Exhibit 99.2
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LIMITED LIABILITY COMPANY AGREEMENT
OF
COMDISCO VENTURES FUND B, LLC
(A Delaware Limited Liability Company)
THIS LIMITED LIABILITY COMPANY AGREEMENT (the "Agreement") of Comdisco
Ventures Fund B, LLC (the "Company"), dated as of February 20, 2004 (the
"Effective Date"), is by and among Comdisco, Inc., a Delaware corporation
("CDI"), Windspeed Acquisition Fund GP, LLC, a Delaware limited liability
company ("Windspeed"), Windspeed Acquisition Fund, L.P. (the "Windspeed Fund"),
and any other Persons who become parties hereto after the effective date of
this Agreement. Certain terms used but not otherwise defined in this Agreement
have the meanings assigned to them in Section 17.
RECITALS
The parties hereto desire to organize and continue the Company as a
Delaware limited liability company within the meaning of the Delaware Limited
Liability Company Act (6 Del. C.ss.18-101, et seq.), as amended from time to
time (the "Act"), and any successor to such Act.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration the receipt and
legal sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Organization; Certificate; Name.
1.1 Organization. The Company shall be organized and
continued as a Delaware limited liability company in accordance with, and
subject to, the provisions of this Agreement.
1.2 Filings. The Members ratify and confirm the authority of
the Manager and any individual authorized by the Manager, acting singly in any
case, to execute, acknowledge, deliver, file and record in the appropriate
offices, as applicable, (i) the Certificate and any amendments thereto, and
(ii) such other instruments, certificates, documents and other writings which
the Manager determines to be necessary or appropriate to secure or preserve the
Company's status as a Delaware limited liability company or to qualify the
Company to do business in states other than Delaware.
1.3 Name. The name of the Company shall be "Comdisco Ventures
Fund B, LLC" or such other name as the Manager determines from time to time to
be appropriate.
1.4 Tax Partnership. The parties intend that the Company be
classified as a partnership, and that they be treated as partners, for tax
purposes.
2. Purpose. The Company's purpose shall be to make, manage and dispose
of investments in securities of Fund A Portfolio Companies (including, without
limitation, preferred stock, common stock, warrants, convertible debt
instruments, and other securities) and to do any and all things that are
ancillary or incidental thereto. In furtherance of such purpose, the Company
shall have the authority to: (a) negotiate, execute, deliver, perform, modify,
supplement, amend and terminate contracts, agreements, instruments, documents,
notices and other writings, including but not limited to purchase and sale
agreements, subscription agreements, stockholder agreements, investor rights
agreements, voting agreements, warrant and option agreements, exchange
agreements, merger agreements, lock-up agreements, underwriting agreements,
brokerage agreements, custodial agreements, escrow agreements, management
agreements, advisory agreements, promissory notes, pledge and other security
agreements, and exercise notices, (b) plan, structure, negotiate, coordinate,
effect and participate in financings (including, without limitation, by
offerings of debt and equity securities privately or publicly),
recapitalizations, restructurings, sales, mergers, liquidations and similar
transactions of Fund A Portfolio Companies, (c) exercise all rights, powers,
privileges and other incidents of ownership or possession with respect to
securities held by it (including, without limitation, to vote securities as to
the election of directors and other matters and to exercise any and all rights
and powers with respect to options, warrants and convertible securities held by
it), (d) pay or otherwise provide for its expenses, debts and obligations
(including, without limitation, the Management Fee), and make temporary
investments in Short Term Investments pending the use of its available cash to
pay expenses, debts and obligations or to make distributions to the Members,
(e) borrow money, and pledge assets to secure such borrowings on a short term
basis, (f) hire and compensate advisors, consultants, agents, contractors,
subcontractors, accountants, attorneys and other service providers, (g)
establish and maintain bank and other accounts and draw checks or other orders
or expenditures from such accounts, (h) purchase, acquire, finance, hold,
market and sell assets, (i) apply for and obtain insurance and (j) do any and
all other things that are ancillary or incidental to any of the foregoing.
3. Place of Business; Registered Agent. The principal place of
business of the Company shall be at 00 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx
00000. The Manager shall promptly provide the Members with written notice if
the Company's principal place of business is changed. The Company's registered
office in the State of Delaware shall be Corporation Trust Company, Corporation
Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx
00000. The registered agent for service of process on the Company in the State
of Delaware shall be Corporation Trust Company, Corporation Trust Center, 0000
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000. The Manager may
at any time change the location of the Company's principal place of business,
establish additional places of business and designate a new agent for service
of process as it shall deem advisable.
4. Term; Existence. The Company shall continue in full force and
effect from the Effective Date until dissolved pursuant to Section 14 (the
"Term").
5. Interests; Contributions; Capital Accounts.
5.1 Interests. As of the Effective Date, CDI, Windspeed and
the Windspeed Fund shall be admitted to the Company as Members holding the
classes of interest, and having the Capital Commitments, set forth opposite
their names on Schedule 1 attached hereto.
5.2 Capital Commitments and Contributions. Except as
otherwise expressly provided in this Agreement, the Members shall be obligated
to make contributions to the Company in aggregate amounts not exceeding their
respective Capital Commitments, when and as called for by Call Notices
delivered to them by the Manager. All calls for contributions shall be made to
the Members in proportion to the amounts of their respective unfunded Capital
Commitments. Amounts contributed by the Members may be used by the Company as
the Manager determines to be appropriate in connection with the Company's
business and affairs (including, without limitation, to fund investments made
by the Company and to pay or provide for the payment of the Management Fee and
other Company expenses and obligations); provided, however, that, after the
close of the period of three (3) consecutive years beginning on the Effective
Date (subject to extension for up to two (2) additional years with the approval
of the Manager and the Fund B Advisor) (such period, as it may be so extended,
the "Investment Period"), the Manager shall not call for further contributions
except (i) to pay Company expenses and obligations (including, without
limitation, the Management Fee), or (ii) to fund acquisitions of securities the
Company has committed to acquire, or is in the process of acquiring, as of the
close of the Investment Period; provided that, in no event shall the Members be
obligated to make contributions after the expiration of the Investment Period.
Notwithstanding the foregoing, with the approval of the Manager, Windspeed may
make additional contributions after the expiration of the Investment Period to
fund acquisitions solely by Windspeed of securities made to protect the value
of previously acquired securities positions. Except as otherwise provided in
this Section 5.2, the Manager shall have absolute discretion in determining
whether and when, and shall have no obligation, to call for contributions;
provided that, the Manager is acting in good faith and in a manner it believes
to be, or not opposed to, the best interests of the Company and the Members. No
Member shall be liable for any debts, liabilities, contracts or obligations of
the Company in excess of such Member's Capital Contribution. No Member shall be
liable for any debts, liabilities, contracts or obligations of any other
Member.
5.3 Draws from Escrow Account. Notwithstanding Section 5.2,
CDI's contributions to the Company shall be drawn by the Manager from the
Escrow Account, which shall be the exclusive means of funding CDI's Capital
Commitment (it being agreed that CDI shall have no obligation to make any
contributions using any of its other assets). To the extent that the amount
available in the Escrow Account is insufficient to satisfy any contribution due
with respect to CDI's interest, the Manager shall provide CDI with written
notice of such deficiency and shall provide CDI with the opportunity to fund
such deficiency. If CDI does not notify the Manager of its intention to fund
such deficiency within three (3) Business Days of receipt of such notice, then
the Manager will cause the Company to borrow the amount of such deficiency for
CDI's benefit from one (1) or more lenders (which may include the Manager, a
Member or an Affiliate of the Manager or a Member), or advance the amount of
such deficiency to CDI, on such terms and conditions (but at an interest rate
not exceeding ten percent (10%) per annum) as the Manager determines to be
appropriate. For purposes of determining the Members' Capital Contributions,
maintaining the Members' capital accounts and making allocations pursuant to
Section 6 and distributions pursuant to Section 7, the amount of any such
borrowing or advance shall be treated as having been contributed by CDI to the
Company as a Capital Contribution. All principal, interest and reasonable and
necessary costs (including, without limitation, attorneys' fees) with respect
to any such borrowing shall be paid (or reimbursed to the Company) from the
Escrow Account as soon as funds become available therein. The Manager shall be
entitled, in its sole discretion, to offset and reduce amounts that would
otherwise be distributable to CDI pursuant to Section 7 by any amounts so
loaned or advanced for the benefit of CDI to cover deficiencies in the Escrow
Account. The amount which CDI is required to deposit into the Escrow Account to
fund its Capital Commitment will be reduced by the amount of any such offset
(after deducting the portion of the offset attributable to interest on the
underlying loan or advance). At the request of the Manager, CDI shall provide
the lender of any amount borrowed pursuant to this Section 5.3 with a
non-recourse guaranty of such borrowing secured by its interests in the Company
and Fund A (and shall execute and deliver such agreements, documents,
instruments and other writings, and take such other actions, as the Manager may
reasonably determine to be appropriate to effect such guaranty and security
interests) but any such borrowings or advance shall be non-recourse to CDI.
5.4 Return of Unused Capital Contributions. Any contributions
held by the Company as of the last day of the Investment Period shall be
promptly distributed to the Members to the extent that such contributions are
not needed, as reasonably determined by the Manager, (i) to pay or fund
reserves to pay Company expenses and obligations (including, without
limitation, the Management Fee), (ii) to fund acquisitions of securities the
Company has committed to acquire, or is in the process of acquiring, as of the
close of the Investment Period, and (iii) with respect to the Class B Members
and in accordance with Section 5.2 to fund acquisitions solely by the Class B
Members of securities made to protect the value of previously acquired
securities positions. Any amounts retained pursuant to (i), (ii) or (iii) of
the preceding sentence shall be promptly distributed if they become no longer
needed for the purposes for which they were retained.
5.5 Additional Members. The Company shall not issue any
additional interests or admit any additional Members without the approval of
the Manager and the Class A Members. Nothing in this Section 5.5, however,
shall limit the rights of Members to Transfer their interests in the Company,
or to cause Transferees of their interests to be admitted as substituted
Members, pursuant to Section 11.
5.6 No Other Contributions. Except as provided by this
Section 5 or the Act, no Member shall be required to make any contribution of
cash, property or services, or to return any distributions received in
accordance with this Agreement, or to make any loan, to the Company or to any
creditor of the Company (including, without limitation, to restore a deficit
balance in such Member's capital account). No Member shall be liable for any
debts, liabilities, contracts or obligations of the Manager or any other
Member.
5.7 Capital Accounts. The Manager shall maintain capital
accounts for the Members in accordance with Section 704(b) of the Code and the
Treasury Regulations promulgated thereunder. In that regard, the Manager may
make such adjustments to the Members' capital accounts as it determines are
necessary and in accordance with the Treasury Regulations in connection with
any contribution to or distribution by the Company of more than a de minimis
amount of money or other property in exchange for an interest in the Company.
If a Member holds interests of more than one (1) class, separate capital
accounts shall be maintained for such Member for each such class of interests.
A Transferee of an interest in the Company shall succeed to the capital account
of its Transferor to the extent allocable, based on the terms of the Transfer,
to the Transferred interest.
