EXHIBIT 10.66
LIMITED LIABILITY COMPANY AGREEMENT OF
@ VENTURES EXPANSION PARTNERS, LLC
THIS LIMITED LIABILITY COMPANY AGREEMENT of @ Ventures Expansion Partners,
LLC (the "LLC"), dated as of February 10, 2000, is by and among the persons
named on Schedule A attached hereto, each of whom is designated as either a
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Capital Member or a Managing Member.
WHEREAS, the LLC was formed as a limited liability company pursuant to the
Delaware Limited Liability Company Act, by the filing, on or about the date
hereof, in the Office of the Secretary of State of the State of Delaware, of a
Certificate of Formation for the LLC (the "Certificate"); and
WHEREAS, the Members desire to enter into this Agreement to set forth the
agreements among the Members with respect to the LLC, all as more fully set
forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and in consideration of the
agreements hereinafter set forth, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
The following capitalized terms used in this Agreement shall have the
respective meanings ascribed to them below:
"Act" means the Delaware Limited Liability Company Act, in effect at the
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time of the initial filing of the Certificate with the Office of the Secretary
of State of the State of Delaware, and as thereafter amended from time to time.
"Affiliate" shall mean, with respect to any specified person or entity, (i)
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any person or entity that directly or indirectly controls, is controlled by, or
is under common control with such specified person or entity; (ii) any person or
entity that directly or indirectly controls 10% or more of the outstanding
equity securities of the specified entity or of which the specified person or
entity is directly or indirectly the owner of 10% or more of any class of equity
securities; (iii) any person or entity that is an officer of, director of,
manager of, partner in, or trustee of, or serves in a similar capacity with
respect to, the specified person or entity or of which the specified person or
entity is an officer, director, partner, manager or trustee, or with respect to
which the specified
person or entity serves in a similar capacity; or (iv) any person that is a
spouse, mother, father, brother, sister or lineal descendant of the specified
person.
"Agreement" means this Limited Liability Company Agreement as it may be
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amended, supplemented, or restated from time to time.
"Capital Account" means a separate account maintained for each Member and
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adjusted in accordance with Treasury Regulations under Section 704 of the Code.
To the extent consistent with such Treasury Regulations, the adjustments to such
accounts shall include the following:
(i) There shall be credited to each Member's Capital Account
the amount of any cash actually contributed by such Member to the capital
of the LLC, the fair market value of any property contributed by such
Member to the capital of the LLC, the amount of liabilities of the LLC
assumed by the Member or to which property distributed to the Member was
subject and such Member's share of the Net Profits of the LLC and of any
items in the nature of income or gain separately allocated to the Members;
and there shall be charged against each Member's Capital Account the amount
of all cash distributions to such Member, the fair market value of any
property distributed to such Member by the LLC, the amount of liabilities
of the Member assumed by the LLC or to which property contributed by the
Member to the LLC was subject and such Member's share of the Net Losses of
the LLC and of any items in the nature of losses or deductions separately
allocated to the Members.
(ii) If the LLC at any time distributes any of its assets in-
kind to any Member, the Capital Account of each Member shall be adjusted to
account for that Member's allocable share of the Net Profits, Net Losses or
items thereof that would be realized by the LLC if it sold the assets that
were distributed at their respective fair market values (taking Code
Section 7701(g) into account) immediately prior to their distribution.
(iii) If elected by the LLC in accordance with Section 6.01(b)
hereof, at any time specified in Treasury Regulation Section 1.704-
1(b)(2)(iv)(f), the Capital Account balance of each Member shall be
adjusted to the extent provided under such Treasury Regulation to reflect
the Member's allocable share (as determined under Article V) of the items
of Net Profits or Net Losses that would be realized by the LLC if it sold
all of its property at its fair market value (taking Code Section 7701(g)
into account) on the day of the adjustment.
"Capital Member" shall refer severally to any person named as a Capital
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Member in this Agreement and any person who becomes an additional, substitute or
replacement Capital Member as permitted by this Agreement, in such person's
capacity as a Capital Member of the LLC. "Capital Members" shall refer
collectively to all such persons in their capacities as Capital Members.
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"Carrying Value" means, with respect to any asset, the asset's adjusted
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basis for federal income tax purposes; provided, however, that (i) the initial
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Carrying Value of any asset contributed to the LLC shall be adjusted to equal
its gross fair market value at the time of its contribution and (ii) the
Carrying Values of all assets held by the LLC shall be adjusted to equal their
respective gross fair market values (taking Code Section 7701(g) into account)
upon an adjustment to the Capital Accounts of the Members described in paragraph
(iii) of the definition of "Capital Account." The Carrying Value of any asset
whose Carrying Value was adjusted pursuant to the preceding sentence thereafter
shall be adjusted in accordance with the provisions of Treasury Regulation
Section 1.704-1(b)(2)(iv)(g).
"Cause" shall mean, in connection with the termination of a Managing
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Member's relationship with the Employer:
(i) conviction of, or plea of nolo contendere to, (A) a
felony, whether or not business related, which may injure the business or
reputation of the Employer, or (B) a crime of moral turpitude;
(ii) theft or embezzlement of assets of the Employer;
(iii) a material breach of any agreement between the Managing
Member and the Employer including, without limitation, any violation of the
covenants set forth in Sections 6.06 and 6.07 below;
(iv) the willful and continued failure by the Managing Member
to substantially perform his or her duties (other than as a result of
incapacity due to physical or mental illness); or
(v) gross neglect of duties or responsibilities as an employee
of the Employer, or as a Managing Member, or dishonesty or incompetence, or
willful misconduct, which in any case adversely affects the business of the
Employer, but only if there has been a good faith determination by a
Majority in Number of the Voting Managing Members other than the subject
Managing Member that such neglect or misconduct or dishonesty or
incompetence has occurred.
"Certificate" means the Certificate of Formation creating the LLC, as it
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may, from time to time, be amended in accordance with the Act.
"CMGI" means CMGI Inc., a Delaware corporation.
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"CMGI Fund" means CMG @ Ventures Expansion, LLC, a Delaware limited
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liability company.
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"CMGI Fund Agreement" means the Limited Liability Company Agreement of the
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CMGI Fund, as from time to time amended and in effect.
"Code" means the Internal Revenue Code of 1986, as amended from time to
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time.
"Distributable Cash and Property", with respect to any particular
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Investment shall mean, with respect to any fiscal period, the excess of all
receipts of cash and property of the LLC from such Investment, including
dividends or distributions in respect of such Investment, proceeds from a
capital transaction relating to such Investment, and any and all other sources
over the sum of:
(i) Any and all expenses of the LLC related directly or
indirectly to such Investment, including an allocable share of the
following types of LLC expenses:
(A) cash disbursements for all items which are customarily
considered to be "operating expenses";
(B) payments of interest, principal and premium and points
and other costs of borrowing under any indebtedness of the LLC;
(C) payments made to purchase inventory or capital assets,
and for capital construction, rehabilitation, acquisitions,
alterations and improvements;
(D) payments made to purchase or sell securities, and
brokerage commissions, finders fees and transaction costs; and
(E) amounts set aside as reserves for working capital,
contingent liabilities, replacements or for any of the expenditures
described in clauses (A), (B), (C) and (D) above which are deemed by
the Voting Managing Members (in their reasonable discretion) to be
necessary to meet the current and anticipated future needs of the LLC;
and
(ii) The amount of expenses described in clause (i) above that
(A) are attributable to another Investment (the "Other Investment"), (B)
are not paid from the receipts of cash and property attributable to the
Other Investment as a result of the total expenses attributable to the
Other Investment for the fiscal period exceeding the total receipts of cash
and property attributable to the Other Investment for the fiscal period and
(C) are paid from the receipts of cash and property in respect of the
Investment for which the computation of Distributable Cash and Property is
being made (the "First Investment"); provided, however, that if
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Distributable Cash and Property with respect to the First Investment is
reduced as a result of this clause (ii), a corresponding amount of the next
amount of Distributable Cash and Property with respect to the Other
Investment shall be treated as a receipt attributable to the First
Investment.
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For purposes of determining Distributable Cash or Property in respect of any
particular Investment, the Voting Managing Members shall allocate all LLC
expenses of the types described in clauses (i) and (ii) above among all
Investments and among Other Cash Receipts in such manner as they may reasonably
determine.
"Distributable Other Cash" means, with respect to any fiscal period, the
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excess of Other Cash Receipts over the sum of the expenses (including those
described in clause (i) of the definition of "Distributable Cash and Property")
which the Voting Managing Members reasonably allocate to Other Cash Receipts.
"Domestic Fund" means @ Ventures Expansion Fund, L.P., a Delaware limited
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partnership.
"Domestic Fund Agreement" means the Limited Partnership Agreement of the
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Domestic Fund, as from time to time amended and in effect.
"Employer" shall mean, for any Managing Member, the LLC, any Fund, the
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Management Company, CMGI or any Affiliate of any of them that employs the
Managing Member on a substantially full-time basis. For purposes of this
Agreement, a Portfolio Company shall not constitute an Affiliate of any of the
LLC, any Fund, the Management Company, or CMGI (and a Managing Member shall not
be deemed to be employed by an Employer if such Managing Member is employed by a
Portfolio Company), unless the Capital Member specifically elects in writing to
treat a Portfolio Company as an Affiliate and such Portfolio Company falls
within the definition of "Affiliate" set forth above.
"Event of Forfeiture" shall mean and shall be deemed to have occurred in
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the event that:
(x) a Managing Member dies or becomes mentally or physically disabled
(as determined by a physician licensed in the Commonwealth of
Massachusetts, selected by the Voting Managing Members exclusive of any
Managing Member which is the subject of the determination) or a conservator
or guardian is appointed for the benefit of any Managing Member or his
property;
(y) the relationship of such Managing Member to all Employers is
terminated without Cause or for any reason other than the reasons specified
in clauses (x) and (z) of this definition; or
(z) a Managing Member defaults in its obligation to make Capital
Contributions to the LLC pursuant to Section 3.01 below and the Voting
Managing Members exercise the remedy in Section 3.01(e), or the
relationship of such Managing Member to the LLC is terminated with Cause
(in accordance with the procedures described below), or is terminated by
the Managing Member (each of the foregoing, a "Clause Z Event").
