated in this Agreement, the

Board shall have full and exclusive responsibility and authority for the

management, supervision and conduct of the business and affairs of the

Company and the Board is hereby granted the right, power and authority to do

on behalf of the Company all things determined thereby to be necessary or

desirable to carry out such duties and responsibilities, including (without

limitation) the right, power and authority from time to time to do the

following:

 

(a) to borrow money in the name and on behalf of the

Company, and to secure any such loans by a mortgage, pledge or other

encumbrance upon any assets of the Company;

 

(b) to cause to be paid all amounts due and payable by

the Company to any person or entity;

 

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

accountants, attorneys, consultants and other persons necessary or

appropriate to carry out the business and affairs of the Company, to delegate

by express Board action any powers of the Board enumerated herein (subject to

the provisions of Section 3.3), and to pay to such persons such fees,

expenses, salaries, wages and other compensation as it shall in its sole

discretion determine;

 

(d) to pay, extend, renew, modify, adjust, subject to

arbitration, prosecute, defend or compromise, upon such terms as it may

determine and upon such evidence as it may deem sufficient, any obligation,

suit, liability, cause of action or claim, including taxes, either in favor

of or against the Company;

 

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

expenditures which it deems necessary or appropriate in connection with the

organization of the Company, the management of the affairs of the Company and

the carrying out of its obligations and responsibilities under this Agreement;

 

(f) to the extent that funds of the Company are, in the

Board's judgment, not immediately required for the conduct of the Company's

business, temporarily to deposit the excess funds in such bank account or

accounts, or invest such funds in such interest-bearing taxable or nontaxable

investments, as the Board shall deem appropriate;

 

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(g) to acquire, prosecute, maintain, protect and defend

or cause to be protected and defended all patents, patent rights, trade

names, trademarks, copyrights and service marks, all applications with

respect thereto and all proprietary information which may be held by the

Company;

 

(h) to enter into, execute, acknowledge and deliver any

and all contracts, agreements or other instruments necessary or appropriate

to carry on the business of the Company as set forth herein;

 

(i) to acquire interests in such other entities as the

Board may deem appropriate to conduct the planned business activities of the

Company on such terms as the Board deems in the Company's interests;

 

(j) 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 Company, unless the same are contested by the Company;

 

(k) to make all elections and decisions of a tax and

accounting nature required or permitted on behalf of the Company, including

without limitation the election provided for by Section 754 of the Code; and

 

(l) to exercise all other powers conferred by the Act or

other applicable law on, or not prohibited to, a "Manager" of the Company

from time to time (as such term in defined in the Act).

 

3.3 SPECIAL ACTIONS. During the Visa Ownership Period, the

following actions by the Company shall require approval of at least eighty

percent (80%) of the then number of authorized Managers and the prior written

consent of Visa:

 

(a) appointment of the Chief Executive Officer of the

Company (or any other officer of the Company exercising such authority);

 

(b) any sale or transfer of all or substantially all of

the Company's assets to any third party;

 

(c) any withdrawal of any Member involving the

distribution with respect to such Member's Capital Account;

 

(d) any dissolution or winding up of the Company;

 

(e) any merger of the Company with another entity (other

than in connection with any roll-up or similar transaction in which the

substantive economic rights of the Members are not materially adversely

affected and all Members are affected in the same manner);

 

(f) any amendment or revision to the Operating Plan

including, without limitation, any annual update of the Operating Plan; or

 

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(g) any amendment to this Agreement in accordance with

Section 12.8.

 

Without limiting the foregoing, following the Visa

Ownership Period and thereafter so long as Visa or any of its Affiliates

shall own any of the total outstanding Percentage Interests, the actions

described in (b), (d), (e), (f) and (g) shall require the prior written

consent of Visa; if such action would adversely affect Visa in any manner

materially differently than the other Members.

 

3.4 EXTENT OF MANAGER'S OBLIGATIONS. Each Manager shall

devote such time and attention to the activities of the Company as are

reasonably necessary and appropriate to carry out the Manager's duties

hereunder. It is expressly acknowledged and understood that the Managers may

also devote time to the affairs of other entities and to other business

activities.

 

3.5 STANDARD OF CARE; INDEMNIFICATION. No Manager shall be

liable, in damages or otherwise, to the Company or to any of the Members for

any act or omission performed or omitted by such Manager pursuant to the

authority granted by this Agreement, except if such act or omission results

from gross negligence, willful misconduct or bad faith. The Company shall

save, indemnify, defend and hold harmless each Manager to the fullest extent

permitted by the Act, including without limitation, from and against any and

all claims or liabilities of any nature whatsoever, including, but not

limited to, reasonable attorneys' fees, arising out of or in connection with

any action taken or omitted by such Manager pursuant to the authority granted

by this Agreement, except where attributable to the gross negligence, willful

misconduct or bad faith of such Manager or such Manager's agents. Each

Manager shall be entitled to rely on the advice of counsel, public

accountants or other independent experts experienced in the matter at issue,

and any act or omission of such Manager in reliance on such advice shall in

no event subject such Manager to liability to the Company or any Member.