5.8 Company Assets. All assets of the Company shall be owned
by the Company as an entity.
6. Allocations.
6.1 Net Operating Income or Loss. Subject to Sections 6.5 and
14, and after any special allocations required by Sections 6.3 and 6.4 have
been made, the Net Operating Income or Net Operating Loss, as the case may be,
for any fiscal year or other accounting period shall be allocated to the
Members in proportion to their respective Contribution Percentages.
6.2 Net Portfolio Profit or Loss.
6.2.1 Net Portfolio Profit. Subject to Sections 6.5
and 14, and after any special allocations required by Sections 6.3 and 6.4 have
been made, a Net Portfolio Profit of the Company for any fiscal year or other
accounting period shall be allocated as follows:
6.2.1.1 First, to the Members to the extent
of and in proportion to their negative Adjusted Capital Account Balances, if
any; and
6.2.1.2 Second, thereafter, to the Members
in such amounts and proportions as are necessary for their respective Adjusted
Capital Account Balances to equal their respective Target Capital Account
Balances as of the close of such fiscal year or other accounting period (or, if
such equalization is not possible, as are necessary to reduce proportionately
the differences between their respective Adjusted Capital Account Balances and
their respective Target Capital Account Balances).
6.2.2 Net Portfolio Loss. Subject to Sections 6.5
and 14, and after any special allocations required by Sections 6.3 and 6.4 have
been made, a Net Portfolio Loss of the Company for any fiscal year or other
accounting period shall be allocated as follows:
6.2.2.1 First, until the Members' Adjusted
Capital Account Balances have been reduced to zero (0), to the Members in such
amounts and proportions as are necessary for their respective Adjusted Capital
Account Balances to equal their respective Target Capital Account Balances as
of the close of such fiscal year or other accounting period (or, if such
equalization is not possible, as are necessary to reduce proportionately the
differences between their respective Adjusted Capital Account Balances and
their respective Target Capital Account Balances); and
6.2.2.2 Second, thereafter, to the Members
in proportion to their respective Capital Contributions.
6.3 Special Allocations. Before any allocations are made
pursuant to Section 6.1, Section 6.2 or Section 14 (as such Sections may be
modified by Section 6.5), the following special allocations shall be made in
the following order:
6.3.1 The Manager may make such special allocations,
and apply Sections 6.1 and 6.2 with such modifications, as it determines to be
appropriate (i) to comply with the rules set forth in the Treasury Regulations
under Section 704(b) of the Code governing (a) allocations of "nonrecourse
deductions," "partner nonrecourse deductions" and other items lacking "economic
effect" and (b) "minimum gain chargebacks" and "partner nonrecourse debt
minimum gain chargebacks," and (ii) for this Agreement to contain a "qualified
income offset" provision within the meaning of the Treasury Regulations under
Section 704(b) of the Code. In no event, however, shall any such special
allocations or modifications affect the amount or timing of any distribution to
be made to any Member hereunder.
6.3.2 To the extent an adjustment to the adjusted
tax basis of any asset of the Company pursuant to Section 734(b) or Section
743(b) of the Code is required, pursuant to Section 1.704-l(b)(2)(iv)(m) of the
Treasury Regulations, to be taken into account in determining capital accounts,
the amount of such adjustment to the capital accounts shall be treated as an
item of gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases the basis of the asset), and such gain or loss shall
be specially allocated to the Members in a manner that is consistent with the
manner in which their capital accounts are required to be adjusted pursuant to
Section 1.704-l(b)(2)(iv)(m) of the Treasury Regulations.
6.3.3 To the extent that any portion of the
Management Fee payment is determined by the Manager to be a distribution to any
Member and not a guaranteed payment within the meaning of Section 707(c) of the
Code (or a payment for services provided in a non-Member capacity), an amount
of gross income of the Company equal to the amount of such payment (and, to the
extent possible, of the same character as the income of the Company giving rise
to such payment) shall be specially allocated to such Member.
6.3.4 Any interest or other expense incurred by the
Company in connection with any borrowing made pursuant to Section 5.3 shall be
specially allocated to CDI.
6.4 Curative Allocations. The Members intend that their
capital account balances as of the time immediately before the liquidating
distributions are made pursuant to Section 14 equal the amounts of such
distributions to be made to them so that they have zero (0) balances in their
capital accounts after the liquidating distributions are made. Subject to the
requirements of Sections 6.3.1 and 6.3.2 (the "Regulatory Allocations"), the
Company shall make such special allocations of items of income, gain, loss,
deduction and expenditure as the Manager determines are required to give effect
to such intent (including, without limitation, to cure any imbalances that
might otherwise be caused by the Regulatory Allocations). The Manager may
reallocate items of income, gain, loss, deduction and expenditure for prior
open taxable years to give effect to such intent if it reasonably and in good
faith determines that such items for the current and future taxable years will
be insufficient to give effect to such intent.
6.5 Varying Interests. If any interest in the Company is
Transferred during any accounting period, allocations of Net Operating Income
or Loss, Net Portfolio Profit or Loss, and items of income, gain, loss and
deduction with respect to such interest for such period shall be made using
such method or methods (including, without limitation, an "interim closing"
method) as the Manager and the Class A Members (in accordance with Section 13)
determine to be appropriate and in compliance with Section 706 of the Code.
6.6 Tax Allocations. Tax allocations shall be made consistent
with the allocations of Net Operating Income or Loss and Net Portfolio Profit
or Loss made pursuant to Sections 6.1 and 6.2 and with any special allocations
made pursuant to Sections 6.3 and 6.4, except that, solely for tax purposes,
(i) items of income, gain, loss, deduction and expenditure with respect to
Company assets reflected hereunder in the Members' capital accounts and on the
books of the Company at values that differ from the Company's adjusted tax
bases in such assets shall be allocated among the Members in such manner, and
using such method or methods as the Manager determines to be appropriate (it
being agreed, however, that allocations made pursuant to this Section 6.6 on
account of book/tax disparities with respect to securities held by the Company
shall be made using the "traditional" method described in Section 1.704-3(b) of
the Treasury Regulations except as the Manager, with the approval of the Fund B
Advisor, determines to be appropriate), and (ii) any items of gain recognized
by the Company that are subject to the depreciation recapture provisions of
Sections 1245 and 1250 of the Code shall be allocated among the Members in such
manner as is necessary to comply with Sections 704, 1245 and 1250 of the Code
and any applicable Treasury Regulations thereunder.
6.7 Tax Credits. Any tax credits of the Company for any
fiscal year or other accounting period shall be allocated to the Members in
proportion to their allocations of the Company's Net Portfolio Profit or Loss,
as the case may be, for such fiscal year or other accounting period.
6.8 Tax Elections. The Company shall make such elections
under the Code and the Treasury Regulations (including, without limitation,
those permitted by Sections 704(b), 704(c), 709(b) and 754 of the Code), and
state tax or similar laws, as the Manager determines to be appropriate, except
as provided in Section 6.6.
6.9 Tax Matters Partner. Windspeed (or an Entity that has
become Manager pursuant to Section 8.1.3 upon the Transfer to it of Windspeed's
Class B interest in the Company) shall be the "Tax Matters Partner" of the
Company, as defined in Section 6231(a)(7) of the Code, for purposes of any tax
audit of the Company for as long as it is a Manager and the Class B Member. At
such time as neither Windspeed nor any such Transferee of its interest is the
Tax Matters Partner, a successor Tax Matters Partner shall be designated by the
Fund B Advisor in accordance with the Code and the Treasury Regulations. The
Tax Matters Partner shall have all of the rights, duties, obligations and
powers of a Tax Matters Partner, as so defined, under the Code, subject to
Section 8.3.8.
7. Distributions.
7.1 Operating Cash Flow; Net Portfolio Receipts.
7.1.1 Operating Cash Flow. Subject to Sections 7.2,
14, 15 and any legal or contractual restrictions on the Company's ability to
make distributions to the Members, the Manager shall make distributions by wire
transfer of any Operating Cash Flow, as promptly as it determines to be
appropriate (but not less frequently than quarterly), to the Members in
proportion to their respective Contribution Percentages.
7.1.2 Net Portfolio Receipts. Subject to Sections
5.3, 7.2, 14, 15 and any legal or contractual restrictions on the Company's
ability to make distributions to the Members, the Manager shall make
distributions by wire transfer of any Net Portfolio Receipts as promptly as it
determines to be appropriate (but not less frequently than quarterly) as
follows:
7.1.2.1 First, to all of the Members (Class
A and Class B) in proportion to their respective Contribution Percentages until
(i) the amount that has been distributed pursuant to this Section 7.1.2.1
(including so much of Sections 7.2 and 7.3 as relate to this Section 7.1.2.1)
for all fiscal years and other accounting periods equals (ii) the sum of the
Members' Capital Contributions less the sum of the amounts that have been
returned to the Members pursuant to Section 5.4;
7.1.2.2 Second, 90% to all of the Members
(Class A and Class B) in proportion to their respective Contribution
Percentages, and 10% to the Class B Member, until (i) the amount that has been
distributed to the Class A Members pursuant to this Section 7.1.2 (including so
much of Sections 7.2 and 7.3 as related to this Section 7.1.2) for all fiscal
years and other accounting periods equals (ii) (a) 1.8 times (b) the sum of the
Class A Members' Capital Contributions less the sum of the amounts that have
been returned to the Class A Members pursuant to Section 5.4;
7.1.2.3 Third, 80% to all of the Members
(Class A and Class B) in proportion to their respective Contribution
Percentages, and 20% to the Class B Member, until (i) the amount that has been
distributed to the Class A Members pursuant to this Section 7.1.2 (including so
much of Sections 7.2 and 7.3 as relate to this Section 7.1.2) for all fiscal
years and other accounting periods equals (ii) (a) 2.3 times (b) the sum of the
Class A Members' Capital Contributions less the sum of the amounts that have
been returned to the Class A Members pursuant to Section 5.4; and
7.1.2.4 Fourth, thereafter, 70% to all of
the Members (Class A and Class B) in proportion to their respective
Contribution Percentages, and 30% to the Class B Member.
7.2 Tax Distributions. Notwithstanding Section 7.1, the
Company shall use reasonable efforts to make advance distributions to the
Members within a reasonable period of time before taxes are due in such amounts
and proportions as are necessary for the distributions made with respect to
their interests (including to predecessor holders of such interests) for all
fiscal years and other accounting periods to equal their respective Tax
Liabilities as of the time of determination. Distributions pursuant to this
Section 7.2 shall be made in advance of the dates by which the corresponding
tax amounts are due. Any advance distribution to a Member pursuant to this
Section 7.2 shall offset an equal amount of distributions that would otherwise
thereafter be made to such Member pursuant to Section 7.1.2.