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An Event of Forfeiture for a Managing Member whose relationship with all
Employers was terminated pursuant to clause (y) may thereafter occur if any
Clause Z Event occurs with respect to such Managing Member.
"Follow-on Investment" shall have the meaning ascribed thereto in the
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Domestic Fund Agreement, the Foreign Fund Agreement and the CMGI Fund Agreement,
the Limited Partnership Agreements of each of @Ventures III, L.P. and @Ventures
Foreign Fund III, L.P. and the Limited Liability Company Agreement of CMG
@Ventures III, LLC, it being the intention of the Members that an investment in
a company in which any of such entities has a pre-existing investment shall be a
Follow-on Investment.
"Foreign Fund" means @ Ventures Foreign Expansion Fund, L.P., a Delaware
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limited partnership.
"Foreign Fund Agreement" means the Limited Partnership Agreement of the
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Foreign Fund, as from time to time amended and in effect.
"Funds" means the Domestic Fund, the Foreign Fund and the CMGI Fund, and
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"Fund" means any one of the Funds.
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"Investment" means an investment in a Portfolio Company made by any Fund,
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including without limitation a Follow-on Investment. As and when a Fund or Funds
makes an Investment, there shall be attached to this Agreement a Schedule for
such Investment, which shall reflect the information described in Section
3.03(a). Each such Schedule is hereinafter referred to as an "Investment
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Schedule" and all such Schedules are referred to collectively as the "Investment
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Schedules." The term "Investment" shall not include short-term investments made
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by any Fund pending investments in securities of Portfolio Companies.
"Investment Percentage Interest" means each Member's Percentage Interest in
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an Investment, as specified on the Investment Schedule for such Investment.
"LLC" means the limited liability company formed pursuant to the
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Certificate and this Agreement, as it may from time to time be constituted and
amended.
"Majority in Number of the Voting Managing Members" means, with respect to
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a particular action or matter, a majority in number of the Voting Managing
Members then entitled to vote on the action.
"Management Company" means @Ventures Expansion Management, LLC or an
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Affiliate thereof.
"Managing Member" shall refer severally to any person named as a Managing
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Member in this Agreement (whether a Voting Managing Member or a Non-Voting
Managing Member) and any person who becomes an additional, substitute or
replacement Managing Member as permitted
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by this Agreement, in such person's capacity as a Managing Member of the LLC.
"Managing Members" shall refer collectively to all such persons in their
capacities as Managing Members. Except as expressly set forth in this Agreement,
the rights, obligations and interests of the Voting Managing Members and the
Non-Voting Managing Members shall be identical.
"Member" shall refer severally to any person named as a Capital Member or
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Managing Member in this Agreement and any person who becomes an additional,
substitute or replacement Capital Member or Managing Member as permitted by this
Agreement, in such person's capacity as a Member of the LLC. "Members" shall
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refer collectively to all such persons in their capacities as Members.
"Net Profits" and "Net Losses" mean the taxable income or loss, as the case
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may be, for a period as determined in accordance with Code Section 703(a)
computed with the following adjustments:
(i) Items of gain, loss, and deduction shall be computed based
upon the Carrying Values of the LLC's assets (in accordance with Treasury
Regulation Sections 1.704(b)(2)(iv)(g) and/or 1.704-3(d)) rather than upon
the assets' adjusted bases for federal income tax purposes;
(ii) Any tax-exempt income received by the LLC shall be
included as an item of gross income;
(iii) The amount of any adjustments to the Carrying Values of
any assets of the LLC pursuant to Code Section 743 shall not be taken into
account;
(iv) Any expenditure of the LLC described in Code Section
705(a)(2)(B) (including any expenditures treated as being described in
Section 705(a)(2)(B) pursuant to Treasury Regulations under Code Section
704(b)) shall be treated as a deductible expense;
(v) The amount of items of income, gain, loss or deduction
specially allocated to any Members pursuant to Section 5.02 shall not be
included in the computation; and
(vi) The amount of any items of Net Profits or Net Losses
deemed realized pursuant to paragraphs (ii) and (iii) of the definition of
"Capital Account" shall be included in the computation.
"Non-Voting Managing Member" shall refer severally to any Managing Member
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identified as a Non-Voting Managing Member on Schedule A hereto and any person
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who becomes an additional, substitute or replacement Non-Voting Managing Member
as permitted by this Agreement, in such person's capacity as a Non-Voting
Managing Member of the LLC. "Non-
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Voting Managing Members" shall refer collectively to all such persons in their
capacities as Non-Voting Managing Members.
"Other Cash Receipts" means cash receipts of the LLC, exclusive of capital
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contributions of the Members, which the Voting Managing Members reasonably
determine are not allocable to Investments.
"Percentage Interest" shall be the percentage interest of a Member set
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forth in Schedule B, as amended from time to time, and subject to adjustment
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pursuant to Sections 3.04, 8.02 and 8.03.
"Permitted Transferee" means (A) any Member; (B) any spouse, parent, lineal
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descendant, brother, sister, or spouse of a brother or sister of a Member; (C)
any trust, corporation or partnership or other entity in which any Member and/or
one of the persons designated in clause (B) is a principal, beneficiary,
majority stockholder, member or limited or general partner with an aggregate
interest in profits and losses of greater than fifty percent; (D) grantors or
beneficiaries of a trust which is (or of which the trustees thereof are, in
their capacities as trustees) a Member; or (E) charitable foundations created or
primarily endowed by a Member or a member of his or her family.
"Portfolio Company" means the issuer of any security in which any Fund has
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invested, other than issuers in which the Fund has made short-term investments
pending the making of long-term investments.
"Securities Act" means the Securities Act of 1933, as amended.
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"Vesting Commencement Date" means, for each Managing Member, the Vesting
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Commencement Date specified on Schedule A attached hereto.
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"Vesting Escrow" shall have the meaning ascribed thereto in Section 4.02.
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"Vested Percentage" means, for any Managing Member, a fraction (expressed
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as a percentage) the numerator of which is the number of whole calendar quarters
that have elapsed between such Managing Member's Vesting Commencement Date and
the date of determination and the denominator of which is 20; provided, however,
that in no event shall a Managing Member's Vested Percentage exceed 100%.
"Voting Managing Member" shall refer severally to any Managing Member
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identified as a Voting Managing Member on Schedule A hereto and any person who
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becomes an additional, substitute or replacement Voting Managing Member as
permitted by this Agreement, in such person's capacity as a Voting Managing
Member of the LLC. "Voting Managing Members" shall refer collectively to all
such persons in their capacities as Voting Managing Members.
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ARTICLE II
GENERAL PROVISIONS
2.01 Formation of Limited Liability Company; Foreign Qualification. The
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Capital Member formed the LLC as a limited liability company under the Act on
February 10, 2000, by the filing on such date of the Certificate in the Office
of the Secretary of State of the State of Delaware.
Prior to the LLC's conducting business in any jurisdiction other than the
State of Delaware, the LLC shall comply, to the extent procedures are available,
with all requirements necessary to qualify the LLC as a foreign limited
liability company in each such jurisdiction where foreign qualification is
either necessary or appropriate. Each Member shall execute, acknowledge, swear
to and deliver all certificates and other instruments conforming to this
Agreement that are necessary or appropriate to qualify, or, as appropriate, to
continue or terminate the foreign qualification of, the LLC as a limited
liability company in all such jurisdictions in which the LLC may conduct
business.
2.02 Name of the LLC. The name of the LLC shall be @ Ventures Expansion
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Partners, LLC.
2.03 Business of the LLC. The general character of the business of the
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LLC is to (a) serve as the general partner of each of the Domestic Fund and the
Foreign Fund, (b) serve as the Managing Member of the CMGI Fund, (c) own a
limited liability company interest in Covestco-Ateura, LLC (or an affiliate
thereof), and (d) engage in any activities directly or indirectly related or
incidental thereto which may be lawfully conducted by a limited liability
company formed under the laws of the State of Delaware.
2.04 Place of Business of the LLC; Resident Agent. The address of the
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principal place of business of the LLC, and the office at which the LLC will
maintain its records is 000 Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000.
The LLC's registered office in Delaware is c/o Corporation Trust Company, 0000
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, 00000, and the LLC's registered agent for
service of process in Delaware is Corporation Trust Company, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx, 00000. The Voting Managing Members may at any time and
from time to time change the LLC's principal place of business, establish
additional places of business, change the LLC's registered agent or registered
office in Delaware, and in each case shall promptly provide notice of any of
such actions (identifying all such offices and agents) to all Members.
2.05 Duration of the LLC. The term of the LLC commenced on February 10,
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2000, and the LLC shall have perpetual existence, unless earlier terminated in
accordance with Article IX hereof.
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2.06 Members' Names and Addresses. The name and address of each Member
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are set forth on Schedule A. Additional Members may be admitted in accordance
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with the procedures specified in Article VIII. A Member may not resign from the
LLC at any time.
2.07 No Partnership. The LLC is not intended to be a general partnership,
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limited partnership or joint venture, and no Member shall be considered to be a
partner or joint venturer of any other Member, for any purposes other than
foreign and domestic federal, state, provincial and local income tax purposes,
and this Agreement shall not be construed to suggest otherwise.
2.08 Title to LLC Property. All property owned by the LLC, whether real
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or personal, tangible or intangible, shall be deemed to be owned by the LLC as
an entity, and no Member, individually, shall have any ownership of such
property. The LLC may hold any of its assets in its own name or in the name of
its nominee, which nominee may be one or more trusts. Any property held by a
nominee trust for the benefit of the LLC shall, for purposes of this Agreement,
be treated as if such property were directly owned by the LLC.
2.09 Nature of Member's Interest. The interests of all of the Members in
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the LLC are personal property and shall not, under any circumstances, be
considered real property.
2.10 Investment Representations. Each Member, by execution of this
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Agreement or an amendment hereto reflecting such Member's admission to the LLC,
hereby represents and warrants to the LLC that:
(a) It is acquiring an interest in the LLC for its own account for
investment only, and not with a view to, or for sale in connection with, any
distribution thereof in violation of the Securities Act or any rule or
regulation thereunder.
