Alliance Venture Management - Agreement

LIMITED LIABILITY COMPANY
OPERATING AGREEMENT


THIS LIMITED LIABILITY COMPANY OPERATING AGREEMENT ("Agreement"), is entered into as of October 15, 1999, by and among the persons listed on Exhibit A hereto, as members ("Members") of Alliance Venture Management, LLC, a California limited liability company ("Company" or "LLC").


WHEREAS, the LLC proposes to act as the general partner of Alliance Ventures I, L.P. and Alliance Ventures II, L.P. and as such to receive a carried interest in the profits of these limited partnerships; and


WHEREAS, the members desire to provide for series of units to be known as Common Units, Series A units and Series B units for the purpose of allocating the carried interest in Alliance Ventures I, L.P. and Alliance Ventures II, L.P.


THE PARTIES AGREE AS FOLLOWS:


1. FORMATION OF LIMITED LIABILITY COMPANY


1.1 FORMATION
The Members have formed the LLC under the laws of the State of California
pursuant to the Beverly-Killea Limited Liability Company Act ("Act") by
causing articles of organization ("Articles of Organization") for the
Company to be filed in the Office of the Secretary of State of California,
and by this Agreement intend to establish rules and regulations governing
its ownership and control.


1.2 NAME AND PRINCIPAL PLACE OF BUSINESS
Unless and until amended in accordance with this Agreement and the Act,
the name of the LLC will be "Alliance Venture Management, LLC" The
principal place of business of the LLC shall be Santa Clara, California,
or such other place or places as the Managers from time to time determine.


1.3 REGISTERED OFFICE AND AGENT FOR SERVICE OF PROCESS
The Company shall maintain a registered office and agent for service of
process as required by Section 17061 of the Act. The registered office
shall be 2575 Augustine Drive, Santa Clara, California, and the agent for
service of process shall be Bradley Perkins, or such other place and
person as the Managers may designate.


1.4 AGREEMENT
For and in consideration of the mutual covenants herein contained and for
other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Members executing this Agreement hereby
agree to the terms and conditions of this Agreement, as it may from time
to time be amended.


1.5 BUSINESS
The purpose of the LLC is to engage in any lawful act or activity for
which a limited liability company may be organized under the Act. The LLC
shall serve as the general partner of the Partnership, subject to the
terms and conditions of the agreement of limited partnership of the
Partnership.


1.6 DEFINITIONS
Terms not otherwise defined in this Agreement shall have the meanings set
forth in Section 15.


1.7 TERM
The term of the Company shall commence upon the later to occur of:


1.7.1the filing of Articles of Organization for the Company in the
office of the Secretary of State of California; or


1.7.2the execution of this Company Agreement by at least two Members and,


unless the term of the LLC is otherwise extended or sooner terminated
pursuant to the provisions of this Agreement, shall continue until ten
years after the commencement of such term.


Such term may be amended by amendment of this Agreement.


2. MEMBERSHIP; UNITS


2.1 MEMBERS
The Initial Members of the LLC shall be and include each of the persons
whose names are set forth on Exhibit A hereto as of the date of this
Agreement. Exhibit A shall be amended by the Managers as appropriate to
reflect the admission of additional Members or the acquisition by existing
Members of additional Units in the LLC.


2.2 REPRESENTATIONS AND WARRANTIES
Each Member hereby represents and warrants to the LLC and each of the
other Members as follows:


2.2.1PURCHASE ENTIRELY FOR OWN ACCOUNT
The Member is acquiring his interest in the LLC for the Member's own
account for investment purposes only and not with a view to or for
the resale, distribution, subdivision or fractionalization thereof
and has no contract, understanding, undertaking, agreement, or
arrangement of any kind with any Person to sell, transfer or pledge
to any Person his interest or any part thereof nor does such Member
have any plans to enter into any such agreement;