7.3 Distributions in Kind. Subject to Sections 14, 15 and any
legal or contractual restrictions on the Company's ability to make
distributions to the Members, the Manager may from time to time cause the
Company to distribute Marketable Securities in kind. Any in kind distribution
of a Marketable Security shall be made to the Members in accordance with
Section 7.1.2 as if such Marketable Security were an amount of Net Portfolio
Receipts equal to its value as determined pursuant to Section 7.4 (and, for
purposes of thereafter applying Section 7.1.2 or so much of any other provision
of this Agreement as relates to such Section, shall be treated as having been
distributed pursuant to such Section). For purposes of determining and
allocating Net Portfolio Profit, Net Portfolio Loss and other items pursuant to
Section 6, any Marketable Security that is to be distributed in kind shall be
treated as having then been sold by the Company for its value as determined for
purposes of applying this Section 7.3. Notwithstanding the foregoing, for so
long as CDI (or an Affiliate of CDI that has become a Class A Member upon the
Transfer to it of CDI's Class A interest in the Company) is a Class A Member,
the Manager will attempt to sell and convert into cash such Marketable
Securities for at least 180 days after such securities have attained the status
of Marketable Securities. The Manager may, in its discretion, distribute
Marketable Securities in kind to the Class B Member or any Class A Member other
than CDI (or any such affiliate thereof) during such 180-day period; provided
that the value of any such distribution to the Class B Member or any such Class
A Member other than CDI (or any such affiliate thereof) of a share of
Marketable Securities in kind shall be deemed to be the comparable per share
cash value of the cash distributions made to CDI (or any such affiliate
thereof) as a result of the disposition of such in kind Marketable Securities.
7.4 Valuation of Securities. The value of any security shall
be determined as provided in this Section 7.4.
7.4.1 Any security that is listed on a national
securities exchange shall be valued at its average last sale price as recorded
by the New York composite tape system over the ten (10) trading days
immediately preceding the date of such valuation or, if the security is not
included in such system, at its average last sale price over such ten (10)
trading days on the principal national securities exchange on which such
security is traded, as recorded by such exchange (using instead of the last
sale price, for any such day on which no sales occurred, the mean between the
closing "bid" and "asked" prices on such day as recorded by such system or such
exchange, as the case may be).
7.4.2 Any security that is listed on the Nasdaq
National Market shall be valued at its average last sale price over the ten
(10) trading days immediately preceding the date of such valuation as reported
by Nasdaq (using instead of the last sale price, for any day on which no sales
occurred, the mean between the closing "bid" and "asked" prices on such day as
reported by Nasdaq).
7.4.3 Any security that is not listed on a national
securities exchange or on the Nasdaq National Market but that is traded in the
over-the-counter market in the United States shall be valued at the average
mean between the closing "bid" and "asked" prices for the ten (10) trading days
immediately preceding the date of such valuation as reported by Nasdaq or, if
not so reported, as reported in the over-the-counter market in the United
States.
7.4.4 Any security in the form of an option, warrant
or similar security for which no price quotation is available shall be valued
by determining the value of the underlying security in accordance with Sections
7.4.1, 7.4.2, 7.4.3 or 7.4.5, as applicable, and subtracting therefrom the
exercise or conversion price of such security; and
7.4.5 Any security that is not subject to valuation
under any of the preceding provisions of this
Section 7.4 shall be assigned the value established for such security in the
last round of financing of the issuer of such security plus or minus any
adjustments which the Manager reasonably determines to be appropriate to
reflect market, issuer or other events that have occurred subsequent to such
last round of financing, all consistently applied.
The foregoing valuation methodologies contained in this
Section 7.4 will be used by the Manager for purposes of stating the fair value
for the period stated of the Company's Portfolio investments in the Company's
statement of Assets, Liabilities and Members' Capital as of the applicable
quarterly reporting date.
8. Management.
8.1 Manager.
8.1.1 The management and operation of the Company,
and the development and implementation of Company policies, shall be and hereby
are vested in the Manager, which shall be Windspeed unless and until it ceases
to serve as Manager pursuant to Section 8.1.3 or Section 8.1.4. Subject to
Section 8.3 and any other applicable limitations imposed by this Agreement, the
Manager shall have exclusive authority to exercise on behalf of the Company all
of the powers of the Company hereunder (including, without limitation, those
specified in Section 2) and to take such other actions as it determines are
necessary, advisable or incidental to the carrying on of the Company's business
and affairs. The parties agree that any Person serving as Manager hereunder
shall be a "manager" of the Company within the meaning of the Act (with the
rights, powers and duties in such capacity provided in this Agreement) for as
long as it so serves. In dealings with the Members, or with or on behalf of the
Company, the Manager shall act in good faith and in the manner it believes to
be, or not opposed to, the best interests of the Company and the Members. The
Manager and its individual members shall have fiduciary responsibilities,
solely with respect to the Members, as set forth under the Act and in
accordance with the terms of this Agreement in like manner and to the same
extent as if such persons served directly as individual Managers of the
Company.
8.1.2 A Manager shall serve until its successor
becomes Manager hereunder or, if earlier, until it ceases to serve as Manager
pursuant to Section 8.1.3 or Section 8.1.4. If a Manager ceases to serve as
such for any reason (other than, in the case of Windspeed, by its Transfer of
its Class B interest in the Company to another Entity that is Controlled by any
two (2) or more of the individuals comprising the Windspeed Team and that
thereupon becomes the Manager as provided in Section 8.1.3), any vacancy
thereby created may be filled by a Person designated by the Class A Members in
accordance with Section 13. Except as otherwise expressly provided in this
Agreement, the cessation of any Member-Manager's service as Manager shall not,
in and of itself, affect its rights, or constitute its withdrawal, as a Member.
8.1.3 A Manager may not resign without the approval
of the Class A Members in accordance with Section 13; provided, however, that
upon any Transfer by Windspeed pursuant to Section 11 of its Class B interest
in the Company to an Entity Controlled by any two (2) or more of the
individuals comprising the Windspeed Team, such Entity shall become the Manager
upon its admission to the Company as a substituted Class B Member.
8.1.4 A Manager may not be removed except by vote of
the Class B Members.
8.1.5 Until the termination of the Company,
Windspeed and at least two (2) of the individuals comprising the Windspeed Team
shall devote to the Company such time and resources and maintain such staffing
as are reasonably necessary and appropriate to administer and conduct the
Company's affairs in accordance with the terms hereof and in a manner intended
to conform to the best interest of the Company.
8.2 Fund B Advisor.
8.2.1 The Class A Members may from time to time
appoint, in accordance with Section 13, an individual to act as the Fund B
Advisor hereunder (the "Fund B Advisor"). A Fund B Advisor may (i) resign upon
at least thirty (30) days' written notice to the Class A Members and (ii) be
removed at any time, for any reason or no reason, by the Class A Members in
accordance with Section 13. Any vacancy created by the resignation, removal or
other event with respect to a Fund B Advisor may be filled by the Class A
Members in accordance with Section 13.
8.2.2 The Manager shall not take any action
expressly requiring the approval of the Fund B Advisor hereunder without such
approval or, if there is then no Fund B Advisor, the approval of the Class A
Members in accordance with Section 13. In addition, the Manager shall consult
with the Fund B Advisor regarding potential conflicts of interest and other
matters as the Manager from time to time determines to be appropriate. The
Manager shall promptly consider in good faith (without being obligated to
comply with) any recommendations that are promptly made by the Fund B Advisor
in response to any matter submitted to it. Because of the relative interest of
CDI in the Company and Fund A, the Manager acknowledges its fiduciary duty to
CDI to maximize the value of CDI's interest in the Company after considering
the recommendations of the Fund B Advisor and consistent with its duties to the
members of Fund A.
8.2.3 Except in its capacity as Manager, liquidating
trustee or other authorized service provider, no Member shall have any
authority to act for or on behalf of the Company or any other Member or to bind
the Company or any other Member in any way, to pledge the Company's credit or
to render the Company liable for any purpose.
8.3 Actions Requiring Member Approval. Notwithstanding
Section 8.1, and in addition to any other matters requiring the approval of
some or all of the Members hereunder, without the approval of the Fund B
Advisor (or, if there is then no Fund B Advisor, the Class A Members in
accordance with Section 13), the Manager shall have no authority to:
8.3.1 cause the Company to engage in a transaction
that would result in a Fund A security being converted into a new series
security and then Transferred to the Company by reason of a direct investment
by the Company directly attributable to the security of the Fund A Portfolio
Company being Transferred;
8.3.2 cause the Company to acquire any asset other
than follow-on or exercised securities in Fund A Portfolio Companies;
8.3.3 delegate or assign any of its obligations as
Manager hereunder other than as permitted by Section 8.6;
8.3.4 cause the Company to merge or consolidate with
or into any other Entity or change its form of organization (including, without
limitation, for tax purposes);
8.3.5 cause the Company to pay any compensation to,
or engage in any transaction with, the Manager or an Affiliate of the Manager
except as provided herein;
8.3.6 cause the distribution of any Marketable
Securities in kind except in accordance with Section 7.3;
8.3.7 cause the Company to borrow money or pledge
assets to secure such borrowing except in accordance with Section 5.3; or
8.3.8 act, elect, report or otherwise exercise its
duty or authority as the Tax Matters Partner with respect to Company tax
matters.
8.4 Administrative Responsibilities. In addition to its other
responsibilities hereunder, the Manager shall be responsible for providing the
administrative and operating support the Company requires in connection with
its business and affairs, including, without limitation, (i) the filing of such
documents, instruments, certificates and other writings as are necessary or
appropriate for the continuation of the Company as a limited liability company
under the laws of the State of Delaware (and for the qualification of the
Company to do business in states other than Delaware where the Manager
determines such qualification to be necessary), (ii) preparing and filing any
and all tax returns and other governmental filings in connection with the
Company's affairs, (iii) maintaining the books and records of the Company in
accordance with the Act, (iv) maintaining the documentation and records
relating to securities held by the Company, including the administration and
tracking of all warrant and other antidilution rights, stock splits and other
terms related to new rounds of financing of Fund A Portfolio Companies, (v)
investigating, reviewing and effecting transactions involving securities held
by the Company, (vi) leveraging its industry knowledge and relationships to
identify attractive follow-on investment opportunities, and (vii) satisfying
the Company's needs for office space, supplies and general office support and
services.
8.5 Management Fee. The Company shall pay the Manager a
management fee (the "Management Fee"), which shall be payable quarterly in
advance over the period of five (5) consecutive years beginning on the
Effective Date. For each quarter, the Management Fee payment due the Manager
shall equal .625% of the sum of the Members' Capital Contributions, less the
sum of the amounts that have been returned to the Members pursuant to Section
5.4, as of the first day of such quarter. The Management Fee payments due the
Manager are in addition to any amounts distributable to the Manager, in its
capacity as a Member, pursuant to Section 7.
8.6 Assignment. With the approval of the Class A Members in
accordance with Section 13, the Manager may delegate or assign any or all of
its duties and responsibilities (and its rights to receive any or all of the
Management Fee) hereunder, including, without limitation, pursuant to a
separate management contract between the delegee and the Company. The Class A
Members (in accordance with Section 13) shall not unreasonably withhold their
approval of any such delegation or assignment if the delegee or assignee is an
Entity Controlled by any two (2) or more of the individuals comprising the
Windspeed Team.