(b) It understands that (i) the interest in the LLC it is acquiring
has not been registered under the Securities Act or applicable state securities
laws and cannot be resold unless subsequently registered under the Securities
Act and such laws or unless an exemption from such registration is available,
(ii) such registration under the Securities Act and such laws is unlikely at any
time in the future and neither the LLC nor the Members are obligated to file a
registration statement under the Securities Act or such laws, and (iii) the
assignment, sale, transfer, exchange, or other disposition of the interests in
the LLC is restricted in accordance with the terms of this Agreement.
(c) It has had such opportunity as it has deemed adequate to ask
questions of and receive answers from representatives of the LLC concerning the
LLC, and to obtain from representatives of the LLC such information which the
LLC possesses or can acquire without unreasonable effort or expense, as is
necessary to evaluate the merits and risks of an investment in the LLC.
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(d) It has, either alone or with its professional advisers, sufficient
experience in business, financial and investment matters to be able to evaluate
the merits and risks involved in investing in the LLC and to make an informed
investment decision with respect to such investment.
(e) It can afford a complete loss of the value of its investment in
the LLC and is able to bear the economic risk of holding such investment for an
indefinite period.
(f) If it is an entity, (i) it is duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization, (ii) it has
full organizational power to execute and deliver this Agreement and to perform
its obligations hereunder, (iii) its execution, delivery and performance of this
Agreement has been authorized by all requisite action on behalf of the entity,
and (iv) it has duly executed and delivered this Agreement.
ARTICLE III
CAPITAL CONTRIBUTIONS
3.01 Capital Contributions.
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(a) Each Member shall be required to contribute capital to the LLC in
accordance with this Section 3.01.
(b) As and when the LLC is required to contribute capital to any Fund,
each Member shall contribute to the LLC his or its proportionate share of the
amount required to be contributed by the LLC to such Fund, determined in the
manner hereinafter provided. Each of the Members hereby acknowledges that it
has received copies of the CMGI Fund Agreement, the Domestic Fund Agreement and
the Foreign Fund Agreement, that it has read each of such Agreements, and
understands the LLC's obligations thereunder, including without limitation, the
LLC's obligations to make capital contributions to each of the Funds and to fund
certain escrow accounts.
(i) With respect to any routine call for capital by any Fund
(which capital calls the Members acknowledge are generally, but not always,
called for on a quarter annual basis), each Member shall contribute a
portion of the total amount called for based on his Percentage Interest in
the LLC on the date on which such capital is required to be contributed by
the LLC to the Fund. Notwithstanding the foregoing, the Voting Managing
Members may, in respect of any particular call for capital, determine to
modify each Member's share of the contribution to be made by such Member to
the LLC if the Voting Managing Members reasonably determine that the
amounts called for by any Fund relate in whole or in part to a Follow-on
Investment, in which case the portion of the contributions which relate to
such Follow-on Investment shall be contributed by the
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Members in accordance with their respective Investment Percentage Interests
in such Follow-on Investment. The Voting Managing Members may also make
other equitable adjustments to the portion to be contributed by each Member
to the LLC in respect of Investments to be made by the Funds to take into
account similar factors.
If any Member is admitted to the LLC during any calendar quarter, such
Member shall be required to contribute to the LLC an amount equal to (x)
the aggregate amount of the sum of (I) any contributions made by the other
Members to the LLC during or with respect to such calendar quarter pursuant
to this Section 3.01(b)(i) plus (II) the unspent amount, if any, of the
capital contributions made by the Members to the LLC in previous quarters
multiplied by (y) such Member's Percentage Interest in the LLC. The amount
so contributed by such Member shall be distributed to the other Members
(exclusive of Members whose Percentage Interests have been reduced to
zero), so that, following the admission of such additional Member, all
Members will have contributed a portion of the amount described in clause
(x) of the preceding sentence equal to their respective Percentage
Interests in the LLC as in effect immediately following such admission.
(ii) With respect to any amount required to satisfy the LLC's
obligations under Section 5.2E of the Domestic Fund Agreement [clawback
obligation], or Section 5.2E of the Foreign Fund Agreement [clawback
obligation], each Member shall contribute a portion of the total amount
called for based on the aggregate amount of distributions received by such
Member from the LLC which are, in the reasonable judgment of the Voting
Managing Members, attributable to the Domestic Fund and the Foreign Fund,
respectively, as compared to the aggregate amount of distributions received
by all Members from the LLC which are, in the reasonable judgment of the
Voting Managing Members, attributable to the Domestic Fund and the Foreign
Fund, respectively. Notwithstanding the foregoing, in no event shall any
Member be obligated to contribute to the LLC any amount pursuant to this
clause (ii) in excess of the total amount of distributions received by (or
held in the Vesting Escrow for the benefit of) such Member from the LLC.
The obligation of each Member to make contributions pursuant to this
Section 3.01(b)(ii) shall survive the withdrawal, resignation or default
(as described in Section 3.01(e) below) of any Member, and the occurrence
of an Event of Forfeiture of any Member. The LLC may contribute to the
Domestic Fund or the Foreign Fund on behalf of any Member any amounts held
in a Vesting Escrow on behalf of such Member, in respect of such Member's
obligations under this Section 3.01(b)(ii).
(iii) As and when the LLC is required to deposit amounts into
the escrow account established pursuant to Section 5.2F of the Domestic
Fund Agreement or Section 5.2F of the Foreign Fund Agreement, the Voting
Managing Members may determine to call for contributions of cash to the LLC
to enable the LLC to satisfy any such obligation. Each Member shall
contribute a portion of the amount which the Voting Managing Members so
determine to call, based on the aggregate amount of distributions received
by such Member from the LLC which are, in the reasonable judgment of the
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Voting Managing Members, attributable to the Domestic Fund and the Foreign
Fund, respectively, as compared to the aggregate amount of distributions
received by all Members from the LLC which are, in the reasonable judgment
of the Voting Managing Members, attributable to the Domestic Fund and the
Foreign Fund, respectively. In no event shall any Member be obligated to
contribute to the LLC any amount pursuant to this clause (iii) in excess of
the total amount of distributions received by (or held in the Vesting
Escrow for the benefit of) such Member from the LLC. The obligation of
each Member to make contributions pursuant to this Section 3.01(b)(iii)
shall survive the withdrawal, resignation or default (as described in
Section 3.01(e) below) of any Member, and the occurrence of an Event of
Forfeiture of any Member. The LLC may contribute to the Domestic Fund or
the Foreign Fund on behalf of any Member any amounts held in a Vesting
Escrow on behalf of such Member, in respect of such Member's obligations
under this Section 3.01(b)(iii).
(c) The Voting Managing Members may call for capital for other LLC
purposes as they may from time to time reasonably determine, and any capital
called for pursuant to this Section 3.01(c) shall be contributed by the Members
in proportion to their respective Percentage Interests on the date on which such
capital is called for.
(d) The Voting Managing Members shall call for capital from all
Members for the purposes specified in this Section 3.01 from time to time as
needed. In connection with any such call, the Voting Managing Members shall
provide to each Member notice of a call for capital (which notice may be given
in writing or by electronic mail), which notice shall specify the aggregate
amount called for from the LLC, a general statement of the purposes for which
such capital call is being made, each Member's share of the total amount called
for, and the date on which the capital contribution is due (which date shall, to
the extent reasonably practicable, be not less than 10 days after the date of
the notice).
(e) Any contribution of capital which is not made when due shall bear
interest at the prime rate of interest announced from time to time by The Wall
Street Journal plus 1% per annum, until paid in full. Without limiting the
foregoing, if a Member fails to satisfy his, her or its capital contribution
obligation as required under this Section 3.01 in a timely manner, the LLC may
exercise any rights it may have under the Act or otherwise at law or in equity,
and shall also have the rights provided in this Section 3.01(e). In any such
event, a Majority in Number of the Voting Managing Members (determined exclusive
of the Member which has defaulted in his capital contribution obligation) may
(but shall not be obligated to) cause the LLC to deliver to such Member a notice
("Default Notice") making reference to the Member's failure to contribute
capital to the LLC, and to this Section 3.01(e). If the defaulting Member fails
to fund such capital contribution obligation within five business days after the
date of delivery of the Default Notice, then an Event of Forfeiture shall be
deemed to have occurred with respect to such Member, with the consequences
specified in Section 3.04 below.
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(f) The LLC shall maintain written records indicating the amount of
capital contributed by each Member to the LLC.
(g) The LLC may elect to withhold from any amounts which are
otherwise distributable to a Member in accordance with the terms of this
Agreement any amount which such Member may be required to contribute to the LLC
pursuant to this Section 3.01. In the event the LLC so withholds, for all
purposes of this Agreement the Member with respect to whom the withholding
occurs shall be treated as if he had been distributed such amount in accordance
with Article IV hereof and then recontributed such amount pursuant to this
Section 3.01.
3.02 No Additional Capital. Except as provided in this Article III, no
---------------------
Member shall be obligated or permitted to contribute any additional capital to
the LLC. No interest shall accrue on any contributions to the capital of the
LLC, and no Member shall have the right to withdraw or to be repaid any capital
contributed by it or to receive any other payment in respect of its interest in
the LLC, including without limitation as a result of the withdrawal or
resignation of such Member from the LLC, except as specifically provided in this
Agreement.
3.03 Anticipated Operations of the LLC.
---------------------------------
(a) As and when any Fund acquires an Investment, the Managing Members
shall create an Investment Schedule for such Investment, which shall be attached
to this Agreement. The Investment Schedule for each Investment shall reflect
(a) the Fund or Funds making the acquisition, (b) the Portfolio Company issuing
the securities, (c) the Acquisition Date, (d) the number and class or series of
shares of such securities, (e) the purchase price and/or other consideration
payable by each Fund, (f) the Investment Percentage Interest of each of the
Members in such Investment (determined in the manner hereinafter provided) and
(g) such other information, if any, as the Managing Members may deem
appropriate.
(b) The Investment Percentage Interest of the Capital Member in each
Investment (including Follow-on Investments) shall at all times equal 10%.