Each Member expressly acknowledges and agrees that other Members (and

Managers who may be related to such Members) may engage in activities

competitive with those of the Company, and may pursue business opportunities

that may also be available to the Company; and except as otherwise provided

herein or in the Operating Agreement or any other agreement among Members,

and except for any liability relating to the misuse or improper disclosure of

the Company confidential or proprietary information, no Member shall have any

liability as a fiduciary or otherwise in connection with the pursuit of such

activities.

 

3.6 COMPENSATION OF MANAGERS. The Managers shall receive no

other compensation for services to the Company apart from such reimbursement

and rights with respect to Company distributions and allocations of Profits

and Losses as set forth in Article VI.

 

ARTICLE IV

 

RIGHTS OF MEMBERS

 

4.1 NO AUTHORITY TO MANAGE. It is expressly understood that

no Member, in such Member's capacity as such, other than the Managers, shall

take part in the management or control of the business, transact any business

for the Company, have the right to vote on any Company matter, or have the

power to sign for or bind the Company to any agreement or

 

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document. Notwithstanding the foregoing, Members may participate in the

management of the Company if and to the extent so contemplated by the terms

of any employment relationship with the Company.

 

4.2 APPROVAL RIGHTS OF MEMBERS. Notwithstanding Section 4.1

or Article III of this Agreement, the Managers shall not amend the

Certificate in any manner that, if contained in an amendment to this

Agreement or an action described in Section 3.3, would require the Approval

of Members or the separate approval of Visa without first obtaining such

approval. Except as provided in this Section 4.2 or as may be otherwise

expressly provided under this Agreement or the Act, the Members shall not

have the right to approve any other actions or decisions of the Manager with

respect to matters relating to the Company.

 

4.3 RECORDS OF THE COMPANY. The Company shall make available

for inspection at its principal place of business, upon reasonable request

for purposes reasonably related to the interest of a person as a Member, any

of the following records of the Company: (a) a current list of the full

name, last known business or residence address, Capital Contribution and

Percentage Interests owned by each Member; and (b) such other books and

records as may be required to be provided to the Members pursuant to the Act

or other applicable law. The Members acknowledge that the records of the

Company constitute valuable trade secrets, and any information or records so

obtained or copied shall be kept and maintained in strictest confidence and

shall in no event be disclosed to any other parties without the written

consent of the Company.

 

ARTICLE V

 

ACCOUNTING, RECORDS, REPORTS AND MEETINGS

 

5.1 BOOKS OF ACCOUNTS AND RECORDS. The Company's books and

records and the Certificate shall be maintained at the principal office of

the Company and the Members and their designated representatives shall each

have access thereto at all reasonable times to the extent set forth in

Section 4.3. The books and records shall be kept in accordance with

generally accepted accounting principles applied in a consistent manner by

the Company and shall reflect all transactions and be appropriate and

adequate for the business of the Company.

 

5.2 FINANCIAL STATEMENTS AND REPORTS. The Company will

provide to the Members financial statements of the Company annually, which

shall be audited by independent auditors of national standing (which may also

be the independent auditors to any Member). The Company also will provide

within ninety (90) days after the end of each fiscal year of the Company a

copy of the Company's federal, state and local income tax or information

returns for such fiscal year and any other information reasonably necessary

for the preparation of the Members' federal and state income tax returns.

 

5.3 BANK ACCOUNT. Company moneys shall be deposited in the

name of the Company in one or more financial institutions to be designated by

the Board and may be withdrawn on the signatures of such officers of the

Company as the Board may designate from time to time.

 

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5.4 FISCAL YEAR. The fiscal year of the Company shall be

from January 1 to December 31, or such other period as may be required by law

or determined by the Board.

 

5.5 TAX ELECTIONS. The Board, in its sole discretion, shall

determine the Company's accounting methods and conventions under the tax laws

of the United States, the several states and other relevant jurisdictions as

to the treatment of income, gain, loss, deduction and credit of the Company

or any other method or procedure related to the preparation of such tax

returns. The Board, in its sole discretion, may cause the Company to make or

refrain from making any and all elections permitted by such tax laws

(including, without limitation, an election under Section 754 of the Code).

 

5.6 TAX MATTERS PARTNER. Pursuant to Section 6231(a)(7)(A)

of the Code, the Members hereby designate Yahoo as the Company's "Tax Matters

Partner." As such, for any fiscal year in which the Company is subject to

the provisions of Section 6221, et seq. of the Code, Yahoo is authorized, at

the expense of the Company, to represent the Company and each Member in

connection with all examinations of the Company's affairs by tax authorities,

including resulting administrative and judicial proceedings, and to expend

the funds of the Company for professional services and costs in connection

therewith. The other Members hereby agree to cooperate with the Manager and

to do or refrain from doing any and all acts reasonably required by the

Manager in connection with any such proceedings. Yahoo will at all times act

in accordance with the direction of the Board with respect to decisions to be

made by the Tax Matters Partner.