2.2.2INVESTMENT EXPERIENCE
By reason of his business or financial experience, the Member has the
capacity to protect his own interests in connection with the
transactions contemplated hereunder, is able to bear the risks of an
investment in the LLC, and at the present time could afford a
complete loss of such investment;


2.2.3DISCLOSURE OF INFORMATION
The Member is aware of the LLC's business affairs and financial
condition and has acquired sufficient information about the LLC to
reach an informed and knowledgeable decision to acquire an interest
in the LLC;


2.2.4FEDERAL AND STATE SECURITIES LAWS
The Member acknowledges that the interests in the LLC have not been
registered under the Securities Act of 1933 or any state securities
laws, inasmuch as they are being acquired in a transaction not
involving a public offering, and under such laws, may not be resold
or transferred by the Member without appropriate registration or the
availability of an exemption from such requirements. In this
connection, the Member represents that it or he is familiar with SEC
Rule 144, as presently in effect, and understands the resale
limitations imposed thereby and by the Securities Act of 1933.


2.3 LLC UNITS
Ownership of the LLC shall be divided into and represented by units of the
LLC ("Units"). The LLC shall be authorized to issue three classes of
units, Common Units, Series A Units and Series B Units. The total number
of Units the LLC is authorized to issue shall be 3,000,000, of which
1,000,000 shall be Common Units, 1,000,000 shall be Series A Units and
1,000,000 shall be Series B Units.


2.4 VOTING RIGHTS OF LLC UNITS
Each Common Unit shall be entitled to one vote per Unit, each Series A
Unit shall be entitled to 10 votes per Unit, and each Series B Unit shall
be entitled to 10 votes per Unit.


2.5 ADDITIONAL MEMBERS, ISSUANCE OF ADDITIONAL UNITS
Additional Persons may be issued Units and admitted to the LLC as Members
upon compliance with the provisions of this Agreement and upon such terms
and conditions as the Managers may determine, provided that:


2.5.1no new class of Units or interests having rights or preferences
senior to those of the existing Units may be issued without the
approval of Members holding a majority of each class of such
outstanding subordinate Units; and


2.5.2the Managers may not issue more than the total number of authorized
Units, without the approval of the Members.


Existing Members may be issued additional Units, upon compliance with the
provisions of this Agreement and upon such terms and conditions as the
Managers may determine, provided that no new class of Units or interests
having rights or preferences senior to those of the existing Units may be
issued without the approval of Members holding a majority of each class of
outstanding subordinate Units, nor may the Managers issue more than the
total number of authorized Units of the LLC without the approval of the
Members.


2.6 ADMISSION OF SUBSTITUTE MEMBERS
Notwithstanding any other provision of this Agreement, no Assignee of
Units of the LLC (including without limitation Permitted Transferees under
Section 12.4 and purchasers pursuant to Section 12.5.6) shall be admitted
as a Substitute Member and admitted to all the rights of the Member who
assigned the Units, without the approval of the Managers. If so admitted,
the Substitute Member shall have all the rights and powers and will be
subject to all the restrictions and liabilities of the Member who
originally assigned the Units. The admission of a Substitute Member shall
not release any Member who previously assigned the Units from liability to
the LLC that may have existed before such substitution. Consents required
hereunder may be given in advance of any transfer by any writing signed by
a Member.


2.7 RESIGNATION OR WITHDRAWAL OF A MEMBER
Except as specifically provided below, and subject to the provisions for
transfer contained in Section 12, no Member may resign, retire or withdraw
from membership in the LLC or withdraw his interest in the capital of the
LLC.


2.8 DISSOCIATION OF A MEMBER
The Bankruptcy, death or Dissolution of a Member will:


2.8.1cause such Member to be dissociated from the LLC (a "Dissociated
Member");


2.8.2terminate the continued membership of such Member in the LLC; and


2.8.3cause a dissolution and winding-up of the LLC pursuant to Section 14
hereof except as expressly provided therein.