8.7 Other Activities of Manager. Notwithstanding any other
provision of this Agreement and subject to Section 8.1.5, the Manager may
engage in other profit-seeking and business ventures of any kind, nature or
description (including, without limitation, making and managing investments in
securities for its own account or the account of others), independently or with
others, and the pursuit of such ventures by the Manager shall not be deemed
wrongful or improper. Neither the Company nor any Member shall have any rights
or obligations by virtue of this Agreement or the relationship established
hereby in or to any independent ventures of the Manager or the profits or
losses derived therefrom.
8.8 Evidence of Authority. Any Person dealing with the
Company may rely upon a certificate signed by the Manager as to:
8.8.1 the existence or non-existence of any fact or
facts which constitute conditions precedent to acts by the Manager or in any
other manner germane to the affairs of the Company; and
8.8.2 the Person or Persons who are authorized to
execute and deliver any instrument or document of the Company or to take any
action on behalf of the Company.
9. Fees and Expenses.
9.1 Company Expenses. Subject to Section 8.3, and except as
provided in Section 9.2, the Company shall pay, or reimburse the Manager for,
all fees and expenses incurred in connection with the Company's business and
operations, including, without limitation:
9.1.1 expenses (including, without limitation,
legal, accounting, filing and other fees) incurred by the Company or the
Manager in connection with the formation, dissolution or termination of the
Company (it being agreed, however, that the organizational expenses payable by
the Company shall not exceed $50,000 without the approval of the Class A
Members in accordance with Section 13);
9.1.2 expenses incurred in connection with the
administration of the Company (including, without limitation, costs and fees in
connection with the preparation and filing of periodic reports and
certificates) or the protection and enhancement of the value of the Company's
assets, including, without limitation, the Management Fee and fees paid to
consultants, custodians, outside counsel, accountants, insurers, investment
bankers and other similar outside advisors and service providers;
9.1.3 fees and out-of-pocket costs of evaluating,
negotiating, structuring, documenting and effecting transactions by the
Company, including finders, placement, brokerage, accounting, legal, investment
banking and other fees;
9.1.4 taxes, fees or other governmental charges
levied against the Company or on its income or assets or in connection with its
business or operations;
9.1.5 costs of litigation and similar matters
(including matters that are the subject of indemnification pursuant to Section
10); and
9.1.6 costs of winding up and liquidating the
Company.
9.2 Fees and Expenses Payable by the Manager. Notwithstanding
Section 9.1, the Company shall not be obligated to pay (except indirectly via
the payment of the Management Fee) the routine overhead/administrative expenses
of the Company or the Manager relating to maintaining books and records,
travel, routine operational accounting (such as tracking capital accounts,
determining and distributing Net Portfolio Receipts, routine tax return
preparation costs of up to $5,000 per year, and periodic reporting to Members),
office space, supplies, salaries, general office support and the like (it being
the intent that such expenses are to be paid by the Manager out of the
Management Fee).
9.3 Source of Payments. No Member shall be required to make
any contributions, or return distributions received, to the Company to enable
the Company to satisfy its obligations to pay its fees and expenses (including,
without limitation, the Management Fee).
10. Liability; Indemnification. No Member or Manager shall be liable,
responsible or accountable to the Company or any Member for any loss or damage
incurred by reason of any act or omission of such Member or Manager performed
or omitted on behalf of the Company or in furtherance of the interests of the
Company without bad faith, fraud, gross negligence or willful misconduct. To
the fullest extent permitted by law, and notwithstanding any other provision of
this Agreement, the Company shall indemnify the Members, the Managers and any
officers for, and shall hold them harmless from and against, any and all
damages, losses, liabilities, fines, penalties, amounts paid in settlement,
costs and expenses (including attorneys' fees and expenses) actually and
reasonably incurred by them in connection with any threatened, pending or
completed demands, claims, actions, suits or proceedings, whether civil,
criminal, administrative or investigative, brought or threatened against them
by reason of or in connection with actions taken or omitted to be taken by them
on behalf of the Company, provided that no Member or Manager shall be entitled
to indemnification hereunder for any damage, loss, liability, fine, penalty,
amount paid in settlement, cost or expense incurred by such Member or Manager
as a result of its bad faith, fraud, gross negligence or willful misconduct.
Expenses (including attorneys' fees) incurred by a Member or Manager in
defending any civil, criminal, administrative or investigative action, suit or
proceeding shall be paid by the Company in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by or on behalf
of such Member or Manager to repay such amount if it is ultimately determined
that such Member or Manager is not entitled to be indemnified by the Company
pursuant to this Section 10. The cessation of a Member's or Manager's status as
such shall not prevent such Member or Manager from being indemnified hereunder
for actions taken or omitted while acting in such capacity.
11. Transfers.
11.1 Restrictions on Transfer. A Member may not Transfer any
interest in the Company without the express written consent of the Manager and
each of the other Members; provided, however, (i) that the consent of the
Manager and the other Members pursuant to this Section 11.1 shall not be
required if such Transfer (a) is made by CDI in accordance with Section 11.2 or
Section 11.3, (b) will not violate or fail to comply with any federal or state
securities law or regulation, (c) will not cause the Company to be treated as a
"publicly traded partnership" as defined in Section 7704(b) of the Code, (d)
will not cause the Company to be an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, (e) will not cause the assets
of the Company or any part thereof to be treated as assets of any employee
benefit plan or trust subject to ERISA, and (f) will not constitute a
prohibited transaction within the meaning of Section 406 of ERISA or Section
4975 of the Code, and (ii) that the Manager and the other Members may not
unreasonably withhold their consents (if required) to any Transfer of an
interest in the Company by an Entity to another Entity that directly or
indirectly Controls, is Controlled by or is under common Control with the
Transferring Entity if (a) in the case of a Transfer by a Class A Member, the
Manager has determined that the funding of such Class A Member's Capital
Commitment has been adequately provided for (including, without limitation,
through the use of the Escrow Account) or (b) in the case of a Transfer by a
Class B Member, the Transferee is Controlled by any two (2) or more of the
individuals comprising the Windspeed Team. The Manager, in its sole discretion,
may require any Member (or unadmitted assignee of a Member) who proposes to
make any Transfer not requiring consents under this Section 11.1 to provide the
Company with a legal opinion reasonably satisfactory to the Manager that such
Transfer will comply with applicable securities laws. In its sole discretion,
the Manager may disregard as void any Transfer made in violation of this
Section 11.1. Notwithstanding anything to the contrary contained herein, no
consent or legal opinion will be required in connection with a Transfer of an
interest in the Company by CDI to an Affiliate.
11.2 Right of First Offer. Notwithstanding the consent
requirements of Section 11.1 (but subject to the other provisions thereof),
CDI may Transfer its interest (or any portion thereof) in compliance with the
following procedures:
11.2.1 If CDI (the "Selling Member") proposes to
Transfer all or any portion of its interest in the Company to any Person other
than an Affiliate of CDI, such Selling Member shall give notice of its intent
to make such Transfer (the "Transfer Notice") to the Manager. The Transfer
Notice shall set forth (i) the portion of the Selling Member's interest to be
Transferred (the "Offered Interest") and (ii) if known to the Selling Member,
the identity of the prospective Transferee and the material terms of the
proposed Transfer to the prospective Transferee.
11.2.2 The Manager shall have the right, but not the
obligation, to deliver to the Selling Member, before the close of the ten (10)
day period after the delivery of the Transfer Notice to the Manager (such
period, the "Offer Period"), a written offer (an "Offer") to purchase the
Offered Interest. An Offer shall set forth all of the material terms and
conditions of the proposed purchase of the Offered Interest. The Manager's
rights to make the Offer and to purchase the Offered Interest pursuant thereto
shall be assignable by the Manager to such one (1) or more Persons as the
Manager determines to be appropriate (subject to compliance by the Manager with
the provisions of Section 11.1 as if such rights were an interest in the
Company). During the Offer Period, the Selling Member shall not solicit
proposals or offers from, or engage in discussions with, other parties
regarding the sale of the Offered Interest.
11.2.3 The Selling Member shall have no obligation
to accept an Offer by the Manager (or its assignee). Any closing of the
purchase of the Offered Interest by the Manager (or its assignee), however,
shall take place on such date, and at such time and place, as the Selling
Member and the Manager (or its assignee) shall agree upon. At such closing, the
Manager (or its assignee) shall make such deliveries in payment for the Offered
Interest as are contemplated by the Offer, and the Selling Member shall deliver
such executed documentation (including, without limitation, any required
consents) to the Manager (or its assignee) as may be required to effect the
Transfer of the Offered Interest to the Manager (or its assignee) and the
admission of the Manager (or its assignee) as a substituted Member with respect
to the Offered Interest. All of the foregoing deliveries shall be deemed to be
made simultaneously and none shall be deemed completed until all have been
completed.
11.2.4 If the Manager (or its assignee) does not
purchase the Offered Interest in accordance with Section 11.2.3, then, subject
to Section 11.1, the Selling Member shall be entitled to Transfer the Offered
Interest to a third party Transferee at any time during the one hundred fifty
(150) day period after the delivery of the Transfer Notice. If the Offered
Interest (or any portion thereof) has not been Transferred within such one
hundred fifty (150) day period, no Transfer of any portion of the Offered
Interest shall be effective unless the Selling Member has again complied with
the provisions of this Section 11 as to the Offered Interest. As a condition to
the effectiveness of any Transfer of the Offered Interest to a third party
Transferee pursuant to this Section 11.2.4, (i) such Transferee shall (a)
execute and deliver such documents and agreements as the Manager reasonably
determines to be appropriate to effect such Transferee's agreement to be bound
by the terms and conditions of this Agreement and (b) take such other actions
as the Manager may reasonably determine to be necessary to effect the admission
of such Transferee to the Company, to qualify the Company to conduct business
or to preserve the limited liability status of the Members, and (ii) the
Selling Member and the Transferee shall execute and deliver such documents and
agreements, and take such other actions, as the Manager may reasonably require
to ensure that the funding of such Selling Member's Capital Commitment has been
adequately provided for (including, without limitation, through the use of the
Escrow Account).
11.3 Put Option. Notwithstanding any other provision of this
Agreement, CDI shall have the right but not the obligation to require the
Manager to purchase its interest in the Company as provided in this Section
11.3.
11.3.1 Subject to Section 11.3.2, CDI's put option
shall be exercisable during a six (6) month period of its choice between the
two and a half (2 1/2) year and three and a half (3 1/2) year anniversary of
the Effective Date (such six (6) month period, the "Put Period"). The Manager
shall provide notice (the "Reminder Notice") to CDI on or about twenty-seven
(27) months after the Effective Date stating that CDI must elect the Put
Period. CDI will be required to specify the Put Period in a written notice (the
"Put Period Notice") delivered to the Manager by the two and a half (2 1/2)
year anniversary of the Effective Date. If CDI does not deliver the Put Period
Notice by the two and a half (2 1/2) year anniversary of the Effective Date,
then CDI shall be deemed to have elected as the Put Period the six (6) month
period ending on the third anniversary of the Effective Date. Notwithstanding
the preceding sentences, if the Manager does not deliver the Reminder Notice to
CDI on or about twenty-seven (27) months after the Effective Date, then CDI
may, in its sole discretion, extend the commencement date of the Put Period and
the date by which it must deliver the Put Period Notice by the number of days
that elapse after the date that is twenty-seven (27) months after the Effective
Date but before the date on which the Manager delivers the Reminder Notice.