 

ARTICLE VI

 

ALLOCATIONS AND DISTRIBUTIONS

 

6.1 ALLOCATIONS OF COMPANY PROFITS AND LOSSES. Company

Profits and Losses for each fiscal year shall be allocated in proportion to

the Members' Percentage Interests.

 

6.2 SPECIAL ALLOCATIONS.

 

(a) If the Company ever has "partnership minimum gain"

or "partner minimum gain" (as defined by Treasury Regulations Section

1.704-2), then the rules of such Regulations regarding allocation and

chargebacks of such items shall apply.

 

(b) All deductions, losses, and Code Section

705(a)(2)(B) expenditures of the Company, as the case may be, that are

treated under Treasury Regulations Section 1.704-2(b) as attributable to

"partner nonrecourse debt" of the Company shall be allocated to the Members

bearing the risk of loss with respect to such liabilities in accordance with

such Treasury Regulations.

 

(c) If any Member unexpectedly receives an adjustment,

allocation, or distribution described in Treasury Regulations Section

1.704-1(b)(2)(ii)(d)(4), (5) or (6) which creates or increases a deficit in

such Member's Capital Account in excess of such Member's share of partnership

minimum gain and partner minimum gain (as determined under Treasury

 

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Regulations Section 1.704-2), if any, such Member shall be allocated items of

book income and gain in an amount and manner sufficient to eliminate or to

reduce, as quickly as possible, such deficit. For purposes of this Section

6.2(c), Capital Accounts shall be adjusted hypothetically as provided for in

Treasury Regulations Section 1.704-(b)(2)(ii)(d). The Members intend that

the provision set forth in this Section 6.2(c) shall constitute a "qualified

income offset" as described in such section of the Treasury Regulations and

this Section 6.2(c) shall be interpreted consistent with such intention.

 

6.3 TIME OF ALLOCATIONS. The Profit, Loss and other items of

the Company for each fiscal year shall be allocated to the Members' Capital

Accounts at the end of such fiscal year in accordance with the provisions of

Sections 6.1 and 6.2.

 

6.4 DISTRIBUTIONS.

 

(a) Tax Distributions shall be distributed to each

Member within ninety (90) days after the end of each fiscal year. Tax

Distributions to each Member under this subsection (a) shall be credited

against and shall reduce by a corresponding amount the next distributions to

which such Partner otherwise would be entitled under subsection (b) and

subsection (c) of this Section 6.4.

 

(b) To the extent that, after giving effect to Section

6.4(a), the Company has additional Distributable Cash for any fiscal year

commencing with the fiscal year ending December 31, 1996, such Distributable

Cash will be distributed to the Members in proportion to their respective

Percentage Interests within ninety (90) days following the end of such fiscal

year.

 

(c) Without limiting Section 6.4(a) or Section 6.4(b),

the Board, in its discretion, may, but shall not be obligated to, cause the

Company to distribute such other amounts, whether in cash or in kind, as the

Board may from time to time deem advisable. Distributions made pursuant to

this Section 6.4(c) shall be made to the Members in proportion to their

Percentage Interests at the time of such distribution.

 

(d) The Company shall withhold all such amounts as may

be required by law and any amounts so withheld shall be deemed to have been

distributed under this Section 6.4 to the Member with respect to whom such

withholding obligation arose and, to the extent such amounts exceed the

amount such Member would have otherwise received, shall be counted towards

and reduce by a corresponding amount, future distributions to such Member.

If any sums are withheld with respect to a Member, the Company shall remit

the sums so withheld to and file the required forms with the Internal Revenue

Service or other applicable government agency, and in the event of any

claimed over-withholding, the Member shall be limited to an action against

such government agency for refund and hereby waives any claim or right of

action against the Company on account of such withholding.

 

(e) Notwithstanding any other provision herein, no

distribution shall be made to the Members which would render the Company

insolvent.

 

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6.5 TAX RETURN. The Company shall, within ninety (90) days

after the end of each calendar year, file a federal income tax information

return and transmit to each Member a copy of such return and a schedule

(Schedule K-1 or successor schedule) showing such Member's distributive share

of the Company's income, deductions and credits.

 

6.6 ALLOCATION OF CERTAIN TAX ITEMS. If any property of the

Company is reflected in the Capital Accounts of the Members and on the books

of the Company at a Book Value that differs from the adjusted tax basis of

such property, then the tax items with respect to that property shall, in

accordance with Treasury Regulations Section 1.704-1(b)(4)(i), be shared

among the Members in a manner that takes account of the variation between the

adjusted tax basis of the applicable property and its Book Value in the same

manner as variations between the adjusted tax basis and fair market value of

property contributed to the Company are taken into account in determining the

Members' share of tax items under Code Section 704(c).

 

6.7 ALLOCATION BETWEEN TRANSFEROR AND TRANSFEREE. The

proportion of the income, gain, loss, deductions and credits of the Company

for any fiscal year of the Company during which any Percentage Interest in

the Company is transferred by a Member to another party pursuant to the terms

hereof that is allocable in respect of such Percentage Interest shall be

apportioned between the transferor and the transferee of the Percentage

Interest on the basis of the number of days during such fiscal year that each

is the owner thereof, without regard to (a) the results of the Company's

operations before or after the effective date of the transfer, or (b) any

distributions made to the Members before or after the date of the transfer.