(c) (i) Subject to Sections 3.03(c)(ii) and 3.04, the Investment
Percentage Interest of each Managing Member for whom an Event of Forfeiture
has not occurred shall equal 90% multiplied by a fraction (x) the numerator
---
of which shall equal such Managing Member's Percentage Interest at the
beginning of the calendar quarter in which the Investment was made (the
"Applicable Quarter") and the denominator of which shall equal the
aggregate Percentage Interests at the beginning of the Applicable Quarter
for all Managing Members exclusive of those for whom an Event of Forfeiture
has occurred. The Investment Percentage Interest of each Managing Member
in each Investment shall be subject to reduction upon the occurrence of an
Event of Forfeiture.
(ii) Notwithstanding Section 3.03(c)(i), if any Fund makes a
Follow-on Investment, the Investment Percentage Interests of the Managing
Members in such
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Follow-on Investment shall be proportionate to their Investment Percentage
Interests (determined hereunder or under the Limited Liability Company
Agreement of @Ventures Partners III, LLC, as applicable) for other
investments in the same Portfolio Company (except that the Investment
Percentage Interest in any Follow-on Investment for any Managing Member for
whom an Event of Forfeiture has occurred shall be zero). The Members agree
and acknowledge that it is currently anticipated that all Fund investments
will be Follow-on Investments, because the Funds expect to invest
exclusively in Portfolio Companies in which @Ventures III, L.P. and
@Ventures Foreign Fund III, L.P. invested. Therefore, the Investment
Percentage Interests of the Members in any such Portfolio Company will be
prorated based on their respective Investment Percentage Interests
specified in @Ventures Partners III, LLC with respect to investments in
such Portfolio Company.
3.04 Event of Forfeiture.
-------------------
(a) Each Managing Member's Percentage Interest and Investment
Percentage Interest in each Investment are subject to adjustment upon the
occurrence of an Event of Forfeiture with respect to such Managing Member, as
provided in this Section 3.04. In no event shall the provisions of this
Section 3.04 be applicable to the interest of the Capital Member.
(b) Upon the occurrence of an Event of Forfeiture with respect to a
Managing Member:
(i) Such Managing Member's Percentage Interest in the LLC shall,
from and after the date of the Event of Forfeiture, be reduced to zero, and
the Percentage Interest in the LLC of all other Managing Members (exclusive
of any Managing Member for whom an Event of Forfeiture has occurred) shall
be increased by an aggregate amount equal to the amount of the Percentage
Interest of the Managing Member for whom the Event of Forfeiture has
occurred (such increase to be allocated among them in proportion to their
respective Percentage Interests immediately prior to the adjustment
contemplated hereby).
(ii) If the Event of Forfeiture is not a Clause Z Event, such
---
Managing Member's Investment Percentage Interest in each Investment in
which such Managing Member participates shall be reduced to a Percentage
determined by multiplying the Managing Member's initial Investment
Percentage Interest by such Managing Member's then Vested Percentage; and,
if the Event of Forfeiture is a Clause Z Event, such Managing Member's
Investment Percentage Interest in each Investment in which such Managing
Member participates shall be reduced to zero. The Investment Percentage
Interest in each Investment of all other Managing Members (exclusive of any
Managing Member for whom an Event of Forfeiture has occurred) participating
in such Investment shall be increased by an aggregate amount equal to the
amount of the reduction in the Investment Percentage Interest of the
Managing Member for whom the Event of
-15-
Forfeiture has occurred (such increase to be allocated among them in
proportion to their respective Investment Percentage Interests in such
Investment immediately prior to the adjustment contemplated hereby).
(iii) Any amount held in any Vesting Escrow for the benefit of
such Managing Member shall be forfeited. Amounts so forfeited shall
(subject to the provisions of this Section 3.04 and Section 4.02), on an
Investment by Investment basis, be allocated to all other Managing Members
(exclusive of any Managing Member for whom an Event of Forfeiture has
occurred) participating in each such Investment (such distributions to be
allocated among them in proportion to their respective Investment
Percentage Interests in each such Investment immediately prior to the
adjustment contemplated hereby).
(iv) Such Managing Member (whether Voting or Non-Voting) shall
have no right to vote on or participate in any decision or matter on or in
which Managing Members are entitled to vote or participate and such
Managing Member shall be disregarded for all purposes in determining the
number of Managing Members which constitute a Majority in Number of the
Voting Managing Members or the number or percentage or Managing Members
entitled to vote on any matter, as the case may be.
(c) A Managing Member with respect to whom an Event of Forfeiture has
occurred: (i) shall not be entitled to participate in any Investment acquired
by the LLC (including without limitation, a Follow-on Investment) made by the
LLC after the date of the Event of Forfeiture; (ii) shall not be required to
make subsequent capital contributions to the LLC from and after the date of the
Event of Forfeiture, except for capital contributions required pursuant to
Section 3.01(b)(ii) and (iii); and (iii) shall automatically and without any
action on the part of the LLC, such Managing Member or any other Member, be
deemed to have withdrawn from the LLC on the first date on which the LLC no
longer owns any Investment in which such Managing Member has an Investment
Percentage Interest.
The Voting Managing Members shall make all determinations under this
Section 3.04 (including determinations as to when and whether an Event of
Forfeiture has occurred, and the reduction in the Percentage Interest and
Investment Percentage Interests of the affected Managing Member in connection
therewith), in their reasonable discretion.
ARTICLE IV
DISTRIBUTIONS
4.01 Distribution of Distributable Cash and Property and Distributable
-----------------------------------------------------------------
Other Cash.
----------
(a) Distributable Cash and Property of the LLC shall be distributed on
an Investment by Investment basis, at such times and in such amounts as the
Voting Managing
-16-
Members may in their reasonable discretion determine. Any non-cash distributions
made to the Members shall be valued at their respective fair market values, as
determined by the Voting Managing Members in good faith and in a manner
consistent with the valuation procedures established in the Domestic Fund
Agreement and the Foreign Fund Agreement. Distributable Other Cash shall be
distributed, in such amounts as the Voting Managing Members may determine, not
less frequently than quarterly, within 30 days following the last day of each
fiscal quarter of the LLC.
(b) Subject to the provisions of Sections 4.02 and 9.02(b) below: (i)
Distributable Cash and Property related to an Investment shall be distributed to
the Members in proportion to their respective Investment Percentage Interests in
such Investment on the date the LLC makes such distribution; and (ii)
Distributable Other Cash shall be distributed to the Members in proportion to
their respective Percentage Interests on the date the LLC makes such
distribution.
(c) The Voting Managing Members will use reasonable efforts to cause
the LLC to distribute to each Member in each year the Tax Distribution Amount
(as defined below), which amount shall be treated as an advance against future
distributions to such Member pursuant to Section 4.01(b) above. The Tax
Distribution Amount shall equal an amount which, when added to all distributions
previously made to the Member pursuant to this Section 4.01 from the inception
of the LLC, equals the product of (i) the Member's allocable share of the net
taxable income of the LLC computed on an aggregate cumulative basis from the
inception of the LLC and (ii) the highest combined marginal rate of federal and
Massachusetts state income tax applicable to individuals for any year since the
inception of the LLC. Separate Tax Distribution Amounts shall be computed with
respect to each Investment, and, to the extent practicable, the required
distribution of the Tax Distribution Amount attributable to a particular
Investment for a particular period shall be satisfied by a distribution of
Distributable Cash and Property attributable to such Investment. To the extent
that the required distribution of the Tax Distribution Amount attributable to a
particular Investment is satisfied by a distribution of Distributable Cash and
Property attributable to another Investment, rules similar to those set forth in
clause (ii) of the definition of "Distributable Cash and Property" shall apply.
-17-
4.02 Vesting Escrow.
--------------
(a) Notwithstanding the provisions of Section 4.01 above, the LLC
shall distribute to each Managing Member on the date of any distribution only
that portion of any Distributable Cash and Property to which he is entitled
which is equal to his Vested Percentage of such amount. Any portion of any
distribution which is not distributed as a result of the operation of this
Section 4.02(a) shall be held in escrow by the LLC, in accordance with this
Section 4.02. Any escrow established pursuant to this Section 4.02 is herein
referred to as a "Vesting Escrow." Subject to Section 3.04, on the last day of
each calendar quarter following the date of the distribution with respect to any
Investment, one-twentieth of the amount of the original distribution (plus a
proportionate amount of interest or other amounts earned thereon, if any), shall
be disbursed from such Vesting Escrow to such Managing Member.
(b) The interest of the Capital Member shall not be subject to the
provisions of this Section 4.02, and it shall at all times be entitled to
receive 100% of any distributions to Distributable Cash and Property allocable
to it pursuant to and in accordance with Section 4.01.
(c) Each of the Managing Members hereby agrees and acknowledges that,
as a result of the operation of this Section 4.02: (i) such Managing Member may
be allocated Net Profits and Net Losses of the LLC without corresponding
distributions of Distributable Cash or Property; (ii) the Managing Members are
authorized to and may (but shall not be required to) invest amounts that are
held in a Vesting Escrow in short-term investments pending distribution of such
amounts to the Managing Members; (iii) the LLC may hold in a Vesting Escrow
securities which would otherwise have been distributed to such Managing Member,
and the LLC shall be entitled to vote, transfer, sell, assign and exercise all
rights of ownership with respect to all such securities prior to their
distribution to the Managing Members in accordance with this Section 4.02; and
(iv) amounts held in escrow pursuant to this Section 4.02 shall be irrevocably
forfeited by a Managing Member from and after the date of any Event of
Forfeiture with respect to such Managing Member. If any property which is held
in escrow pursuant to this Section 4.02 is sold or otherwise disposed of, the
proceeds of such sale or other disposition shall be substituted in the Vesting
Escrow for such property, and released in accordance with Section 4.02(a) above
at the same time such property would have been released from such Vesting
Escrow.
(d) Upon the discontinuance of the activities of the LLC related to
the funding of additional investments after the Funds have been fully invested,
and with the approval of a Majority in Number of the Voting Managing Members,
the Vested Percentage of each Managing Member shall be increased to one hundred
percent (100%).