11.3.2 Notwithstanding Section 11.3.1, CDI's put
option shall be exercisable at any time from and after (i) the dissolution of
the Company as provided in (ii) of Section 14.1 or the dissolution of Fund A as
provided in (ii) of Section 14.1 of the Fund A Agreement, (ii) the removal of
Windspeed as "Manager" (as defined in the Fund A Agreement) of Fund A for
"Cause" (as defined in the Fund A Agreement) pursuant to Section 8.1.4 of the
Fund A Agreement (or such a removal for Cause of an Entity that has become
"Manager" of Fund A pursuant to Section 8.1.3 of the Fund A Agreement upon the
Transfer to it of Windspeed's interest in Fund A), or (iii) the occurrence of
any event as a result of which (a) the Manager is neither Windspeed nor an
Entity that has become Manager pursuant to Section 8.1.3 upon the Transfer to
it of Windspeed's Class B interest in the Company or (b) at least two (2) of
the individuals comprising the Windspeed Team are no longer actively committed
to the Manager in accordance with Section 8.1.5.
11.3.3 To exercise its put, CDI shall deliver
written notice (the "Put Exercise Notice") thereof to the Manager at least
thirty (30) days before any quarterly reporting date under Section 16.3.2
included in the Put Period selected by CDI; provided, however, that if CDI is
exercising its put option under Section 11.3.2, CDI may deliver the Put
Exercise Notice within 60 days following CDI's receipt of written notice of the
occurrence of an event which causes such put option to become exercisable under
Section 11.3.2.
11.3.4 Subject to Section 11.3.5, the price payable
to CDI upon the exercise of its put shall be (i) CDI's share of the Members'
Capital as shown on the unaudited statement of Assets, Liabilities and Members'
Capital delivered pursuant to Section 16.3.2 as of the quarterly reporting date
immediately following the delivery of the Put Exercise Notice, less (ii)
without duplication of costs taken into account in determining Members' Capital
under (i), reasonable and necessary legal and administrative costs incurred to
exercise the put, subject to a cap of $50,000 for such costs (the "Put Price").
11.3.5 A closing of the purchase of CDI's interest
by the Manager shall be held at such time and place, and on such date within
thirty (30) days after the quarterly reporting date under Section 16.3.2
immediately following the delivery of the Put Exercise Notice pursuant to
Section 11.3.3, as are mutually agreeable to the Manager and CDI. At the
closing, the Manager shall make a cash payment to CDI equal to the Put Price
(and CDI shall deliver to the Manager such executed documentation, including,
without limitation, any required consents, as may be required to effect the
Transfer of the purchased interest to the Manager and the admission of the
Manager as a substituted Member with respect to such interest); provided,
however, that, to the extent the Put Price exceeds $1,500,000, the Manager
shall be obligated to purchase (for $1,500,000) only that portion of CDI's
interest determined by dividing $1,500,000 by the Put Price (it being agreed,
however, that the Manager shall have the right to purchase up to the remaining
portion of CDI's interest for the additional portion of the Put Price
corresponding to the additional portion purchased.
11.3.6 If CDI exercises its put option, any amounts
remaining in the Escrow Account as of the date of the closing shall be
distributed to CDI, except to the extent necessary to fund its Capital
Commitment with respect to any interest it retains.
11.4 Assignees. Unless and until a Person who has acquired an
interest in the Company by any form of Transfer has been admitted to the
Company as a Member, such Person shall have the status of an unadmitted
assignee of such interest and, as such, shall have none of the rights and
powers of a Member hereunder or under the Act (including, without limitation,
to vote, give consents or approvals, access Company records or otherwise manage
or participate in the affairs of the Company) other than to receive the
distributions and allocations that such Person's predecessor would have been
entitled to receive hereunder with respect to such interest. A Member who
Transfers its entire interest in the Company shall cease to have any of the
rights and powers of a Member. Notwithstanding anything herein to the contrary,
the Company shall be entitled to treat the record holder of any interest as the
absolute owner thereof in all respects, and shall incur no liability for
distributions made in good faith to such record holder, until such time as it
has received written notice of such Transfer and all of the conditions to the
effectiveness of such Transfer hereunder have been satisfied. A Person who
acquires an interest in the Company (by any form of Transfer) but is not
admitted as a substituted Member may not Transfer all or any portion of such
interest without complying with this Section 11 in full as if such Person were
a Member for such purpose.
11.5 Substituted Members. A Person who acquires an interest
in the Company by any form of Transfer shall be admitted to the Company as a
substituted Member only (i) with the consent of the Manager and each of the
other Members, (ii) by satisfying the applicable requirements of Sections 11.1
and 11.2, (iii) by executing and delivering such documents and agreements as
the Manager reasonably determines to be appropriate to effect such Person's
agreement to be bound by the terms and conditions of this Agreement, and (iv)
if necessary, upon an amendment to this Agreement or such other instrument,
executed by all necessary parties and filed or recorded in the proper records
of each jurisdiction in which such recordation is necessary to preserve the
limited liability status of the Members; provided, however, that the Manager
and the other Members (a) shall have no rights to consent to the admission
pursuant to this Section 11.5 of any Transferee of an interest in the Company
if they had no rights to consent to the Transfer of such interest to such
Transferee under Section 11.1 and (b) may not unreasonably withheld their
consents to the admission pursuant to this Section 11.5 of any Transferee of an
interest in the Company if they could not unreasonably withhold their consents
to the Transfer of such interest to such Transferee under Section 11.1. The
admission of a substituted Member shall not dissolve the Company and shall be
shown in the books and records of the Company. The Manager shall promptly
provide the Members with written notice of the admission of any substituted
Member.
11.6 Rights of Representatives. Notwithstanding any other
provision of this Agreement, if an individual Member that is an Entity is
dissolved or terminated, the powers of such Member may be exercised by its
personal representative to the extent required by the Act.
11.7 Costs and Expenses. Any costs or expenses incurred by
the Company in connection with any Transfer or proposed Transferor of an
interest in the Company shall be paid or reimbursed by the Transferor of such
interest.
12. Withdrawals.
12.1 Withdrawals. Except as expressly permitted by this
Agreement, no Member may (i) resign or withdraw from the Company or (ii)
receive any distribution from the Company on account of its resignation or
withdrawal (whether voluntary, involuntary or by operation of law) before the
liquidation of the Company.
12.2 Retirement Events. From and after the time a Retirement
Event occurs with respect to any Member (such Member, the "Retired Member"),
such Retired Member (and, subject to Section 11, any Transferee of any interest
of such Retired Member in the Company) shall have the status of an unadmitted
assignee of its interest in the Company and, as such, shall have none of the
rights and powers of a Member hereunder or under the Act (including, without
limitation, to vote, give consents or approvals, access Company records or
otherwise manage or participate in the affairs of the Company) other than to
receive the distributions and allocations that it otherwise would have been
entitled to receive hereunder with respect to such interest.
13. Actions of the Members.
13.1 In General. Except as otherwise provided in this
Agreement, a Member's consent, approval, vote or other action as to any matter
may be effected by (i) the affirmative vote by such Member to the doing of the
act or thing under consideration at any meeting called and held pursuant to
Section 13.2 to consider such act or thing or (ii) a written consent given by
such Member at, prior to or after the doing of the act or thing under
consideration pursuant to Section 13.3.
13.2 Meetings. Any matter requiring the action of any one (1)
or more of the Members hereunder may be considered at a meeting called by the
Manager or any Member and held not less than three (3) nor more than thirty
(30) Business Days after written notice thereof shall have been given to the
Member(s) entitled to vote at the meeting. Any such notice shall state briefly
the purpose, time and place of the meeting. A Member may waive in writing the
requirements for notice of a meeting before, during or after such meeting (and
the attendance of a Member at any meeting shall constitute such Member's
waiver). All such meetings shall be held at such reasonable times and places as
the Manager (or, in the case of a meeting of the Class A Member(s), such Class
A Member(s)) shall determine. A Member may participate in any meeting by
conference telephone call or similar communications equipment if all the
Persons participating in such meeting can hear each other. Such participation
of a Member shall constitute the presence of such Member at such meeting. At
any meeting of one (1) or more of the Members, the presence in person, or by
conference telephone call or similar communications equipment, of Members
sufficient to approve the action under consideration shall be required to
constitute a quorum for the transaction of business at such meeting. When a
quorum is present at any meeting of one (1) or more of the Members, the vote of
Members sufficient to approve the action under consideration shall decide any
matter brought before such meeting, unless the matter is one upon which by
express provision of law or this Agreement, a different vote is required, in
which case such express provision shall govern and control the decision on such
matter.
13.3 Action Without Meeting. Any action that may be taken at
a meeting of any one (1) or more of the Members may be taken without a meeting,
without prior notice and without a vote if a consent or consents in writing,
setting forth the action so taken, are signed by one (1) or more Members (or
their proxy holders) whose votes would be sufficient to authorize or take such
action at a meeting and delivered to the Company (and, if the consent of more
than one (1) Member is required, are delivered to the Company within a period
of sixty (60) consecutive days). Any copy, facsimile or other reliable
reproduction of a consent in writing may be substituted or used in lieu of the
original writing for any and all purposes for which the original writing could
be used, provided that such copy, facsimile or other reproduction shall be a
complete reproduction of the entire original writing. Prompt notice of the
taking of any action without a meeting by fewer than all of the Members
entitled to participate in such action shall be given to those Members who have
not consented in writing.
13.4 Proxies. A Member entitled to vote at a meeting of one
(1) or more of the Members, or to express consent or dissent to Company action
in writing without a meeting, may authorize another Person or Persons to act
for it by proxy, but no such proxy shall be voted or acted upon after three (3)
years from its date, unless the proxy provides for a longer period.
13.5 Actions by Class A Members. Notwithstanding any other
provision of this Agreement, for as long as Windspeed (or an Entity that has
become Manager pursuant to Section 8.1.3 upon the Transfer to it of Windspeed's
Class B interest in the Company) is the Manager, only CDI (and/or any Persons
who have been admitted as substituted Members with respect to CDI's Class A
interest) shall have rights to participate in and effect (acting by a majority
in interest of them, by Capital Contributions) consents, approvals, votes or
other actions to be given or taken, as the case may be, by the Class A Members
in accordance with this Section 13 (it being the intent that Windspeed and any
Transferees of its Class A interest shall have no right to participate in or
effect any such consents, approvals, votes or other actions). At any other
time, the affirmative vote or written consent of the holders of a majority in
interest (by Capital Contributions) of all of the Class A Members shall be
required for any, consent, approval, vote or other action to have been validly
given or taken, as the case may be, by the Class A Members in accordance with
this Section 13.
13.6 No Other Voting Rights. A Member shall have no rights to
vote, give consents or approvals, or otherwise manage or participate in the
affairs of the Company except as expressly provided in this Agreement or in any
mandatory provision of the Act.