 

6.8 TAX ALLOCATIONS BINDING. The Members are aware of the

income tax consequences of the allocations made by this Article VI and hereby

agree to be bound by the provisions of this Article VI in reporting their

shares of Company allocations for income tax purposes.

 

ARTICLE VII

 

TRANSFER OF INTERESTS

 

7.1 LIMITATIONS ON TRANSFERS. No Percentage Interest shall

be assigned or transferred by any Member, directly or indirectly, except as

follows:

 

(a) The members of the Visa Group may assign or transfer

all or part of their respective Percentage Interests only so long as (i) such

transfer shall be approved in advance by the holders of a majority of the

outstanding Percentage Interest (other than the member of the Visa Group

desiring to transfer its Percentage Interest) (which approval may be granted

or withheld in such approving Members' sole discretion and shall not be

required for any party that is a member of the Visa Group or an Affiliate of

Visa or an Affiliate of a member of the Visa Group so long as such

transferring Member remains liable for its obligations hereunder); (ii) in no

event shall Visa and its Affiliates at any time own less than fifty percent

(50%) of the Percentage Interests owned by all members of the Visa Group; and

(iii) such party shall assume in writing all obligations of the transferring

party under this Agreement and under the Operating Agreement.

 

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(b) Yahoo may assign or transfer all or part of its

Percentage Interest only so long as (i) such transfer, shall be approved in

advance by the holders of a majority of the outstanding Percentage Interests

(other than Yahoo) (which approval may be granted or withheld in such

Members' sole discretion and shall not be required for any party that is an

Affiliate of Yahoo so long as Yahoo remains liable for its obligations

hereunder); and (ii) such party shall assume in writing all obligations of

Yahoo under this Agreement and under the Operating Agreement.

 

(c) Any Member other than Yahoo or the members of the

Visa Group may transfer or assign all or part of their respective Percentage

Interest only so long as (i) any party to which such interest shall be

assigned or transferred shall not be a Competitor to the Company, Yahoo or

Visa; (ii) such transfer shall be approved in advance by the Board (which

approval may be granted or withheld in the Board's sole discretion); and

(iii) such party shall assume in writing all obligations of the transferring

party under this Agreement.

 

(d) Except as expressly set forth in the Operating

Agreement, no assignment or transfer of any Percentage Interest shall affect

any of the assigning or transferring party's obligations under the Operating

Agreement (which cannot be assigned without the written consent of the other

parties to the Operating Agreement).

 

7.2 RIGHTS OF FIRST REFUSAL. Without limiting the provisions

of Section 7.1:

 

(a) In the event of a contemplated assignment or

transfer by any member of the Visa Group to a party that is not a member of

the Visa Group or an Affiliate of Visa or an Affiliate of a member of the

Visa Group, the party proposing such transfer shall provide Yahoo with notice

of such proposed transfer, which notice shall include a description of all

terms of such transfer (including the amount to be transferred, the price to

be paid and the date of the proposed transfer), and the name, address and

telephone number of the proposed transferee. Yahoo shall have the right,

exercisable by notice within thirty (30) days following receipt of such

notice, to purchase all or part of the Percentage Interest to be transferred

upon the terms and conditions set forth in the notice. In the event that

Yahoo does not elect to purchase all or part of such Percentage Interest, the

transferring party shall be entitled to complete such transaction (on terms

no more favorable to the transferee in any respect) within thirty (30) days

following the end of such thirty (30) day period (and any transfer proposed

thereafter shall again comply with the foregoing notice and right of first

refusal provisions). Yahoo's right of first refusal may be assigned by Yahoo

to any Affiliate of Yahoo.

 

(b) In the event of and contemplated assignment or

transfer by Yahoo to a party that is not an Affiliate of Yahoo, the party

proposing such transfer shall provide the Visa Group with notice of such

proposed transfer, which notice shall include a description of all terms of

such transfer (including the amount to be transferred, the price to be paid

and the date of the proposed transfer), and the name, address and telephone

number of the proposed transferee. The Visa Group shall have the right,

exercisable by notice within thirty (30) days following receipt of such

notice, to purchase all or part of the Percentage Interest to be transferred

upon the terms and conditions set forth in the notice. In the event that the

Visa Group does not elect to purchase all

 

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or part of such Percentage Interest, the transferring party shall be entitled

to complete such transaction (on terms no more favorable to the transferee in

any respect) within thirty (30) days following the end of such thirty (30)

day period (and any transfer proposed thereafter shall again comply with the

foregoing notice and right of first refusal provisions). The Visa Group's

right of first refusal may be assigned to any Affiliate of Visa or any

Affiliate of a member of the Visa Group. The Visa Group shall be entitled to

allocate the Percentage Interest subject to the right of first refusal among

the members of the Visa Group at the Visa Group's discretion; provided that

in the absence of any other agreement the Percentage Interests subject to the

right of first refusal shall be allocated pro rata based upon the total

Percentage Interest held by all members of the Visa Group.