-18-
4.03 Certain Payments to the Internal Revenue Service Treated as
-----------------------------------------------------------
Distributions. Notwithstanding anything to the contrary herein, to the extent
-------------
that the LLC is required (as determined in the discretion of the Voting Managing
Members), or elects, pursuant to applicable law, either (i) to pay tax
(including estimated tax) on a Member's allocable share of LLC items of income
or gain, whether or not distributed, or (ii) to withhold and pay over to the tax
authorities any portion of a distribution otherwise distributable to a Member,
the LLC may pay over such tax or such withheld amount to the tax authorities,
and such amount shall be treated as a distribution to such Member at the time it
is paid to the tax authorities. In the event that the amount paid (or paid
over) to the tax authorities on behalf of a Member exceeds the amount that would
have been distributed to such Member absent such tax obligation, such excess
shall be treated as a demand loan from the LLC to such Member, which loan shall
bear interest at the prime rate announced from time to time by The Wall Street
Journal, until paid in full.
4.04 Distributions in Kind. A Member, regardless of the nature of his
---------------------
contribution to the LLC, shall have no right to demand or receive any
distribution from the LLC in any form other than cash. The LLC may, at any time
and from time to time, make distributions in kind to the Members. Any Member
entitled to any interest in such assets shall, unless otherwise determined by
the Members, receive separate assets of the LLC and not an interest as a tenant-
in-common with other Members so entitled in any asset being distributed.
4.05 Distributions Upon Transfer or Admission. In the event that a Member
----------------------------------------
acquires an interest in the LLC either by transfer from another Member or by
acquisition from the LLC, the LLC shall close its books as of the date of the
acquisition and Distributable Cash and Property and items thereof computed for
the portion of the year ending on the date of the acquisition shall be
distributed among the Members without regard to such acquisition, and
Distributable Cash and items thereof computed for the portion of the year
commencing on the day following the date of the acquisition shall be allocated
among the Members taking into account such acquisition. For purposes of this
Section 4.05, any modifications to a Member's Percentage Interest or Investment
Percentage Interest for any Investment, shall be treated as if a Member acquired
an interest in the LLC.
4.06 Right to Set Off Certain Amounts. The LLC may withhold from any
--------------------------------
amounts which are otherwise distributable to a Member in accordance with this
Agreement, and pay over to @Ventures Management, LLC, any amount which such
Member may owe to @Ventures Management, LLC pursuant to certain promissory notes
made by such Member to @Ventures Management, LLC, which notes evidence loans
made by @Ventures Management, LLC to such Member in order to enable such Member
to satisfy its capital contribution obligations to the LLC.
-19-
ARTICLE V
ALLOCATION OF NET PROFITS AND NET LOSSES
5.01 Basic Allocations.
-----------------
(a) Net Profits and Net Losses shall be computed on an Investment by
Investment basis as of the end of each fiscal year (or other relevant period).
Except as provided in Section 5.02 below (which shall be applied first) and
Section 5.01(b) below, Net Profits and Net Losses attributable to a particular
Investment shall be allocated among the Members in proportion to their
respective Investment Percentage Interests in such Investment. Net Profits and
Net Losses attributable to Other Cash Receipts shall be allocated among the
Members in proportion to their respective Percentage Interests.
(b) Notwithstanding Section 5.01(a) above, Net Profits and Net Losses
attributable to any assets held in a Vesting Escrow shall be specially allocated
to the Managing Member to whom such Vesting Escrow relates.
(c) For purposes of this Article V, the amount of the Net Profits or
Net Losses from any Investment (treating all sources of Other Cash Receipts as
one Investment) shall be determined by allocating expenses incurred by the LLC
among the Investments in the same manner that expenses are allocated pursuant to
the last sentence of the definition of "Distributable Cash and Property."
(d) Allocations of Net Profits and Net Losses provided for in this
Section 5.01 shall generally be made as of the end of the fiscal year of the
LLC; provided, however, that allocations of items of Net Profits and Net Losses
-------- -------
described in clause (vi) of the definition of "Net Profits" and "Net Losses"
shall be made at the time deemed realized as described in the definition of
"Capital Account."
(e) Upon admission of any Managing Member to the LLC following the
date of formation of the LLC, any deduction attributable to such admission shall
be allocated among the Managing Members of the LLC (determined immediately prior
to the admission of such new Managing Member), in proportion to such Managing
Members' respective Percentage Interests as in effect immediately prior to such
admission.
5.02 Regulatory Allocations. Notwithstanding the provisions of Section
----------------------
5.01 above, the following allocations of Net Profits, Net Losses and items
thereof shall be made in the following order of priority:
(a) Items of income or gain (computed with the adjustments contained
in paragraphs (i), (ii) and (iii) of the definition of "Net Profits and Net
Losses") for any taxable period shall be allocated to the Members in the manner
and to the minimum extent required by the
-20-
"minimum gain chargeback" provisions of Treasury Regulation Section 1.704-2(f)
and Treasury Regulation Section 1.704-2(i)(4).
(b) All "nonrecourse deductions" (as defined in Treasury Regulation
Section 1.704-2(b)(1)) of the LLC for any year shall be allocated to the Members
in the manner in which Net Profits and Net Losses are allocated; provided,
however, that nonrecourse deductions attributable to "partner nonrecourse debt"
(as defined in Treasury Regulation Section 1.704-2(b)(4)) shall be allocated to
the Members in accordance with the provisions of Treasury Regulation Section
1.704-2(i)(1).
(c) Items of income or gain (computed with the adjustments contained
in paragraphs (i), (ii) and (iii) of the definition of "Net Profits and Net
Losses") for any taxable period shall be allocated to the Members in the manner
and to the extent required by the "qualified income offset" provisions of
Treasury Regulation Section 1.704-1(b)(2)(ii)(d).
(d) In no event shall Net Losses of the LLC be allocated to a Member
if such allocation would cause or increase a negative balance in such Member's
Capital Account (determined for purposes of this Section 5.02(d) only, by
increasing the Member's Capital Account balance by (i) the amount the Member is
obligated to restore to the LLC pursuant to Treasury Regulation Section 1.704-
1(b)(2)(ii)(c) and (ii) such Member's share of "minimum gain" and of "partner
nonrecourse debt minimum gain" as determined pursuant to Treasury Regulation
Sections 1.704-2(g) and 1.704-2(i)(5), respectively).
(e) Except as otherwise provided herein or as required by Code
Section 704, for tax purposes, all items of income, gain, loss, deduction or
credit shall be allocated to the Members in the same manner as are Net Profits
and Net Losses; provided, however, that if the Carrying Value of any property of
the LLC differs from its adjusted basis for tax purposes, then items of income,
gain, loss, deduction or credit related to such property for tax purposes shall
be allocated among the Members so as to take account of the variation between
the adjusted basis of the property for tax purposes and its Carrying Value in
the manner provided for under Code Section 704(c).
(f) In the event that Net Profits, Net Losses or items thereof in
respect of any Investment are allocated to one or more Members pursuant to
subsections (a) or (b) above, subsequent Net Profit, Net Losses or items thereof
will first be allocated (subject to the provisions of subsections (a) and (b))
to the Members in a manner designed to result in each Member having been
allocated an amount of Net Profits, Net Losses or items thereof attributable to
each Investment as such Member would have been allocated had Section 5.02 not
been contained in this Agreement.
5.03 Allocations Upon Transfer or Admission. In the event that a Member
--------------------------------------
acquires an interest in the LLC either by transfer from another Member or by
acquisition from the LLC, the LLC shall close its books as of the date of the
acquisition and Net Profits, Net Losses and items
-21-
thereof computed for the portion of the year ending on the date of the
acquisition shall be allocated among the Members without regard to such
acquisition, and Net Profits, Net Losses and items thereof computed for the
portion of the year commencing on the day following the date of the acquisition
shall be allocated among the Members taking into account such acquisition. For
purposes of this Section 5.03, any modifications to a Member's Percentage
Interest or Investment Percentage Interest for any Investment, shall be treated
as if a Member acquired an interest in the LLC.
ARTICLE VI
MANAGEMENT
6.01 Management of the LLC. (a) Subject to the provisions of this
---------------------
Agreement and the Act, all powers shall be exercised by or under the authority
of, and the business and affairs of the LLC shall be controlled by the Members.
(b) Except to the extent that this Agreement specifically provides
for a higher or lower number or percentage of Members, all decisions respecting
any matter set forth herein or otherwise affecting or arising out of the conduct
of the business of the LLC shall be made by action of a Majority in Number of
the Voting Managing Members; provided that, Voting Managing Members with respect
to whom an Event of Forfeiture has occurred shall have no right to vote on or
participate in any matter or decision to be made by the Voting Managing Members
and shall be disregarded for all purposes in determining the number of Voting
Managing Members which constitute a Majority in Number of the Voting Managing
Members. Except to the extent specifically provided in this Agreement, the Non-
Voting Managing Members shall not be entitled to vote on, consent to or approve
any matter relating to the conduct of the LLC's business. The Voting Managing
Members, by action of a Majority in Number thereof, may at any time and from
time to time change the status of any Managing Member from Voting to Non-Voting,
and vice versa.