14. Dissolution; Wind-up; Liquidating Distributions.
14.1 Events Causing Dissolution. The Company shall dissolve
(i) at the time that there are no remaining Members of the Company unless the
business of the Company is continued in accordance with the Act, (ii) on the
effective date specified in a written election to dissolve the Company adopted
by the Manager and approved by the Manager and by a majority in interest (by
Capital Contributions) of the Members of each class (voting separately by
class) at any time before the fifth (5th) anniversary of the Effective Date,
(iii) on the effective date specified in a written election to dissolve the
Company adopted by either the Manager or the Fund B Advisor at any time on or
after the fifth anniversary of the Effective Date, (iv) at the time when
Windspeed shall cease to be the Manager or a Member of the Company or (v) the
time of the judicial dissolution of the Company under the Act.
14.2 Wind-up. The Manager (or, if one is appointed under the
Act, a liquidating trustee) shall be responsible for the winding up and
liquidation of the Company. Subject to Section 8.3, after the dissolution of
the Company, the Manager (or such liquidating trustee) shall collect the
Company's receivables, pay the Company's debts and obligations, and liquidate
or distribute the Company's assets as promptly as is practicable and consistent
with obtaining fair value for the Company's assets, having due regard to the
activity and condition of the relevant markets and general financial and
economic conditions. After the Company's affairs have been wound up and its
debts and obligations have been paid or provided for, the Manager shall (i)
make a final allocation of Net Operating Income or Loss, as the case may be,
Net Portfolio Profit or Loss, as the case may be, and other items in such
amounts and proportions as are necessary (to the extent possible) for the
Members' capital account balances to equal the amounts of any remaining assets
of the Company they would be entitled to receive if such remaining assets were
to be distributed in accordance with Section 7 (subject to the limitations set
forth therein) and (ii) then distribute such remaining assets to the Members in
accordance with Section 7. Until the Company's termination pursuant to Section
14.3, the business of the Company and the affairs of the Manager and Members,
as such, shall continue to be governed by this Agreement, provided that the
Company shall engage in no further business other than in connection with its
wind-up and liquidation.
14.3 Termination. The dissolution of the Company shall be
effective on the day on which the event occurs giving rise to the dissolution,
but the Company shall not terminate until the winding up of the business and
affairs of the Company has been completed as provided herein and a certificate
of cancellation of the Company has been filed with the Office of the Secretary
of State of the State of Delaware. The Manager (or the liquidating trustee, as
the case may be), acting singly, is authorized to execute and file a
certificate of cancellation on behalf of the Company.
14.4 Liquidating Trust. With the approval of the Fund B
Advisor, if the Company has not been liquidated by the second anniversary of
the date of its dissolution pursuant to Section 14.1, the Manager (or
liquidating trustee) may distribute the non-cash assets of the Company (other
than any Marketable Securities) to a trust established for the sole purposes of
liquidating such remaining assets, collecting amounts owed to the Company and
paying any contingent or unforeseen liabilities or obligations of the Company.
The Manager (or such liquidating trustee) shall use reasonable efforts to
ensure that such trust qualifies as a liquidating trust under Treasury
Regulations Section 301.7701-4(d). The distribution to the trust shall
constitute a final, liquidating distribution of assets pursuant to 14.2 (with
any asset distributed in kind to the trust being treated as if it were an
amount of cash equal its fair market value as determined pursuant to Section
7.4). For purposes of determining and allocating Net Operating Income, Net
Operating Loss, Net Portfolio Profit, Net Portfolio Loss and other items
pursuant to Section 6, any asset that is to be distributed in kind to such
trust shall be treated as having then been sold by the Company for its value as
determined for purposes of applying this Section 14.4 (provided that, for such
purposes, the fair market value of any asset that is distributed subject to a
nonrecourse indebtedness shall be deemed not to be less than the amount of such
indebtedness). The Members' relative beneficial interests in the trust shall be
equal to their respective relative interests in the assets contributed to the
liquidating trust as of the time that such assets are contributed to the
liquidating trust.
14.5 Escrow Account. Any remaining amounts in the Escrow
Account shall be distributed to CDI not later than the earliest of (i) the date
on which the Company elects to dissolve, (ii) the termination of the Investment
Period, or (iii) when the Manager deems appropriate.
15. Withholding. Notwithstanding any other provision of this
Agreement, the Company shall be entitled to withhold and pay over, or otherwise
pay, any withholding or other taxes payable by the Company at such times and
based upon such rates as the Manager determines to be appropriate. If the
Company makes a payment of tax for any accounting period with respect to any
Member or as a result of any Member's participation in the Company, such Member
shall be deemed for all purposes of this Agreement to have received the amount
of such payment as a distribution from the Company on the last day of the
period for which the tax is withheld and paid or, if earlier, on the last day
on which such Member owned an interest in the Company. Any deemed distribution
to a Member pursuant to this Section 15 shall be treated (to the extent not
repaid to the Company) as an advance of, and shall offset, an equal amount of
distributions that would otherwise thereafter be made to such Member pursuant
to the provisions of Section 7 in the order that such distributions would
otherwise have been made. To the extent that the aggregate of such
distributions to a Member for any month exceeds the distributions to which such
Member would otherwise be entitled for such month, the amount of such excess
shall be repaid by such Member to the Company within thirty (30) days after the
end of such month.
16. Books; Reports.
16.1 Books and Records. The books and records of the Company,
including a list of the names and business or mailing addresses of the Members,
shall be maintained at the principal office of the Company in accordance with
the Act. All of the books and records of the Company shall be available for
examination at the offices of the Company in which they are maintained by any
Member or by any Member's duly authorized representatives at any and all
reasonable times upon reasonable notice. Each Member, or such Member's duly
authorized representatives, upon written notice to the Manager and upon paying
the costs of collection, duplication and mailing, shall be entitled for any
purpose reasonably related to such Member's interest as a Member in the Company
to a copy of information to which such Member is entitled under the Act. The
Company may maintain such other books and records and may provide such
financial or other statements as the Manager and the Fund B Advisor mutually
agree upon.
16.2 Accounting; Tax Year. The Company shall report its
operations for tax purposes on such method and based upon such taxable year as
the Manager determines to be appropriate consistent with applicable federal
income tax laws. The financial statements of the Company shall be prepared in
accordance with generally accepted accounting principles.
16.3 Reports.
16.3.1 Within ninety (90) days after the end of each
fiscal year of the Company, or as soon as practicable thereafter, the Manager
shall send to each Person who was a Member at any time during such fiscal year
such tax information as shall be necessary for the preparation by such Person
of its federal, state and local income tax returns.
16.3.2 Within (45) days after the end of each fiscal
quarter of the Company, the Manager shall send to each Member and the Fund B
Advisor (i) an unaudited statement of Assets, Liabilities and Members' Capital
of the Company as of the end of such quarter, (ii) unaudited statements of
operations of the Company for such quarter and for the fiscal year that
includes such quarter through the end of such quarter, (iii) a summary of any
transactions by the Company during such quarter and (iv) a summary of any
distributions made during such quarter.
17. Definitions. As used in this Agreement, the following terms shall
have the meanings assigned to them in this Section 17:
"Act" has the meaning set forth in the Recitals.
"Adjusted Capital Account Balance" means, with respect to any
Member as of the close of any fiscal year or other accounting period, the
balance in such Member's capital account adjusted by adding to such balance
such Member's share of any "minimum gain" or "partner nonrecourse debt minimum
gain," within the meaning of the Treasury Regulations under Section 704(b) of
the Code, of the Company as of the close of such year or other period.
"Affiliate" means (i) with respect to any individual, (a) any
member of such individual's Family, (b) any Entity more than ten percent (10%)
of the beneficial interests in which are directly or indirectly owned by one
(1) or more of such individual and members of such individual's Family or (c)
any member, manager, director, partner, shareholder, officer, trustee,
beneficiary or employee of any Entity described in (b), and (ii) with respect
to any Entity, (a) any direct or indirect member, manager, director, partner,
shareholder, officer, trustee or beneficiary of or in such Entity, (b) any
member of the Family of an individual described in (a) or (c) any other Entity
directly or indirectly Controlling, Controlled by or under common Control with
such Entity.
"Business Day" means any day that is not a Saturday, Sunday
or legal holiday in the Company's principal place of business.
"Call Notice" means a written notice delivered by the Manager
to a Member calling for a contribution from such Member pursuant to Section 5.2
in an amount and by a due date specified in such notice, which due date shall
be no less than three (3) Business Days after the delivery of such notice to
such Member.
"Capital Commitment" means, with respect to any Member, the
Capital Commitment set forth opposite such Member's name on the attached
Schedule 1 (allocated, in the case of any Member holding interests in the
Company of more than one (1) class, between or among such Member's interests as
set forth on such Schedule); provided, however, that if the Company has not
invested 50% of the sum of the Capital Commitments set forth on Schedule 1 in
securities of Fund A Portfolio Companies by eighteen (18) months from the
Effective Date, the Capital Commitments of the Members shall be reduced to
66.66% of the respective amounts set forth on such Schedule (a "Commitment
Reduction"). A Transferee of all or a portion of a Member's interest in the
Company shall succeed to the Capital Commitment of its Transferor to the extent
allocable, based on the terms of the Transfer, to the Transferred interest.
Following a Commitment Reduction: (a) any amount in the Escrow Account in
excess of CDI's unfunded Capital Commitment after giving effect to the Capital
Reduction shall be immediately paid to CDI; and (b) thereafter, the Manager
shall have the ability to solicit additional capital contributions by the
Members, but no Member shall be required to make any such solicited capital
contribution. For purposes of any such additional capital contribution which is
solicited in accordance with the preceding sentence, the Manager shall provide
written notification to the Fund B Advisor of the solicitation, and CDI shall
be deemed to have declined to make any such additional capital contribution if
the Fund B Advisor shall not have contacted the Manager to the contrary within
thirty (30) days of the written notification.
"Capital Contribution" means, with respect to any Member as
of any time of determination, the sum of (i) the amount of money that such
Member has contributed to the Company pursuant to Section 5.2 (or is deemed to
contribute pursuant to Section 5.3), (ii) the fair market value, as determined
pursuant to Section 5, of any property that such Member has contributed to the
Company (net of any liabilities that the Company has assumed or taken subject
to, under Section 752 of the Code, in connection with acquiring such property
from such Member), and (iii) the amount of any Company liabilities that such
Member has assumed, within the meaning of Section 1.704-l(b)(2)(iv)(c) of the
Treasury Regulations. A loan by a Member to the Company shall not be treated as
part of such Member's Capital Contribution. A Transferee of all or a portion of
a Member's interest in the Company shall succeed to the Capital Contribution of
its Transferor to the extent allocable, based on the terms of the Transfer, to
the Transferred interest.
"CDI" has the meaning set forth in the initial paragraph of
this Agreement.
"Certificate" means the Company's Certificate of Formation
filed with the Secretary of State of the State of Delaware.
"Class A Member" means any Person who, at the time of
reference, has been admitted to the Company as, and remains, a Class A Member
hereunder.