 

7.3 MANAGEMENT POOL. Notwithstanding anything to the

contrary in this Agreement, the Board, without the consent or approval of any

Member, may admit as Members executives of the Company and grant to them

portions of the Management Pool on such terms and conditions as the Board

deems appropriate. The allocation of the Management Pool among the executives

of the Company shall be subject to the approval of the Board.

 

7.4 SPECIAL BUY-OUT RIGHTS OF YAHOO.

 

(a) Yahoo shall have two options, exercisable in Yahoo's

sole discretion, to purchase Percentage Interests from the Visa Group. The

first option ("First Option") shall be exercisable by Yahoo in the period

starting on the first anniversary of the Effective Date and ending twelve

(12) months thereafter. The second option ("Second Option") shall be

exercisable by Yahoo during the period starting on the first anniversary of

the Effective Date and ending twenty-four (24) months thereafter. If Yahoo

elects to exercise either option, (i) it must do so within the appropriate

period or such option shall terminate and be of no further force and effect

and (ii) it may exercise each option only once for the amounts listed below.

 

(b) The First Option shall be exercised at a price of

[REDACTED]* and shall entitle Yahoo to purchase from the Visa Group

[REDACTED]* of the then outstanding Percentage Interests.

 

(c) The Second Option shall be exercised at a price of

[REDACTED]* and shall entitle Yahoo to purchase from the Visa Group

[REDACTED]* of the then outstanding Percentage Interest.

 

(d) The First Option and the Second Option shall be

reduced proportionately for any reduction in the Visa Group's Percentage

Interests below [REDACTED]* of all then outstanding Percentage Interests that

occurs at any time prior to the second anniversary of the Effective Date

except that the First Option and the Second Option shall not be reduced for

any reduction in the Visa Group's Percentage Interests that is a result of

(i) the creation of the Management Pool (such reduction in the Visa Group's

interest shall not be greater than four percent (4%) of all then outstanding

Percentage Interests) and (ii) the exercise by Yahoo of any purchase rights

granted in this Section 7.4. Any such reduction in the First Option and/or

the Second Option shall be applied equally to the First Option and to the

Second Option.

 

* Confidential treatment requested. Omitted portion filed

separately with the Commission.

 

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(e) Notwithstanding anything to the contrary contained

herein, in no event shall the exercise of the First Option or the Second

Option result in the Visa Group owning less than [REDACTED]* of the then

outstanding Percentage Interests. In such event the First Option and/or the

Second Option shall be reduced so that after exercise of the option(s) the

Visa Group shall own at least [REDACTED]* of the then outstanding

Percentage Interests. Any reduction in the First Option or the Second Option

required by this Section 7.4(e) shall be applied equally to the First Option

and the Second Option. No such reduction shall affect any prior exercise of

the First Option or the Second Option.

 

(f) Yahoo's purchase rights under this Section 7.4 may

be assigned in part by Yahoo to one or more third party investors none of

which is a Competitor of the Company or Visa; provided, however, that (i)

Yahoo may only assign rights to purchase Percentage Interest from the Visa

Group that represent cumulatively and in the aggregate less than a majority

of the Percentage Interests subject to such purchase rights and (ii) Yahoo

may not assign any of its non-economic rights set forth in this Agreement or

the Operating Agreement, including, without limitation, its rights to appoint

Managers to the Board or any of its rights of consent, approval or

disapproval.

 

(g) Yahoo shall exercise its purchase rights hereunder

through written notice within the time periods specified above to the member

of the Visa Group then holding the greatest Percentage Interest, and the Visa

Group shall be entitled to allocate the Percentage Interests to be purchased

in the Visa Group's discretion; provided that, in the absence of any other

agreement, the Percentage Interests to be purchased shall be allocated pro

rata based upon the total Percentage Interests held by all members of the

Visa Group. The date the Visa Group receives the written notice of Yahoo's

election to purchase a portion of the Visa Group's Percentage Interest shall

be the "Notice Date." Yahoo shall be deemed to have exercised any purchase

right granted in this Section 7.4 on the Notice Date related to such purchase

right. Any purchase by Yahoo under this Section 7.4 shall be completed

within thirty (30) days following the Notice Date; provided that such period

shall be extended to the extent required by applicable law (including,

without limitation, any delay required by the Hart-Scott-Rodino Antitrust

Improvements Act of 1976). The purchase price for Percentage Interests

purchased may be paid by Yahoo either in cash, shares of Yahoo Common Stock,

or a combination of both, as determined in Yahoo's sole discretion; provided

that any shares of Yahoo Common Stock shall be registered under the

Securities Act of 1933 (and qualified or exempt under any applicable state

blue sky authorities) in a manner permitting public resale no later than

ninety (90) days following the closing of the purchase of Percentage

Interests. The value of any shares of Yahoo Common Stock for these purposes

will be determined based upon the average closing price of such shares on the

NASDAQ Stock Market (or such other principal exchange or trading system upon

which such shares are traded or sale prices are quoted) for the thirty (30)

trading days preceding the closing of the purchase of Percentage Interests.