Except as set forth above or expressly provided elsewhere in this
Agreement, the death, withdrawal, resignation, expulsion, Bankruptcy or
dissolution of a Member shall not cause a dissolution of the LLC.


2.9 RIGHTS OF DISSOCIATING
In the event any Member becomes a "Dissociated Member":


2.9.1if the dissociation causes a dissolution and winding up of the LLC
under Section 14, the Dissociated Member or its or his legal
representative shall be entitled to participate in the winding up of
the LLC to the same extent as any other Member; and


2.9.2if the dissociation does not cause a dissolution and winding up of
the LLC under Section 14, the Dissociated Member or his or its legal
representative shall be treated as an Assignee unless admitted to the
LLC as a Substitute Member pursuant to Section 2.7.


2.10 RIGHTS OF MEMBERS TO BIND LLC
Except as expressly provided herein no Member shall have the right to bind
the LLC.


3. CONTRIBUTIONS TO CAPITAL


3.1 INITIAL CONTRIBUTIONS
Each Member has contributed cash or property having an agreed-upon Initial
Carrying Value as set forth on Exhibit A hereto, which Exhibit A shall be
revised to reflect any additional contributions made in accordance with
Section 3.3.


3.2 ISSUANCE OF UNITS
In exchange for the Initial Contribution of the Members, the Members shall
be issued that number and class of Units set forth opposite their names on
Exhibit A.


3.3 ADDITIONAL CONTRIBUTIONS
Except as set forth in Section 2.5 above, no Member shall be permitted or
required to make any additional contribution to the capital of the LLC
without the consent of the Managers and the Members.


3.4 INTEREST
No Member shall be entitled to any interest with respect to its or his
contributions to or share of the capital of the LLC.


4. ACTION BY MEMBERS


4.1 MEETINGS OF MEMBERS
All meetings of the Members for the election of Managers shall be held in
the City of Santa Clara, State of California, at such place as may be
fixed from time to time by the Managers, or at such other place within the
State of California as shall be designated from time to time by the
Managers and stated in the notice of the meeting. Meetings of Members for
any other purpose may be held at such time and place, within or without
the State of California, as shall be stated in the notice of the meeting
or in a duly executed waiver of notice thereof. Members may participate in
a meeting of the members by means of conference telephone or similar
communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.


4.2 ANNUAL MEETINGS


4.2.1Annual meetings of Members, commencing with the year 1999, shall be
held on such date and at such time as shall be designated from time
to time by the Managers and stated in the notice of the meeting, at
which they shall elect a board of Managers, and transact such other
business as may properly be brought before the meeting.


4.2.2Written notice of the annual meeting stating the place, date and hour
of the meeting shall be given to each Member entitled to vote at such
meeting not less than 10 nor more than 60 days before the date of the
meeting.


4.3 SPECIAL MEETINGS


4.3.1Special meetings of the Members, for any purpose or purposes, may be
called by the Managers and shall be called at the request in writing
of any Member. Such request shall state the purpose or purposes of
the proposed meeting.


4.3.2A special meeting of the Members for the election of a new Board of
Managers may be called by any Member entitled to vote thereon, within
90 days after the date on which such Member has acquired Units of the
LLC.


4.3.3Written notice of a special meeting stating the place, date and hour
of the meeting and the purpose or purposes for which the meeting is
called, shall be given not less than 10 nor more than 60 days before
the date of the meeting, to each Member entitled to vote at such
meeting.


4.3.4Business transacted at any special meeting of Members shall be
limited to the purposes stated in the notice.


4.4 MEMBERSHIP LIST
The Person who has charge of the Unit Register of the LLC shall prepare
and make, at least ten days before every meeting of Members, a complete
list of the Members entitled to vote at the meeting, arranged in
alphabetical order, showing the address of each Member and the number of
Units registered in the name of each Member. The list may be examined by
any Member, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days before the meeting. The
list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any Member who is
present.