Subject to the foregoing, the Voting Managing Members shall have the
exclusive right and full authority to manage, conduct and operate the LLC
business. Specifically, but not by way of limitation, the Voting Managing
Members (by action of such Majority in Number) shall be authorized, for and on
behalf of the LLC:
(i) to borrow money, to issue evidences of indebtedness and to
guarantee the debts of others for whatever purposes they may specify, and,
as security therefor, to pledge or otherwise encumber the assets of the
LLC;
(ii) to cause to be paid on or before the due date thereof all
amounts due and payable by the LLC to any person or entity;
-22-
(iii) to employ such agents, employees, managers, accountants,
attorneys, consultants and other persons necessary or appropriate to carry
out the business and affairs of the LLC, whether or not any such persons so
employed are Members or are affiliated or related to any Member, and to pay
such fees, expenses, salaries, wages and other compensation to such persons
as the Members shall in their sole discretion determine;
(iv) to pay, extend, renew, modify, adjust, submit to
arbitration, prosecute, defend or compromise, upon such terms as they may
determine and upon such evidence as they may deem sufficient, any
obligation, suit, liability, cause of action or claim, including taxes,
either in favor of or against the LLC;
(v) to pay any and all fees and to make any and all
expenditures which the Voting Managing Members, in their discretion, deem
necessary or appropriate in connection with the organization of the LLC,
and the carrying out of its obligations and responsibilities under this or
any other Agreement;
(vi) to invest the assets of the LLC, and to lease, sell,
finance, refinance or dispose of all or any portion of the LLC's property;
(vii) to cause the LLC to make or revoke any of the elections
referred to in Sections 108, 704, 709, 754 or 1017 of the Code or any
similar provisions enacted in lieu thereof, or in any other Section of the
Code;
(viii) to establish and maintain reserves for such purposes and
in such amounts as they deem appropriate from time to time;
(ix) to pay all organizational expenses and general and
administrative expenses of the LLC;
(x) to deal with, or otherwise engage in business with, or
provide services to and receive compensation therefor from, any person who
has provided or may in the future provide any services to, lend money to,
sell property to, or purchase property from the LLC, including without
limitation, a Member;
(xi) to engage in any kind of activity and to perform and carry
out contracts of any kind necessary to, or in connection with, or
incidental to the accomplishment of the purposes of the LLC;
(xii) to compromise the obligation of a Member to make a
contribution to the capital of the LLC or to return to the LLC money or
other property paid or distributed to such Member in violation of this
Agreement or the Act;
-23-
(xiii) to cause to be paid any and all taxes, charges and
assessments that may be levied, assessed or imposed upon any of the assets
of the LLC, unless the same are contested by the Voting Managing Members;
(xiv) to exercise all powers and authority granted by the Act to
members, except as otherwise specifically provided in this Agreement;
(xv) to cause the LLC to take any of the foregoing actions in
the name and on behalf of the Funds, in the LLC's respective capacity as a
general partner or managing member, as applicable, of any Fund;
(xvi) to exercise all other rights, powers, privileges and other
incidents of ownership with respect to the interest of the LLC in each of
the Funds, and to perform the LLC's respective obligations under the Fund
Agreements.
(c) Notwithstanding the foregoing, the Voting Managing Members shall
not be authorized to take any of the following actions without the prior
approval of the Capital Member:
(i) to do any act that is in contravention of this Agreement
or that is not consistent with the purposes of the LLC;
(ii) to do any act that would make it impossible to carry on
the ordinary business of the LLC;
(iii) to guarantee the obligations of any Portfolio Company; or
(iv) to take any other action which requires the consent of the
Capital Member pursuant to this Agreement.
Other than as set forth in this Section 6.01(c), the Capital Member shall not
participate in the management or control of the LLC and shall have no authority
to act for or bind the LLC.
(d) Any Managing Member is authorized to execute, deliver and file on
behalf of the LLC any documents to be filed with the Secretary of State of the
State of Delaware or comparable authorities of other jurisdictions. The
signature of one Managing Member on any agreement, contract, instrument or other
document shall be sufficient to bind the LLC in respect thereof and conclusively
evidence the authority of such Managing Member and the LLC with respect thereto,
and no third party need look to any other evidence or require the joinder or
consent of any other party.
(e) Each Managing Member is authorized to use the title "Managing
Director" when acting on behalf of the LLC in the conduct of the LLC's business.
-24-
(f) The Voting Managing Members, by action of a Majority in Number
of the Voting Managing Members exclusive of the Managing Member as to whom the
determination is being made, shall determine whether or not "Cause" is present
in connection with the termination of the relationship of a Managing Member with
the LLC. A Managing Member's relationship with the LLC may be terminated for
Cause only after a hearing to consider the matter. Any such hearing shall be
held only after written notice has been given to all Members, including the
Managing Member proposed to be terminated. Such notice must be given not less
than 10 days prior to such hearing, and must specify the time and place at which
the hearing will be held, and a general statement of the nature of the charges
against the Managing Member proposed to be terminated. At such hearing, the
Managing Member proposed to be terminated will have an opportunity to respond to
the charges constituting Cause. None of the Members (including the Managing
Member proposed to be terminated), may be represented at such hearing by counsel
or other representatives. At the time any such notice is given, or any time
thereafter, but prior to a decision of a Majority in Number of the Voting
Managing Members following the hearing, a Majority in Number of the Voting
Managing Members (exclusive of the Member proposed to be terminated) may
immediately relieve the Managing Member proposed to be terminated of his or her
duties and responsibilities hereunder pending a decision.
6.02 Tax Matters Partner. Xxxxxx X. Xxxxx shall be the tax matters
-------------------
partner for the LLC pursuant to Code Sections 6221 through 6231.
6.03 Liability of the Members; Indemnification.
-----------------------------------------
(a) No Member shall be liable to the LLC or any other Member for any
act or omission taken by the Member in good faith and in the belief that such
act or omission is in the best interests of the LLC; provided that such act or
omission is not in violation of this Agreement and does not constitute
negligence, misconduct, fraud or a willful violation of law by the Member. No
Member shall be liable to the LLC or any other Member for any action taken by
any other Member, nor shall any Member (in the absence of negligence,
misconduct, fraud or a willful violation of law by the Member) be liable to the
LLC or any other Member for any action of any employee or agent of the LLC
provided that the Member shall have exercised appropriate care in the selection
and supervision of such employee or agent.
-25-
(b) Each Member and its respective partners, agents, employees and
Affiliates (the "Indemnitees") shall be and hereby are (i) indemnified and held
harmless by the LLC and (ii) released by the other Members from and against any
and all claims, demands, liabilities, costs, expenses, damages, losses, suits,
proceedings and actions for which such Indemnitee has not otherwise been
reimbursed (collectively, "Liabilities"), whether judicial, administrative,
investigative or otherwise, of any nature whatsoever, known or unknown,
liquidated or unliquidated, that may accrue to the LLC or any other Member or in
which any of the Indemnitees may become involved, as a party or otherwise,
arising out of the conduct of the business or affairs of the LLC by the
respective Indemnitee or otherwise relating to this Agreement, provided that an
Indemnitee shall not be entitled to indemnification or release hereunder if it
shall have been determined by (i) in the case of the Capital Member or an
Indemnitee claiming by or through the Capital Member, a court of competent
jurisdiction, or (ii) in the case of any Managing Member or an Indemnitee
claiming by or through the Managing Member, by the Capital Member, that (x) such
person did not act in good faith and in a manner such person reasonably believed
to be in the best interests of the LLC and, in the case of a criminal
proceeding, did not have reasonable cause to believe that its conduct was
lawful, or (y) such Liabilities shall have arisen from a violation of this
Agreement or the negligence, misconduct, fraud or willful violation of law by
such Indemnitee, or actions of such Indemnitee outside the scope of and
unauthorized by this Agreement, and provided further that an Indemnitee shall
not be entitled to indemnification hereunder with respect to any liability
arising in connection with its activities performed for or on behalf of any
Portfolio Company, the securities of which have been sold or have been
distributed to the Members pursuant to Article IV, if such activities were
performed after the date on which such securities were sold or distributed. The
termination of any proceeding by settlement shall not, of itself, create a
presumption that the Indemnitee did not act in good faith and in a manner that
such person reasonably believed to be in the best interests of the LLC or that
the Indemnitee did not have reasonable cause to believe that its conduct was
lawful. The indemnification rights provided for in this Section 6.03 shall
survive the termination of the LLC or this Agreement.
Expenses incurred by an Indemnitee in defense or settlement of any claim
that may be subject to a right of indemnification hereunder may be advanced by
the LLC prior to the final disposition thereof provided that the following
conditions are satisfied: (i) the claim relates to the performance of duties or
services by the Indemnitee on behalf of the LLC and (ii) the Indemnitee
undertakes to repay the advanced funds to the LLC if it is ultimately determined
that the Indemnitee is not entitled to be indemnified hereunder or under
applicable law. The right of any Indemnitee to indemnification provided herein
shall be cumulative of, and in addition to, any and all rights to which such
Indemnitee may otherwise be entitled by contract or as a matter of law or equity
and shall extend to such Indemnitee's successors, assigns and legal
representatives. The obligations of the Members under this Section 6.03(b) shall
be satisfied only after any applicable insurance proceeds have been exhausted
and then only out of LLC assets and, to the extent required by law,
distributions made by the LLC to the Members, and the Members shall have no
liability to fund any indemnification payment hereunder.
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6.04 Liability of Members. The liability of the Members for the losses,
--------------------
debts and obligations of the LLC shall be limited to their capital
contributions; provided, however, that under applicable law, the Members may
under certain circumstances be liable to the LLC to the extent of previous
distributions made to them in the event that the LLC does not have sufficient
assets to discharge its liabilities.
6.05 Certain Fees and Expenses. All out-of-pocket expenses reasonably
-------------------------
incurred by any Member in connection with the LLC's business (including an
allocable share of certain overhead and similar expenses of the Capital Member)
shall be paid by the LLC or reimbursed to the Member by the LLC.
6.06 Other Activities.
----------------
(a) Subject to Sections 6.06(b) and Section 6.07 below, the Members
and their respective Affiliates may engage in and possess interests in other
business ventures and investment opportunities of every kind and description,
independently or with others, including serving as directors, officers,
stockholders, managers, members and general or limited partners of corporations,
partnerships or other limited liability companies with purposes similar to or
the same as those of the LLC. Neither the LLC nor any other Member shall have
any rights in or to such ventures or opportunities or the income or profits
therefrom.
(b) Each Managing Member agrees that (I) during his or her
employment by the Employer, and (II) while he or she holds any interest in the
LLC, and (III) for a period of three (3) years following termination of his or
her employment relationship with the Employer if such employment is terminated:
(A) by the Managing Member voluntarily, or (B) by the Employer for Cause, such
Managing Member will not, directly or indirectly:
(x) recruit, solicit or induce, or attempt to induce, any
employee or consultant of the Employer or of any Portfolio Company or of
any Affiliate of any of them to terminate his or her employment with, or
otherwise cease any relationship with, the Employer or any Portfolio
Company or any Affiliate of any of them; or
(y) solicit, divert, take away, or attempt to divert or take
away, any investment opportunity with respect to any Portfolio Company or
any investment opportunity with respect to any prospective investment or
prospective portfolio company which the Employer contacted or solicited
during such Managing Member's employment relationship with the Employer.