In the event that any shares issued by Yahoo in such transaction shall not be

registered for resale at the time of issuance, the total value of the shares

issued in such transaction (based upon the closing price on the second (2nd)

trading date preceding effectiveness of the registration statement) shall be

at least equal to the

 

* Confidential treatment requested. Omitted portion filed

separately with the Commission.

 

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purchase price provided herein, or Yahoo will issue sufficient additional

registered shares or pay the difference in cash.

 

ARTICLE VIII

 

DEATH, INCOMPETENCE OR DISSOLUTION OF A MEMBER

 

8.1 EFFECT ON COMPANY. The death, incompetence, dissolution

or Bankruptcy of a Member shall not entitle any Member to a return of capital

other than to the extent such Member normally would be entitled to a

distribution under the provisions of this Agreement. Such event shall not

cause a dissolution of the Company except as otherwise provided in Section

10.1.

 

8.2 RIGHTS OF PERSONAL REPRESENTATIVE. On the death,

incompetence, dissolution or Bankruptcy of a Member his or her personal

representative, executor, administrator, guardian or conservator shall have

all the rights of a Member for the purpose of settling such Member's estate,

or administering such Member's property, including the power of assignment.

 

ARTICLE IX

 

WITHDRAWAL

 

9.1 WITHDRAWAL OF MEMBERS.

 

(a) No Member may withdraw from the Company and receive

a distribution with respect to such Member's Capital Account unless such

withdrawal has received the Approval of Members holding a majority of all

Percentage Interest (disregarding for such purpose the Percentage Interest of

the withdrawing Member) and the Board as provided in Section 3.3 hereof.

 

(b) In the event of a withdrawal permitted hereunder,

the Percentage Interest in the Company of such Member shall terminate as of

such date and, subject to the provisions hereof, the former Member's Capital

Account (together with such Member's allocable share of Company Profits or

less such Member's allocable share of Company Losses through the date of

effectiveness of such withdrawal) shall be paid, subject to the provisions of

this Agreement, in cash or in kind, to such former Member within thirty (30)

days after the effective date of withdrawal.

 

ARTICLE X

 

DISSOLUTION, MERGER AND LIQUIDATION

 

10.1 EVENTS OF DISSOLUTION. Upon the determination of the

Board, as provided in Section 3.3 hereof (without any requirement of Approval

by the other Members), the Company will be dissolved and the assets shall

either be liquidated forthwith or the property shall be distributed in kind

to the Members after payment of the debts of the Company as determined by

agreement of the Members. The Company shall also dissolve upon the death,

incompetence,

 

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Bankruptcy, retirement, resignation or expulsion of any Member unless

Approval is provided by the remaining Members within ninety (90) days after

such event to continue the Company.

 

10.2 MERGER. The Company shall be merged with another entity

under applicable provisions of the Act if (and on such terms as) the Board in

its sole discretion deems appropriate (subject to the provisions of Section

3.3 hereof).

 

10.3 LIQUIDATION PROCEEDS. In settling accounts after

liquidation, the moneys of the Company shall be applied in the following

manner:

 

(a) The liabilities of the Company to creditors,

including Members who are creditors to the extent permitted by law, shall be

paid or otherwise adequately provided for except for liabilities of the

Company for distributions to Members.

 

(b) The remaining assets shall be distributed to the

Members in accordance with their positive Capital Account balances. If any

assets are to be distributed in kind, each Member's Capital Account shall

first be adjusted to reflect the Profits or Losses that would have been

allocated to such Member if such assets had been sold for cash at their fair

market value at the time of the distribution.

 

(c) In the event that any Member withdraws from the

Company in accordance with the provisions of this Agreement, such Member

shall be distributed an amount equal to such Member's Capital Account balance

as of the date of such withdrawal (taking into account all adjustments to

such Capital Account through the date of such withdrawal).

 

ARTICLE XI

 

CERTAIN SECURITIES RELATED MATTERS

 

11.1 INVESTMENT INTENT. Each Member hereby represents and

warrants to the Company and to the other Members that such Member's

Percentage Interest will be acquired for such Member's own account, for

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

distribution thereof, nor with any present intention of reselling or

distributing such Percentage Interest. Each Member fully understands that

the Company is relying upon the truth and accuracy of the foregoing

representations, and the representations that follow, to establish exemptions

from registration under the Securities Act of 1933 (the "Securities Act"),

and from registration or qualification under the California Corporate

Securities Law of 1986 and other applicable securities laws (the "Laws").

 

11.2 ABSENCE OF REGISTRATION. Each Member also hereby

represents that such Member understands that such Member must bear the

economic risk of such Member's investment in the Company for an indefinite

period of time because such Percentage Interest has not been registered under

the Securities Act or registered/qualified under the Laws and therefore

cannot be sold unless they are subsequently so registered and qualified or

exemptions from such registration and qualification are available, and the

Company is under no obligation to so register

 

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or qualify any Percentage Interest or to comply with any exemption and has no

current intention of so doing.