"Class B Member" means any Person who, at the time of
reference, has been admitted to the Company as, and remains, a Class B Member
hereunder.
"Code" means the Internal Revenue Code of 1986, as amended,
and, where applicable, any predecessor or successor thereto.
"Company" means the Delaware limited liability company
governed by this Agreement named Comdisco Ventures Fund B, LLC (or such other
name as may be selected pursuant to Section 1.3).
"Contribution Percentage" means, with respect to any Member
as of any time of determination, such Member's Capital Contribution expressed
as a percentage of the sum of the Capital Contributions of all of the Members.
"Control" (including the terms "controlling," "controlled
by," and "under common control with") means the direct or indirect possession
of the power to direct or cause the direction of the management and policies of
an Entity, whether through the ownership of Voting Securities, by contract, or
otherwise.
"Effective Date" has the meaning set forth in the initial
paragraph of this Agreement.
"Entity" means any corporation, partnership, limited
liability company, trust, unincorporated association or other organization.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Escrow Account" means the escrow account established and
maintained pursuant to Section 7.5 of the Fund A Agreement.
"Event of Bankruptcy" means, with respect to any Person
(except CDI), any of the following events:
(i) the making by such Person of an assignment for
the benefit of creditors;
(ii) the filing by such Person of a voluntary
petition under any bankruptcy, insolvency or similar law;
(iii) the adjudication of such Person by a court of
competent jurisdiction as a bankrupt or insolvent, or the entry against such
Person of an order for relief under any bankruptcy, insolvency or similar
proceeding;
(iv) the filing by such Person of a petition or
answer seeking for itself any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any bankruptcy
or insolvency statute, law or regulation;
(v) the filing by such Person of an answer or other
pleading admitting or failing to contest the material allegations of a petition
filed against him in any bankruptcy or insolvency proceeding;
(vi) such Person's written request for, consent to
or acquiescence in the appointment of a trustee, receiver or liquidator of such
Person or of all or any substantial part of such Person's properties; or
(vii) the passage of (i) one hundred twenty (120)
days after the commencement of any proceeding against such Person seeking
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any bankruptcy or insolvency statute, law
or regulation without such proceeding having been dismissed, (ii) ninety (90)
days after the appointment, without such Person's consent or acquiescence, of a
trustee, receiver or liquidator of such Person or of all or any substantial
portion of such Person's properties without such appointment having been
vacated or stayed or (iii) ninety (90) days after the expiration of any stay of
an appointment referred to in the foregoing clause (ii) without such
appointment having been vacated.
"Family" means, with respect to any individual, any of such
individual's spouse and descendants (by blood or adoption).
"Fund A" means Comdisco Ventures Fund A, LLC, a Delaware
limited liability company.
"Fund A Agreement" means the Limited Liability Company
Agreement of Comdisco Ventures Fund A, LLC, dated as of February 20, 2004,
executed and delivered by CDI and Windspeed in connection with their execution
and delivery of this Agreement.
"Fund A Portfolio Company" means any issuer of any of the
securities held by Fund A, including, without limitation, of any securities
acquired by Fund A by reason of (i) any stock dividend, stock split, stock
issuance, combination, recapitalization, reclassification, merger,
consolidation, conversion or similar transaction, (ii) the exercise of any
option, warrant, conversion or exchange rights, or (iii) the participation in
subsequent financing rounds of Fund A Portfolio Companies.
"Fund B Advisor" means the individual designated by the Class
A Members from time to time pursuant to Section 8.2.
"Investment Period" has the meaning set forth in Section 5.2.
"Management Fee" means the management fee payable pursuant to
Section 8.5.
"Manager" means Windspeed, or any successor thereto, in its
capacity as manager of the Company hereunder.
"Marketable Security" means any security that is described in
Section 7.4.1, Section 7.4.2 or Section 7.4.3, and which is not subject to any
"hold back" or "lock up" required by a managing underwriter in connection with
the public offering of equity securities of the Portfolio Company which issued
such Marketable Securities, or any restriction on the disposition thereof under
the terms of any other agreement or of any law, regulation or policy of any
state, and each Member's entire holdings of such Marketable Securities can be
sold by such Member to the general public without the necessity of any federal,
state or local government consent, approval or filing (other than any notice
filings of the type required pursuant to Rule 144(h) under the Securities Act
of 1933, as amended) and without violation of federal or state securities laws.
"Member" means any Person who is a member of the Company
(whether of Class A or Class B) as shown on the books of record of the Company
at the time of reference thereto, in such Person's capacity as a member of the
Company.
"Members' Capital" means, for purposes of preparing the
information pursuant to Section 16.3.2, as of any date of determination, the
amount that would be available for distribution to the Members pursuant to
Sections 7 and 14 if the Company were to sell its assets at their values
determined in accordance with Section 7.4 (as applicable), satisfy its debts
and obligations (including, without limitation, any accrued but unpaid portion
of the Management Fee) in accordance with their terms, and then liquidate. For
purposes of determining the Put Price pursuant to Section 11.3.4, "Members'
Capital" will be the amount shown as Members' Capital in the statement of
Assets, Liabilities and Members' Capital prepared by the Manager on a quarterly
basis in accordance with Section 16.3.2, consistently applied.
"Net Operating Income" or "Net Operating Loss" means, for any
fiscal year or other accounting period of the Company, an amount equal to the
Company's taxable income or loss for such period determined in accordance with
Section 703(a) of the Code (for this purpose, all items of income, gain, loss
or deduction required to be separately stated pursuant to Section 703(a)(1) of
the Code shall be included in such taxable income or loss), including each item
thereof, computed with the following adjustments:
(i) income of the Company that is exempt from
federal income tax and that is not otherwise taken into account in computing
Net Operating Income or Net Operating Loss shall be added to such taxable
income or loss;
(ii) expenditures of the Company that are described
in Section 705(a)(2)(B) of the Code (or that are treated as described in such
Section pursuant to Section 1.704-l(b)(2)(iv)(i) of the Treasury Regulations)
and that are not otherwise taken into account in computing Net Operating Income
or Net Operating Loss shall be subtracted from such taxable income or loss; and
(iii) there shall not be taken into account in
computing Net Operating Income or Net Operating Loss for any year or other
period (a) any items of income, gain, loss, deduction and expenditure that are
specially allocated pursuant to Section 6.3 or Section 6.4 or (b) any items
that are taken into account in determining Net Portfolio Profit or Net
Portfolio Loss.
"Net Portfolio Receipts" means the amounts of cash received
by the Company with respect to securities held by it net of (i) amounts used or
reserved by the Manager to pay expenses, debts and obligations of the Company
(including, without limitation, the Management Fee) and (ii) amounts used or
reserved by the Manager to acquire securities of Fund A Portfolio Companies,
including, without limitation, by exercising option, warrant, conversion,
exchange, pre-emptive or other purchase rights with respect to securities held
by Fund A and by participating in subsequent financing rounds of Fund A
Portfolio Companies.
"Net Portfolio Profit" or "Net Portfolio Loss" means, for any
fiscal year or other accounting period of the Company, the difference, if any
(positive or negative, as the case may be), between (i) the Company's gross
taxable income and gains with respect to securities held by it for such fiscal
year or other period and (ii) the Company's gross taxable deductions and losses
with respect to securities held by it for such fiscal year or other period,
including each item thereof, computed with the following adjustments:
(i) income with respect to any security that is
exempt from federal income tax and that is not otherwise taken into account in
computing Net Portfolio Profit or Net Portfolio Loss shall be taken into
account;
(ii) any security that is distributed in kind shall
be treated as having been sold for its fair market value as determined by the
Manager in accordance with Sections 1.704-l(b)(2)(iv)(e) and
1.704-l(b)(2)(iv)(f) of the Treasury Regulations;
(iii) adjustments to the book values of Company
securities pursuant to Section 1.704-1(b)(2)(iv)(f) of the Treasury Regulations
in connection with a contribution to or distribution by the Company shall be
treated as gains or losses, as the case may be, from dispositions of those
securities in accordance with Section 1.704-l(b)(2)(iv)(f) of the Treasury
Regulations;
(iv) gains, losses and cost recovery deductions with
respect to securities that are properly reflected, under Section
1.704-l(b)(2)(iv) of the Treasury Regulations, on the Company's books at values
that differ from the Company's tax bases in those properties shall be
determined with reference to the book values of those securities in accordance
with Sections 1.704-l(b)(2)(iv)(f), 1.704-l(b)(2)(iv)(g) and 1.704-l(b)(4)(i)
of the Treasury Regulations; and
(v) items that are specially allocated pursuant to
Section 6.3 or Section 6.4 shall not be taken into account in computing a Net
Portfolio Profit or Net Portfolio Loss for any year or other period.
"Offer" has the meaning set forth in Section 11.2.2.
"Offered Interest" has the meaning set forth in Section
11.2.1.
"Offer Period" has the meaning set forth in Section 11.2.2.
"Operating Cash Flow" means the amounts of cash received by
the Company (including, without limitation, earnings on Temporary Investments,
but excluding Capital Contributions and receipts taken into account in
determining Net Portfolio Receipts) net of (i) amounts used or reserved by the
Manager to pay expenses, debts and obligations of the Company (including,
without limitation, the Management Fee) and (ii) amounts used or reserved by
the Manager to acquire securities of Fund A Portfolio Companies, including,
without limitation, by exercising option, warrant, conversion, exchange,
pre-emptive or other purchase rights with respect to securities held by Fund A
and by participating in subsequent financing rounds of Fund A Portfolio
Companies.
"Person" means any individual or Entity.
"Put Exercise Notice" has the meaning set forth in Section
11.3.3
"Put Period" has the meaning set forth in Section 11.3.1.
"Put Period Notice" has the meaning set forth in Section
11.3.1.
"Put Price" has the meaning set forth in Section 11.3.4.
"Regulatory Allocations" has the meaning set forth in Section
6.4.
"Reminder Notice" has the meaning set forth in Section
11.3.1.
"Retired Member" has the meaning set forth in Section 12.2.
"Retirement Event" means, with respect to any Member, (i) an
Event of Bankruptcy with respect to such Member (except CDI), or (ii) the
Transfer (or the occurrence of any event which results or will result in the
Transfer) by such Member of any interest in the Company in violation of this
Agreement.
"Selling Member" has the meaning set forth in Section 11.2.1.
"Short Term Investments" means commercial paper, governmental
obligations, money market instruments, money market mutual shares, certificates
of deposit and other similar obligations and securities in each case of high
investment grade quality.
"Target Capital Account Balance" means, for any Member as of
the close of any fiscal year or other accounting period, the amount which such
Member would then be entitled to receive if the Company were to sell its
non-cash assets at book value as then determined in accordance with the
Treasury Regulations under Section 704(b) of the Code, satisfy its debts and
obligations (including, without limitation, the obligation of the Company to
pay the Management Fee) in accordance with their terms, and then liquidate in
accordance with Sections 7 and 14.