If any restriction set forth herein is found by any court to be unenforceable
because it extends for too long a period of time, or over too great a range of
activities, or over too broad a geographic area, the restriction shall be
interpreted to extend only over the maximum period of time, range of activities,
or geographic area which the court finds to be enforceable. Each Managing
Member acknowledges and agrees that the restrictions contained in this Section
6.06(b) are necessary for
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the protection of the business and goodwill of the Employer, the Portfolio
Companies and the Affiliates of any of them and are considered by such Managing
Member to be reasonable for such purpose and that his or her interest in the LLC
is being received partly in consideration for the foregoing covenant.
6.07 Commitment of Members. Each of the Managing Members hereby agrees to
---------------------
use its best efforts in connection with the purposes and objectives of the LLC
and to devote to such purposes and objectives such of its time and resources as
shall be necessary for the management of the affairs of the LLC.
6.08 Conflicts of Interest. No contract or transaction between the LLC
---------------------
and one or more of its Members or Affiliates, or between the LLC and any other
corporation, partnership association or other organization in which one or more
of its Members or Affiliates are directors, officers, members, managers or
partners or have a financial interest, shall be void or voidable solely for such
reason, or solely because the Member or Affiliate is present at or participates
in any meeting of Managing Members which authorizes the contract or transaction,
or solely because his, her or its votes are counted for such purpose, if:
(i) the material facts as to his, her or its interest as to
the contract or transaction are disclosed or are known to the Voting
Managing Members and the Voting Managing Members authorize the contract or
transaction by a vote sufficient for such purpose without counting the vote
of any interested Voting Managing Member even though the disinterested
Voting Managing Members may be less than a Majority in Number of the Voting
Managing Members entitled to vote thereon; or
(ii) the material facts as to his, her or its interest and as
to the contract or transaction are disclosed or are known to the Voting
Managing Members entitled to vote thereon, and the contract or transaction
is specifically approved by a vote of the Voting Managing Members; or
(iii) the contract or transaction is fair to the LLC or its
Affiliates as of the time it is authorized, approved or ratified by the
Voting Managing Members.
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ARTICLE VII
BOOKS, RECORDS AND BANK ACCOUNTS
7.01 Books and Records. The Managing Members shall keep or cause to be
-----------------
kept just and true books of account with respect to the operations of the LLC.
Such books shall be maintained at the LLC's principal place of business, or at
such other place as the Members shall determine, and all Members, and their duly
authorized representatives, shall at all reasonable times have access to such
books as well as any information required to be made available to the Members
under the Act. The Managing Members shall not be required to deliver or mail
copies of the LLC's Certificate of Formation or copies of certificates of
amendment thereto or cancellation thereof to the Members, although such
documents shall be available for review and/or copying by the Members at the
LLC's principal place of business.
7.02 Accounting Basis and Fiscal Year. The LLC's books shall be kept on
--------------------------------
the accrual method of accounting, or on such other method of accounting as the
Members may from time to time determine, and shall be closed and balanced at the
end of each fiscal year of the LLC. The fiscal year of the LLC shall be the
calendar year.
7.03 Bank Accounts. The Managing Members shall be responsible for causing
-------------
one or more accounts to be maintained in a bank (or banks), which accounts shall
be used for the payment of the expenditures incurred by the Managing Members in
connection with the business of the LLC, and in which shall be deposited any and
all cash receipts of the LLC. All deposits and funds not needed for the
operations of the LLC may be invested in such short-term investments as the
Managing Members may determine. All such amounts shall be and remain the
property of the LLC, and shall be received, held and disbursed by the Managing
Members for the purposes specified in this Agreement. There shall not be
deposited in any of said accounts any funds other than funds belonging to the
LLC, and no other funds shall in any way be commingled with such funds.
7.04 Reports to Members. Within 90 days after the end of each fiscal
------------------
year, the Managing Members shall cause the LLC to furnish to each Member (i)
such information as may be needed to enable the Members to file their federal
income tax returns and any required state income tax returns, and (ii) an
audited balance sheet of the LLC as of the last day of such fiscal year, and
audited financial statements of the LLC for such fiscal year. The cost of such
reporting shall be paid by the LLC as a LLC expense. Any Member may, at any
time, at its own expense, cause an audit of the XXX xxxxx to be made by a
certified public accountant of its own selection. All expenses incurred by such
accountant shall be borne by such Member.
ARTICLE VIII
TRANSFERS OF INTERESTS OF MEMBERS
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8.01 Substitution and Assignment of Member's Interest.
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(a) Subject to Section 8.01(b) below, no Managing Member may sell,
transfer, assign, pledge, hypothecate or otherwise dispose of all or any part of
its interest in the LLC (whether voluntarily, involuntarily or by operation of
law), unless (i) the Capital Member and (ii) a Majority in Number of the Voting
Managing Members (exclusive of the transferor) shall have previously consented
to such transfer, assignment, pledge, hypothecation or disposition in writing,
the granting or denying of which consent shall be in such Members' absolute
discretion. The provisions of this Section 8.01(a) shall not be applicable to
any assignment of the interest of a Managing Member to a Permitted Transferee
(provided that no such Permitted Transferee may be admitted to the LLC as a
substitute Member except as provided in Section 8.01(c) below). Subject to
Section 8.01(b) below, the Capital Member may sell, transfer, assign, pledge,
hypothecate or otherwise dispose of all or any part of its interest in the LLC
without the consent or approval of any other Member, provided that the
transferee of any such interest may not be admitted to the LLC as a substitute
Member except as provided in Section 8.01(c) below.
(b) No assignment of the interest of a Member shall be made if, in
the opinion of counsel to the LLC, such assignment (i) may not be effected
without registration under the Securities Act of 1933, as amended, (ii) would
result in the violation of any applicable state securities laws, (iii) would
result in a termination of the LLC under Section 708 of the Code, unless such a
transfer is consented to by (i) the Capital Member and (ii) a Majority in Number
of the Voting Managing Members, (iv) would result in the treatment of the LLC as
an association taxable as a corporation or as a "publicly-traded limited
partnership" for tax purposes, unless such a transfer is consented to by all
Members or (v) would require the LLC or any Fund to register as an investment
company under the Investment Company Act of 1940, as amended, or as an
investment advisor under the Investment Advisors Act of 1940, as amended. The
LLC shall not be required to recognize any assignment until the instrument
conveying such interest has been delivered to the LLC for recordation on the
books of the LLC. Unless an assignee becomes a substituted Member in accordance
with the provisions of Section 8.01(c), it shall not be entitled to any of the
rights granted to a Member hereunder, other than the right to receive all or
part of the share of the Net Profits, Net Losses, distributions of cash or
property or returns of capital to which his assignor would otherwise be
entitled.
(c) An assignee of the interest of a Member, or any portion thereof,
shall become a substituted Member entitled to all the rights of a Member if, and
only if:
(i) the assignor gives the assignee such right;
(ii) in the case of an assignee of a Managing Member, the
Capital Member and a Majority in Number of the Voting Managing Members
(exclusive of the assignor) consent to such substitution, the granting or
denying of which consent shall be in the other Members' absolute
discretion;
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(iii) in the case of an assignee of the Capital Member, a
Majority in Number of the Voting Managing Members consent to such
substitution, the granting or denying of which consent shall be in the
Voting Managing Members' absolute discretion, except that, in the case of a
transfer all or substantially all of the business or assets of CMGI (by
sale of assets, sale of stock, merger or otherwise), including its indirect
interest in the LLC, no such consent of the Voting Managing Members shall
be required;
(iv) the assignee or the assignor pays to the LLC all costs and
expenses incurred in connection with such substitution, including
specifically, without limitation, costs incurred in the review and
processing of the assignment and in amending this Agreement; and
(v) the assignee executes and delivers such instruments, in
form and substance satisfactory to the LLC, as may be necessary or
desirable to effect such substitution and to confirm the agreement of the
assignee to be bound by all of the terms and provisions of this Agreement.
Unless a Majority in Number of the Voting Managing Members (exclusive of the
assignor) otherwise approve, any assignee of the interest of a Voting Managing
Member who becomes a substitute Managing Member shall be and become a Voting
Managing Member, and any assignee of the interest of a Non-Voting Managing
Member who becomes a substitute Managing Member shall be and become a Non-Voting
Managing Member.
(d) The LLC and the Members shall be entitled to treat the record
owner of any interest in the LLC as the absolute owner thereof in all respects,
and shall incur no liability for distributions of cash or other property made in
good faith to such owner until such time as a written assignment of such
interest has been received and accepted by the Managing Members and recorded on
the books of the LLC. The Managing Members may refuse to accept an assignment
until the end of the next successive quarterly accounting period. In no event
shall any interest in the LLC, or any portion thereof, be sold, transferred or
assigned to a minor or incompetent, and any such attempted sale, transfer or
assignment shall be void and ineffectual and shall not bind the LLC.
(e) If a Member who is an individual dies or a court of competent
jurisdiction adjudges him to be incompetent to manage his person or his
property, the Member's executor, administrator, guardian, conservator or other
legal representative may exercise all of the Member's rights hereunder, but
solely for the purpose of settling his estate or administering his property, and
in no event shall such executor, administrator, guardian, conservator or legal
representative participate in any way in the conduct of the business of the LLC,
or in the making of any decision or the taking of any action provided for
hereunder (including without limitation, Section 6.01(a) or (b)) for any other
purpose. If a Member is a corporation, trust or other entity, and is dissolved
or terminated, the powers of that Member may be exercised by its legal
representative or successor.
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8.02 Additional Members.
------------------
(a) Except as provided in Section 8.01, additional Members may be
admitted to the LLC only upon the written consent of the Capital Member and a
Majority in Number of the Voting Managing Members. Any such consent shall
specify (i) the capital contribution, if any, and the Percentage Interest of the
additional Member, (ii) whether such Managing Member is a Voting or Non-Voting
Managing Member and (iii) any other rights and obligations of such additional
Member. Such approval shall bind all Members. In connection with any such
admission of an additional Member, this Agreement (including Schedules A and B)
----------- -
shall be amended to reflect the additional Member, its capital contribution, if
any, its Percentage Interest, its Vesting Commencement Date, and any other
rights and obligations of the additional Member. In connection with any such
admission of an additional Member, the Percentage Interest or other rights and
interests of the Capital Member in the LLC may not be diluted or otherwise
modified or adjusted without the specific written consent of the Capital Member.