 

11.3 RESTRICTED SECURITIES; ABSENCE OF TRADING MARKET. Each

Member further hereby represents that such member understands that (a) such

member's Percentage Interest constitute "restricted securities" under the

Securities Act and that Rule 144 promulgated under the Securities Act is not

now available with respect to the transfer of such Member's Percentage

Interest and that there is no present likelihood that it will be available in

the future, (b) that there is no public market for such Percentage Interest

and there is no present likelihood that any such market will develop, and (c)

the Company is newly formed and has no earnings or operating history.

 

11.4 PREEXISTING RELATIONSHIP; INVESTMENT EXPERIENCE. Each

Member represents and warrants (a) that such Member has a preexisting

personal or business relationship with Yahoo and/or Visa and/or other members

of the Visa Group, as the case may be, such that such Member is aware of the

character, business acumen and general business and financial circumstances

of such parties, or (b) that either alone or with a purchaser representative,

such Member can bear the economic risk of the investment in the Company and

has such knowledge and experience in financial or business matters that such

Member is capable of evaluating the merits and risks of an investment in the

Company.

 

11.5 RESIDENCE. Each Member represents that such Member's

principal residence (or the location of such Member's executive office in the

case of a Member which is an entity) is located in the state of California.

 

11.6 ECONOMIC RISK. Each Member hereby represents that such

Member has adequate net worth and means for providing for such Member's

current needs and personal contingencies to sustain a complete loss of such

Member's investment, is able to bear such a loss, and that such Member has no

need of liquidity of such Member's investment.

 

11.7 RESALE. Each Member hereby represents such Member's

awareness that such Member's rights to transfer such Member's Percentage

Interest will be restricted by the Securities Act, the Laws, and this

Agreement; that any certificates or other documents evidencing such Member's

Percentage Interest may bear the legends relating to those restrictions which

are set forth herein; and that corresponding notations will be made by the

Company in its appropriate records.

 

11.8 CORPORATE POWER. Each Member hereby represents that it

has all requisite corporate power and authority to execute and deliver this

Agreement and the Operating Agreement.

 

11.9 AUTHORIZATION. Each Member hereby represents that all

corporate action on the part of such Member and its officers, directors and

stockholders, necessary for the authorization, execution and delivery of this

Agreement and the Operating Agreement, the performance of all obligations of

such Member hereunder and thereunder has been taken and this Agreement and

the Operating Agreement constitute valid and legally binding obligations of

such Member,

 

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enforceable in accordance with their respective terms except (i) as limited

by applicable bankruptcy, insolvency, reorganization, moratorium and other

laws of general application affecting enforcement of creditors' rights

generally and (ii) as limited by laws relating to the availability of

specific performance, injunctive relief, or other equitable remedies.

 

11.10 CONSENTS. Each Member hereby represents that no

consent, approval, qualification, order or authorization of, or filing with,

any local, state or federal governmental authority or other third party is

required on the part of such Member in connection with such Member's valid

execution, delivery or performance of this Agreement and the Operating

Agreement.

 

11.11 COMPLIANCE WITH OTHER INSTRUMENTS. Each Member

hereby represents that the execution, delivery and performance by such Member

of this Agreement and the Operating Agreement, and the consummation of the

transactions contemplated hereby and thereby will not result in any violation

or be in material conflict with or constitute, with or without the passage of

time or giving of notice, either (i) a material default under any provision

of any mortgage, indenture, agreement, instrument or contract to which it is

a party or by which it is bound or (ii) an event that results in the creation

of any material lien, charge or encumbrance upon any assets of such Member or

the suspension, revocation, impairment, forfeiture or nonrenewal of any

material permit, license, authorization or approval applicable to such

Member, its business or operations, or any of its assets or properties.

 

ARTICLE XII

 

MISCELLANEOUS

 

12.1 NOTICES. Except as otherwise provided herein, any notice

or other communication to be given hereunder shall be in writing and shall be

(as elected by the party giving such notice): (i) personally delivered; (ii)

transmitted by postage prepaid registered or certified airmail, return

receipt requested; (iii) transmitted by electronic mail via the Internet with

receipt being acknowledged by the recipient by return electronic mail (with a

copy of such transmission transmitted by postage prepaid registered or

certified airmail, return receipt requested); (iv) transmitted by facsimile

(with a copy of such transmission by postage paid prepaid registered or

certified airmail, return receipt requested); or (v) deposited prepaid with a

nationally recognized overnight courier service. Unless otherwise provided

herein, all notices shall be deemed to have been duly given on: (a) the date

of receipt (or if delivery is refused, the date of such refusal) if delivered

personally, by electronic mail, facsimile or by courier; or (b) three (3)

days after the date of posting if transmitted by mail. Either party may

change its address for notice purposes hereof on not less than three (3) days

prior notice to the other party. Notice hereunder shall be directed to a

Party at the address for such Party which is set forth on SCHEDULE 1 to this

Agreement.