"Tax Liability" means, as to any Member as of the close of
any fiscal year or other accounting period, (i) the amount of net taxable
income and gain corresponding to allocations of Net Portfolio Profit or Loss
made with respect to such Member's interest in the Company (including to
predecessor holders) pursuant to Section 6 for periods through and including
the close of such fiscal year or other accounting period, multiplied by (ii)
the highest combined federal and state rate (taking into account any federal
deductibility of state taxes and vice versa, and any applicable capital gain or
other preferences) applicable to individual residents of Massachusetts, in the
case of allocations to the Class B Member, or to corporations with principal
places of business in Illinois, in the case of the Class A Member, for such
fiscal year or other accounting period.
"Tax Matters Partner" has the meaning set forth in Section
6.9.
"Term" has the meaning set forth in Section 4.
"Transfer" means (i) when used as a verb, to sell, assign,
transfer, bequeath, devise, pledge, encumber or otherwise dispose of,
voluntarily, involuntarily or by operation of law, and (ii) when used as a
noun, any sale, assignment, transfer, bequest, devise, pledge, encumbrance or
other disposition, whether voluntary, involuntary or by operation of law.
"Transfer Notice" has the meaning set forth in Section
11.2.1.
"Treasury Regulations" means the Income Tax Regulations
promulgated from time to time under the Code. References to specific sections
of the Treasury Regulations shall be to such sections as amended, supplemented
or superseded by Treasury Regulations currently in effect.
"Voting Securities" means, with respect to any Entity that is
a corporation (or that is managed by one (1) or more Persons having powers
similar to those of a corporate board of directors and who are subject to
periodic re-election, or removal and replacement, similar to corporate
directors), securities of such Entity having the right to vote in an election,
or for the removal and replacement, of such Entity's board of directors (or
such Persons having similar powers).
"Windspeed" has the meaning set forth in the initial
paragraph of this Agreement.
"Windspeed Fund" has the meaning set forth the initial
paragraph of this Agreement.
"Windspeed Team" means Xxxxxx X. Xxxxxx Xx., Xxxx X. Xxxxxxx
and Xxxxxx Xxxxxxx, the general partners of Windspeed.
18. Miscellaneous.
18.1 Successors and Assigns. The covenants and agreements
contained herein shall be binding upon and inure to the benefit of the heirs,
executors, administrators, successors and assigns of the respective parties
hereto, and no other Person shall have any rights or benefits hereunder except
to the extent expressly provided by applicable law.
18.2 Waivers. The failure of any Person to seek redress for
violation, or to insist on strict performance, of any covenant or condition of
this Agreement shall not (i) prevent a subsequent act which would have
constituted a violation from having the effect of an original violation or (ii)
excuse strict performance of such covenant or condition in any subsequent case.
18.3 Certification. The Manager may cause any or all of the
Members' interests in the Company to be evidenced by certificates. Unless
certificated pursuant to this Section 18.3, interests in the Company shall not
be evidenced by certificates. As a condition to the effectiveness of any
Transfer of an interest that has been certificated, the Manager may require the
submission to the Company of the certificate(s) evidencing such interest (or an
affidavit of loss in such form as the Manager determines to be appropriate).
18.4 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of
Delaware without regard to principles of conflicts of law. In the event of a
conflict between any provision of this Agreement and any non-mandatory
provision of the Act, the provisions of this Agreement shall control and take
precedence.
18.5 Separability. Each provision of this Agreement shall be
considered separable, and if for any reason any provision or provisions of this
Agreement, or the application of such provision to any Person or circumstance,
shall be held invalid or unenforceable in any jurisdiction, such provision or
provisions shall, as to such jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without invalidating the remaining provisions
hereof, or the application of the affected provision to Persons or
circumstances other than those to which it was held invalid or unenforceable,
and any such invalidity or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
18.6 Entire Agreement. This Agreement (together with any
exhibits, schedules, subscription or other agreements (including the Fund A
Agreement) referred to herein, which are hereby incorporated herein by
reference) constitutes the entire agreement among the parties governing the
relationship established hereby. This Agreement (together with such exhibits,
schedules and agreements) supersedes any prior agreement or understanding among
the parties and may not be modified or amended in any manner other than as set
forth herein or therein.
18.7 Section Titles. Section titles are for descriptive
purposes only and shall not control or alter the meaning of this Agreement as
set forth in the text.
18.8 Counterparts. This Agreement may be executed in several
counterparts, all of which together shall constitute one agreement binding on
all parties hereto notwithstanding that all the parties have not signed the
same counterpart.
18.9 Pronouns. When used herein, pronouns and variations
thereof shall be deemed to refer to the masculine, feminine or neuter or to the
singular or plural as the identity of the Person or Persons referenced or the
context may require.
18.10 No Partition. Except as expressly provided herein, no
Member or successor-in-interest to any Member shall have the right while this
Agreement remains in effect to have any property of the Company partitioned, or
to file a complaint or institute any proceeding at law or in equity to have
such property of the Company partitioned, and the Member, on behalf of itself
and its successors, representatives, heirs and assigns, hereby waives any such
right.
18.11 Amendments. In addition to any amendments otherwise
permitted by this Agreement, this Agreement may be amended from time to time by
the Manager and a majority in interest (by Capital Contributions) of each class
of Members (voting separately by class).
18.12 Notice Addresses. Any notice to a Member shall be
delivered in writing at the address of such Member set forth below such
Member's name on the signature page hereof (or instrument of adherence hereto)
executed by such Member or at such other mailing address of which such Member
shall prospectively notify the Manager and the other Members in writing (any
such other mailing address shall be duly noted by the Manager in the Company's
books and records). Any notice to the Company or the Manager shall be at the
principal office of the Company as set forth in Section 3 or at such other
mailing address of which the Manager shall prospectively notify the Members in
writing.
18.13 Notice Deemed Given. Any notice shall be deemed to have
been duly given if personally delivered or sent by United States mail or
express mail service or by telecopy or telegram confirmed by letter and will be
deemed given, unless earlier received, (i) if sent by certified or registered
mail, return receipt requested, or by first-class mail, five (5) calendar days
after being deposited in the United States mails, postage prepaid, (ii) if sent
by United States Express Mail or other express mail service, two (2) calendar
days (other than Sundays and federal holidays) after being deposited therein,
(iii) if sent by telegram, telecopy or other electronic transmission, on the
date sent provided confirmatory notice is sent by first-class mail, postage
prepaid, and (iv) if delivered by hand, on the date of receipt.
18.14 Dispute Resolution. In the event of any controversy,
dispute or claim under, arising out of or related to this Agreement (including
but not limited to claims relating to breach, termination, fraud or
misrepresentation, or the invalidity, illegality or voidness of this Agreement)
whether based on contract, tort, statute or other legal theory (collectively
hereinafter, "disputes"), the parties shall first attempt to resolve the
dispute, at the written request of any party to the dispute, through
discussions between authorized senior representatives of the parties to the
dispute. If, despite the good faith efforts of the parties, the dispute is not
resolved by the foregoing discussions within fifteen (15) days, the dispute
shall be referred to binding arbitration pursuant to the commercial arbitration
rules then in effect of the American Arbitration Association by a sole
arbitrator selected by the parties within fifteen (15) days after written
request for arbitration by any party or, in the absence of such selection, to
arbitrator(s) selected in accordance with such rules. The arbitration shall be
held in Boston, Massachusetts, unless the dispute is primarily related to the
put in accordance with Section 11.3, in which event the arbitration shall be
held in Chicago, Illinois. Any award made pursuant to an arbitration proceeding
shall be made within four (4) months of the appointment of the arbitrator and
may be entered in any court of competent jurisdiction. The arbitrator shall
determine issues of arbitrability but may not limit, expand or otherwise modify
the terms of this Agreement. Issues of arbitrability shall be determined in
accordance with the federal substantive and procedural laws relating to
arbitration.
[Remainder of Page Intentionally Left Blank]
COUNTERPART SIGNATURE PAGE
TO
LIMITED LIABILITY COMPANY AGREEMENT
By its execution of this signature page, the undersigned does hereby
agree to be bound by the provisions of the Limited Liability Company Agreement
to which this signature page is appended, a counterpart of which has been
furnished to the undersigned, and the undersigned hereby authorizes the
Company to append this signature page to a counterpart of the Limited
Liability Company Agreement as evidence thereof.
[Signature Block For Individuals] [Signature Block For Entities]
--------------------------------- Comdisco, Inc.
(Signature) ------------------------------
(Name of Entity)
--------------------------------- By: /s/ Xxxxxx X. Xxxx
(Printed Name) --------------------------
Title: Vice President
--------------------------------- 0000 Xxxxx Xxxxx Xxxx
(Xxxxxx Address of Residence) ------------------------------
(Street Address of Principal
Office)
---------------------------------- Xxxxxxxx, Xxxxxxxx 00000
(City or Town) (State) (Zip Code) -------------------------------
(City or Town) (State) (Zip Code)
---------------------------------- USA
(Country) -------------------------------
(Country)
COUNTERPART SIGNATURE PAGE
TO
LIMITED LIABILITY COMPANY AGREEMENT
By its execution of this signature page, the undersigned does hereby
agree to be bound by the provisions of the Limited Liability Company Agreement
to which this signature page is appended, a counterpart of which has been
furnished to the undersigned, and the undersigned hereby authorizes the
Company to append this signature page to a counterpart of the Limited
Liability Company Agreement as evidence thereof.
[Signature Block For Individuals] [Signature Block For Entities]
----------------------------------- Windspeed Acquisition Fund GP, LLC
(Signature) ----------------------------------
(Name of Entity)
------------------------------------ By: /s/ Xxxx X. Xxxxxxx
(Printed Name) -------------------------------
Name: Xxxx X. Xxxxxxx
Title: Manager
------------------------------------- 00 Xxxxxxx Xx.
(Xxxxxx Address of Residence) ----------------------------------
(Street Address of Principal Office)
------------------------------------- Xxxxxxxxx, XX 00000
(City or Town) (State) (Zip Code) ----------------------------------
(City or Town) (State) (Zip Code)
------------------------------------- USA
(Country) ----------------------------------
(Country)
COUNTERPART SIGNATURE PAGE
TO
LIMITED LIABILITY COMPANY AGREEMENT
By its execution of this signature page, the undersigned does hereby
agree to be bound by the provisions of the Limited Liability Company Agreement
to which this signature page is appended, a counterpart of which has been
furnished to the undersigned, and the undersigned hereby authorizes the
Company to append this signature page to a counterpart of the Limited
Liability Company Agreement as evidence thereof.
[Signature Block For Individuals] [Signature Block For Entities]
----------------------------------- Windspeed Acquisition Fund, L.P.
(Signature) ----------------------------------
(Name of Entity)
By: Windspeed Acquisition
Fund GP, LLC,
its general partner
------------------------------------ By: /s/ Xxxx X. Xxxxxxx
(Printed Name) -------------------------------
Name: Xxxx X. Xxxxxxx
Title: Manager
------------------------------------- 00 Xxxxxxx Xx.
(Xxxxxx Address of Residence) ----------------------------------
(Street Address of Principal Office)
------------------------------------- Xxxxxxxxx, XX 00000
(City or Town) (State) (Zip Code) ----------------------------------
(City or Town) (State) (Zip Code)
------------------------------------- USA
(Country) ----------------------------------
(Country)