(b) Unless all Voting Managing Members (exclusive of those with
respect to whom an Event of Forfeiture has occurred) otherwise agree, in
connection with the admission of any additional Managing Member to the LLC, the
Percentage Interests of all Managing Members shall be diluted proportionately
based on their respective Percentage Interests immediately prior to any such
admission.
(c) Each Managing Member, and each person who is hereinafter
admitted to the LLC as a Managing Member, hereby (i) consents to the admission
to the LLC of any such third party on such terms as may be approved by the
Members in accordance with this Section 8.02, and to any amendment to this
Agreement which may be necessary or appropriate to reflect the admission of any
such third party and the terms of its interest in the LLC, and (ii) acknowledges
that, in connection with any admission of any such person, such Member's
interest in allocations of Net Profits and Net Losses and distributions of cash
and property of the LLC, and net proceeds upon liquidation of the LLC, may be
diluted or otherwise altered (subject to the provisions of this Section 8.02).
Any amendment to this Agreement which shall be made in order to effectuate the
provisions of this Section 8.02 shall be executed by the Capital Member and a
Majority in Number of the Voting Managing Members, and any such amendment shall
be binding upon all of the Members.
8.03 Reallocation of Percentage Interests. The Voting Managing Members,
------------------------------------
by action of a Majority in Number thereof, may not later than 10 business days
following the commencement of any fiscal year, elect to modify the respective
Percentage Interests of the Managing Members. Any such determination to modify
the Percentage Interests of the Managing Members shall be made based on the
respective professional and managerial contribution and anticipated contribution
to the business of the LLC of the Managing Members, and any such determination
shall take effect as of the first day of such fiscal year, and shall not
otherwise have any retroactive effect. In no event shall the Percentage Interest
of the Capital Member be
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modified or adjusted as a result of this Section 8.03. In connection with any
such adjustment, Schedule B shall be amended accordingly, and all Members shall
----------
be bound by the determination of a Majority in Number of the Voting Managing
Members.
ARTICLE IX
DISSOLUTION AND TERMINATION
9.01 Events of Dissolution.
---------------------
(a) The LLC shall be dissolved:
(i) on a date designated in writing by (A) the Capital Member
and (B) a Majority in Number of the Voting Managing Members;
(ii) following the dissolution (following which the business is
not continued) of the last to dissolve of the Funds, and the liquidation of
all of assets of the Funds and the winding up of their respective
businesses;
(iii) upon the sale or other disposition of all of the LLC's
assets; or
(iv) upon the entry of a decree of judicial dissolution under
Section 18-802 of the Act.
(b) Dissolution of the LLC shall be effective on the day on which
the event occurs giving rise to the dissolution, but the LLC shall not terminate
until the LLC's Certificate of Formation shall have been cancelled and the
assets of the LLC shall have been distributed as provided herein.
Notwithstanding the dissolution of the LLC, prior to the termination of the LLC,
as aforesaid, the business of the LLC and the affairs of the Members, as such,
shall continue to be governed by this Agreement. A liquidator appointed by the
Voting Managing Members (who may be a Member), shall liquidate the assets of the
LLC, and distribute the proceeds thereof as contemplated by this Agreement and
cause the cancellation of the LLC's Certificate of Formation.
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9.02 Distributions Upon Liquidation.
------------------------------
(a) After payment of liabilities owing to creditors, the liquidator
shall set up such reserves as it deems reasonably necessary for any contingent
or unforeseen liabilities or obligations of the LLC (including without
limitation, any liabilities or obligations to the Funds). Said reserves may be
paid over by such liquidator to a bank, to be held in escrow for the purpose of
paying any such contingent or unforeseen liabilities or obligations and, at the
expiration of such period as such liquidator may deem advisable, such reserves
shall be distributed to the Members or their assigns in the manner set forth in
paragraph (b) below.
(b) After paying such liabilities and providing for such reserves,
the liquidator shall cause the remaining net assets of the LLC to be distributed
to all Members with positive Capital Account balances (after such balances have
been adjusted to reflect all debits and credits required by applicable Treasury
Regulations under Section 704(b) of the Code for all events through and
including the distribution in liquidation of the LLC), in proportion to and to
the extent of such positive balances. In the event that any part of such net
assets consists of notes or accounts receivable or other non-cash assets, the
liquidator may take whatever steps it deems appropriate to convert such assets
into cash or into any other form which would facilitate the distribution
thereof. If any assets of the LLC are to be distributed in kind, such assets
shall be distributed on the basis of their fair market value net of any
liabilities. No Member other than the Capital Member shall have any right or
interest in or to the name "@ Ventures" and all rights and interest in such name
shall, upon termination of the LLC, be assigned and transferred to the Capital
Member.
ARTICLE X
MISCELLANEOUS
10.01 Notices. Except as otherwise specifically provided in this
-------
Agreement, any and all notices, requests, elections, consents or demands
permitted or required to be made under this Agreement shall be in writing,
signed by the Member giving such notice, request, election, consent or demand,
and shall be delivered personally, or sent by registered or certified mail, or
by overnight mail, Federal Express or other similar commercial overnight
courier, to the other Member or Members at their addresses set forth in Schedule
--------
A, and, in the case of a notice to the LLC, at the address of its principal
-
office as set forth in Article I hereof, or at such other address as may be
supplied by written notice given in conformity with the terms of this Section
10.01. The date of personal delivery, three days after the date of mailing, the
business day after delivery to an overnight courier, as the case may be, or the
date of actual delivery if sent by any other method, shall be the date of such
notice.
10.02 Successors and Assigns. Subject to the restrictions on transfer set
----------------------
forth herein, this Agreement, and each and every provision hereof, shall be
binding upon and shall inure to the
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benefit of the Members, their respective successors, successors-in-title, heirs
and assigns, and each and every successor-in-interest to any Member, whether
such successor acquires such interest by way of gift, purchase, foreclosure, or
by any other method, shall hold such interest subject to all of the terms and
provisions of this Agreement.
10.03 Amendments. Except as otherwise specifically provided in this
----------
Agreement (including without limitation, Section 3.04 and Article VIII), this
Agreement may be amended or modified only by (i) the Capital Member and (ii) a
Majority in Number of the Voting Managing Members; provided that (x) no such
amendment shall increase the liability of, increase the obligations of or
adversely affect the interest of, any Member without the specific approval of
such Member (other than upon the occurrence of an Event of Forfeiture, upon
admission of a Managing Member in accordance with Section 8.02 or upon the
adjustment of the Percentage Interests of the Managing Members in accordance
with Section 8.03); (y) if any provision of this Agreement provides for the
approval or consent of a greater number of Members or of Members holding a
higher percentage of the total Percentage Interests of the Members, any
amendment effectuated pursuant to such provision, and any amendment to such
provision, shall require the approval or consent of such greater number of
Members or of Members holding such higher percentage of Percentage Interests;
and (z) subject to clauses (x) and (y) above, any amendment to this Section
10.03 shall require the approval of (i) the Capital Member and (ii) Managing
Members holding not less than two-thirds of all Percentage Interests held by all
Managing Members.
10.04 Partition. The Members hereby agree that no Member nor any
---------
successor-in-interest to any Member, shall have the right while this Agreement
remains in effect to have the property of the LLC partitioned, or to file a
complaint or institute any proceeding at law or in equity to have the property
of the LLC partitioned, and each Member, on behalf of himself, his successors,
representatives, heirs and assigns, hereby waives any such right. It is the
intention of the Members that during the term of this Agreement, the rights of
the Members and their successors-in-interest, as among themselves, shall be
governed by the terms of this Agreement, and that the right of any Member or
successor-in-interest to assign, transfer, sell or otherwise dispose of his
interest in the LLC shall be subject to the limitations and restrictions of this
Agreement.
10.05 No Waiver. The failure of any Member to insist upon strict
---------
performance of a covenant hereunder or of any obligation hereunder, irrespective
of the length of time for which such failure continues, shall not be a waiver of
such Member's right to demand strict compliance in the future. No consent or
waiver, express or implied, to or of any breach or default in the performance of
any obligation hereunder, shall constitute a consent or waiver to or of any
other breach or default in the performance of the same or any other obligation
hereunder.
10.06 Entire Agreement. This Agreement constitutes the full and complete
----------------
agreement of the parties hereto with respect to the subject matter hereof.
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10.07 Captions. Titles or captions of Articles or sections contained in
--------
this Agreement are inserted only as a matter of convenience and for reference,
and in no way define, limit, extend or describe the scope of this Agreement or
the intent of any provision hereof.
10.08 Counterparts. This Agreement may be executed in a number of
------------
counterparts, all of which together shall for all purposes constitute one
Agreement, binding on all the Members notwithstanding that all Members have not
signed the same counterpart.
10.09 Applicable Law. This Agreement and the rights and obligations of
--------------
the parties hereunder shall be governed by and interpreted, construed and
enforced in accordance with the laws of the State of Delaware.
10.10 Gender, Etc. In the case of all terms used in this Agreement, the
-----------
singular shall include the plural and the masculine gender shall include the
feminine and neuter, and vice versa, as the context requires.
10.11 Creditors. None of the provisions of this Agreement shall be for
---------
the benefit of or enforceable by any creditor of any Member or of the LLC other
than a Member who is such a creditor of the LLC.
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IN WITNESS WHEREOF, the Members have signed and sworn to this Agreement
under penalties of perjury as of the date first above written.
CAPITAL MEMBER:
CMG @ VENTURES CAPITAL CORP.
By: /s/ Xxxxxx X. Xxxxxxxx III
--------------------------
Name: Xxxxxx X. Xxxxxxxx III
Title: Authorized Signer
MANAGING MEMBERS:
/s/ Xxx X. Xxxxxxx
------------------
Xxx X. Xxxxxxx
/s/ Xxxxxxxx Xxxxxxxxx
----------------------
Xxxxxxxx Xxxxxxxxx
/s/ Xxxxx X. Xxxxx
------------------
Xxxxx X. Xxxxx
/s/ Xxxx Xxxxxxx
----------------
Xxxx Xxxxxxx
/s/ Xxxx Xxxxxxxxxxxx
---------------------
Xxxx Xxxxxxxxxxxx
/s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxxx, Xx.
------------------------
Xxxxx X. Xxxxxx, Xx.
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