 

12.2 EXECUTION IN COUNTERPARTS. This Agreement may be

executed in any number of counterparts with the same effect as if all parties

hereto had all signed the same document. All counterparts shall be construed

together and shall constitute one agreement.

 

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<PAGE>

 

 

12.3 ASSIGNABILITY. Without limiting the restrictions upon

assignment and transfer set forth herein, each and all of the covenants,

terms, provisions and agreements herein contained shall be binding upon and

inure to the benefit of the successors and assigns of the respective parties

hereto.

 

12.4 GENDER AND NUMBER. Whenever required by the context

hereof, the singular shall include the plural and the plural shall include

the singular. The masculine gender shall include the feminine and neuter

genders, and the neuter shall include the masculine and feminine.

 

12.5 CAPTIONS. Sections, titles or captions in no way define,

limit, extend or describe the scope of this Agreement nor the intent of any

of its provisions.

 

12.6 SEVERABILITY. Any provision of this Agreement that is

prohibited or unenforceable in any jurisdiction shall, as to such

jurisdiction, be ineffective to the extent of such prohibition or

unenforceability without invalidating the remaining portions hereof or

affecting the validity or enforceability of such provision in any other

jurisdiction.

 

12.7 INTEGRATION. This Agreement, together with the Operating

Agreement and all Counterparts, contain the entire agreement of the parties

with respect to the subject matter hereof, and supersedes all other

agreements or understandings of any kind (including, without limitation, the

Letter Agreement between Yahoo and Visa dated March 27, 1996).

 

12.8 AMENDMENTS.

 

(a) This Agreement may be amended by the Board (as

provided in Section 3.3 hereof) without the consent of any Member for the

purpose of adding provisions hereto or changing in any manner or eliminating

any of the provisions hereof or of modifying in any manner the rights and

obligations of the Members hereunder, in each case without the consent of any

other Member. Notwithstanding the foregoing, any such amendment which

materially and adversely affects any Member in a manner different from any

other Member shall require the Approval of such materially and adversely

affected Member.

 

(b) Each of the Members does hereby constitute and

appoint the Secretary of the Company (as directed by the Board) as such

Member's true and lawful representative and attorney-in-fact, in his name,

place and stead to make, execute, sign and file, the Certificate and any

amendments thereto in the office of the Secretary of State of the State of

Delaware which may be required because of this Agreement or the making of any

amendments or supplements thereto as provided in this Section 12.8 and to

make, execute, sign and file this Agreement and all amendments thereto and

all such other instruments, documents and certificates which, from time to

time, in the opinion of the Company's legal counsel, may be required, by the

laws of the United States of America, the State of Delaware or any other

jurisdiction in which the Company shall determine to do business, or any

political subdivision or agency thereof, or by this Agreement, or which such

legal counsel may deem necessary or appropriate to effectuate, implement and

continue the valid and subsisting existence and business of the Company.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

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<PAGE>

 

 

IN WITNESS WHEREOF, the undersigned have executed this

Agreement effective as of the date first written above.

 

FOUNDERS:

 

Yahoo! Inc., a California corporation

 

 

By: /s/ Timothy Koogle

-------------------------------------------

Title: President and CEO

----------------------------------------

 

Visa Marketplace, Inc., a Delaware corporation

 

 

By: /s/ Scott Randall

-------------------------------------------

Title: President

----------------------------------------

 

 

Sterling Payot Capital, L.P., a California

limited partnership

 

By: Sterling Payot Management, Inc., a

Delaware corporation, its general partner

 

 

By: /s/ Robert Smelick

--------------------------------------

Robert Smelick, Managing Director

 

 

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<PAGE>

 

SCHEDULE 1

 

Member Initial Cash Percentage

------ Contribution Interest

------------ --------

 

Yahoo! Inc. $ 550,000 55.0%

635 Vaqueros Avenue

Sunnyvale, CA 94086

Attn: President

Facsimile: (408) 328-3302

e-mail: tkoogle@yahoo.com

 

Copy to:

 

James L. Brock

Venture Law Group

2800 Sand Hill Road

Menlo Park, CA 94025

Facsimile: (415) 233-8386

e-mail: jbrock@venlaw.com

 

Visa Marketplace, Inc. $ 300,000 30.0%

900 Metro Center Boulevard

Foster City, CA 94404

Attn: Legal Department

Facsimile: (415) 432-2145

e-mail: konsta@ix.netcom.com

 

Copy to:

 

Mark Anderson

Farella Braun & Martel

235 Montgomery Street, 30th Floor

San Francisco, CA 94104

Facsimile: (415) 954-4480

e-mail: andersom@fom.com

 

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<PAGE>

 

Sterling Payot Capital, L.P. $ 150,000 15.0%

222 Sutter Street, 8th Floor

San Francisco, CA 94108

Facsimile: (415) 274-4545

e-mail: aversa@spcom.com

-------------- ------------

$1,000,000 100.0%

-------------- ------------

-------------- ------------

 

 

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