4.5 QUORUM


4.5.1The holders of a majority of the Units issued and outstanding and
entitled to vote thereat, present in person or represented by proxy,
shall constitute a quorum at all meetings of the Members for the
transaction of business except as otherwise provided by statute. If,
however, a quorum is not present or represented at any meeting of the
Members, the Members entitled to vote thereat, present in person or
represented by proxy, may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum
is present or represented. Upon resumption of an adjourned meeting,
any business may be transacted that might have been transacted before
the meeting was adjourned. If the adjournment is for more than 30
days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given
to each Member entitled to vote at the meeting.


4.5.2Except as otherwise provided herein, when a quorum is present at any
meeting, the vote of the Members holding a majority of the Units
present in person or by proxy shall decide any question brought
before the meeting, except that the Board of Managers shall be
elected as if the LLC were a California corporation and the Members
were shareholders voting for the election of a board of directors and
except to the extent that the express provision of the statutes, the
Articles of Organization, or this Agreement require a different vote.


4.6 VOTING RIGHTS
Each Member shall at every meeting of the Members be entitled to one vote
in person or by proxy for each Unit, but no proxy shall be voted after
three years from its date, unless the proxy expressly provides for a
longer period. Members entitled to vote shall vote as a single class.
Neither the assigning Member nor an Assignee of Units shall have any right
to a vote with respect to any assigned Units. No Member who has assigned
all of its or his Units (collectively, "Former Members") shall have any
right to vote on any matter. A Member who has assigned some, but not all,
of its or his Units shall be treated as a Member and entitled to a vote on
all matters to the extent of its or his retained Units. No Assignee of
Units shall have the right to consent, approve or vote on any matters
unless such Assignee has become a Substitute Member pursuant to Section
2.6.


4.7 ACTION WITHOUT MEETING
Any action required to be taken at any annual or special meeting of
Members, or any action which may be taken at any annual or special meeting
of Members, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by Members holding outstanding Units having not
less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all Units entitled to vote
thereon were present and voted. Accordingly, except to the extent
expressly provided otherwise in this Agreement, any action or item
requiring the approval of the Members, the consent of the Members, the
affirmative vote of the Members or the like, shall in the absence of an
annual or special meeting of the Members, require the approval, consent,
vote or the like of those Members that hold at least a majority in number
of the outstanding Units that are held by all Members at such time. Prompt
notice of the taking of any action without a meeting by less than
unanimous written consent shall be given to those Members who have not
consented in writing.


5. MANAGEMENT AND RESTRICTIONS


5.1 MANAGEMENT BY MANAGERS
Except for situations in which the approval of the Members is required by
statute or this Agreement, the LLC shall be managed and controlled by the
Managers acting as a Board of Managers. The Board of Managers may exercise
all powers of the LLC and do all such lawful acts and things as are not by
statute, the Articles of Organization or this Agreement, directed or
required to be exercised or done by the Members. It is intended that the
powers and authority of the Board of Managers shall be substantially the
same as the powers and authority of a board of directors of a corporation
formed under the laws of the State of California. Notwithstanding the
above, the Managers may not authorize any investment by the Partnerships
in any entity in which Alliance Venture Management has an equity interest,
and may not permit to be done any of the following without the approval of
the Members:


5.1.1Any act or thing that the Act or this Agreement requires to be
approved, consented to or authorized by the Members;


5.1.2Voluntarily cause the dissolution of the LLC;


5.1.3Compromise the liability of any Member for capital contributions or
for excessive distributions pursuant to Section 11.5; or


5.1.4Sell all or a significant part of the LLC assets, or engage in any
material recapitalization or merger.


5.2 NUMBER; VACANCIES
The Members shall determine, at each annual meeting and at any special
meeting called for the purpose of electing Managers, the number of
Managers. Initially there shall be three Managers. Except for the initial
Managers, the Managers shall be elected by the Members. Managers shall
hold office until the next meeting, whether annual or special at which
Managers are elected and such duly elected Managers are qualified.
Managers may but need not be Members. The Members hereby elect N. Damodar
Reddy, C.N. Reddy and V.R. Ranganath as the initial Managers. Vacancies
and newly created Managerships resulting from any increase in the
authorized number of Managers may be filled by a majority of the Managers
then in office, though less than a quorum, or by a sole remaining Manager,
and the Managers so chosen shall hold office until the next election of
Managers and until their successors are duly elected and qualified, unless
sooner displaced. If there are no Managers in office, then each Member
shall serve as a Manager until the next election of Managers hereunder.


5.3 MEETINGS OF MANAGERS
The Board of Managers of the LLC may hold meetings, both regular and
special, either within or without the State of California. Regular
meetings of the Board of Managers may be held without notice at times and
places determined by the Board. Special meetings shall be called by any
Manager. Members of the Board of Managers, or any committee designated by
the Board of Managers may participate in a meeting of the Board of
Managers or any committee, by means of conference telephone or similar
communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting. At all meetings of the Board
of Managers, a majority of the Managers shall constitute a quorum for the
transaction of business. Notwithstanding the presence at a meeting of a
quorum, all actions of the Board of Managers shall require the approval of
a majority of all Managers, except as may be otherwise specifically
provided by statute or this Agreement. If a quorum is not present at any
meeting of the Board of Managers, the Managers present thereat may adjourn
the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present.


5.4 ACTION WITHOUT MEETING
Any action required or permitted to be taken at any meeting of the Board
of Managers or of any committee thereof may be taken without a meeting, if
all members of the Board of Managers or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Managers or committee.


5.5 COMMITTEES
The Board of Managers may designate one or more committees, each committee
to consist of one or more of the Managers. The Board may designate one or
more Managers as alternate members of any committee, who may replace any
absent or disqualified Manager at any meeting of the committee. Upon
disqualification of a Manager of a committee, the Manager or Managers
thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another
Manager to act at the meeting in the place of any such absent or
disqualified Manager. Any such committee, to the extent provided in the
resolution of the Board of Managers, shall have and may exercise all the
powers and authority of the Board of Managers in the management of the
business and affairs of the LLC; but no such committee shall have the
power or authority to amend the Articles of Organization, adopt an
agreement of merger or consolidation, recommend to the Members the sale,
lease or exchange of all or substantially all of the LLC's property and
assets, recommend to the Members dissolution of the LLC or revocation of a
dissolution, take any action requiring a vote of 2/3 of the Managers or
amend this Agreement; and, unless the resolution expressly so provides, no
such committee shall have the power or authority to declare a distribution
or to authorize the issuance of Units. Such committee or committees shall
have such name or names as may be determined from time to time by the
Board of Managers. Each committee shall keep regular minutes of its
meetings and report the same to the Board of Managers when required.


5.6 REMOVAL OF MANAGERS
Any Manager or the entire Board of Managers may be removed, with or
without cause, by the holders of a majority of Units entitled to vote at
an election of Managers.


5.7 COMPENSATION OF MANAGERS
The Managers may be paid their expenses, if any, of attendance at each
meeting of the Board of Managers and may be paid a fixed sum for
attendance at each meeting of the Board of Managers or a stated salary as
Manager. No such payment shall preclude any Manager from serving the LLC
in any other capacity and receiving compensation therefor. Members of
special or standing committees may be allowed like compensation for
attending committee meetings.


5.8 AMENDMENT OF ARTICLES OF ORGANIZATION OR AGREEMENT
The Managers shall have the duty and authority to amend the Articles of
Organization or this Agreement as and to the extent necessary to reflect
any and all changes or corrections necessary or appropriate as a result of
any action taken by the Members or Managers in accordance with the terms
of this Agreement.


6. NOTICES
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