{"id":41646,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/limited-liability-company-e-trade-venture-i-llc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"limited-liability-company-e-trade-venture-i-llc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/formation\/limited-liability-company-e-trade-venture-i-llc.html","title":{"rendered":"Limited Liability Company &#8211; E*Trade Venture I LLC"},"content":{"rendered":"<pre>                                                                  Execution Copy\n\n\n\n\n\n                            E*Trade Ventures I, LLC\n                     A Delaware Limited Liability Company\n\n\n\n\n                           LIMITED LIABILITY COMPANY\n                              OPERATING AGREEMENT\n\n\n\n                              September 23, 1999\n\n \n                               TABLE OF CONTENTS\n\n \n \n                                                                                                                   Page\n                                                                                                                   ----\n                                                                                                                  \nARTICLE I NAME, PURPOSE AND PRINCIPAL OFFICE OF COMPANY..........................................................    1\n                                                                                                                      \n         1.1.     Name...........................................................................................    1\n         1.2.     Agreement......................................................................................    1\n         1.3.     Purpose; Powers................................................................................    1\n         1.4.     Registered Office and Agent....................................................................    2\n         1.5.     Principal Office...............................................................................    2\n         1.6.     Definitions....................................................................................    2\n                                                                                                                      \nARTICLE II TERM AND TERMINATION OF THE COMPANY...................................................................    4\n                                                                                                                      \n         2.1.     Term...........................................................................................    4\n         2.2.     Termination....................................................................................    4\n         2.3.     Extension of Term..............................................................................    4\n                                                                                                                      \nARTICLE III INITIAL MEMBERS; CHANGES IN MEMBERSHIP...............................................................    4\n                                                                                                                      \n         3.1.     Name and Address...............................................................................    4\n         3.2.     Admission of Additional Members................................................................    5\n         3.3.     Death, Disability or Withdrawal of a Managing Member...........................................    5\n         3.4.     Withdrawal of a Member.........................................................................    5\n                                                                                                                      \nARTICLE IV MANAGEMENT, DUTIES AND RESTRICTIONS...................................................................    6\n                                                                                                                      \n         4.1.     Management.....................................................................................    6\n         4.2.     Conversion of Status as Managing Member........................................................    7\n         4.3.     Liability of Members to the Company and the Other Members......................................    7\n         4.4.     Restrictions on the Members....................................................................    7\n         4.5.     Additional Restrictions on Non-Managing Members................................................    7\n         4.6.     Officers.......................................................................................    8\n                                                                                                                      \nARTICLE V CAPITAL CONTRIBUTIONS..................................................................................    8\n                                                                                                                      \n         5.1.     Capital Commitments and Membership Interests of the Members....................................    8\n         5.2.     Liability of the Members.......................................................................    8\n         5.3.     Liability of Transferees.......................................................................    9\n         5.4.     Defaulting Members.............................................................................    9 \n\nARTICLE VI CAPITAL ACCOUNTS AND ALLOCATIONS......................................................................   10\n\n         6.1.     Capital Accounts...............................................................................   10\n         6.2.     Definitions....................................................................................   10\n         6.3.     Allocation of Net Income or Loss...............................................................   12\n \n\n                                      i.\n\n \n \n                                                                                                                 \nARTICLE VII EXPENSES............................................................................................   13\n\nARTICLE VIII DISTRIBUTIONS......................................................................................   13\n\n         8.1.     Interest......................................................................................   13\n         8.2.     Mandatory Distributions.......................................................................   13\n         8.3.     Discretionary Distributions...................................................................   13\n\nARTICLE IX ASSIGNMENT OR TRANSFER OF MEMBERS' INTERESTS.........................................................   14\n                                                                                                                     \n         9.1.     Restrictions on Transfer of Members' Interests................................................   14\n         9.2.     Opinion of Counsel............................................................................   14\n         9.3.     Violation of Restrictions.....................................................................   15\n         9.4.     Agreement Not to Transfer.....................................................................   15\n         9.5.     Multiple Ownership............................................................................   15\n         9.6.     Substitute Members............................................................................   15\n                                                                                                                     \nARTICLE X VESTING OF PERCENTAGE INTERESTS.......................................................................   15\n                                                                                                                     \n         10.1.    Vesting of Managing Members' and E*Trade's Interests..........................................   15\n         10.2.    Vesting of Other Non-Managing Members' and Additional Members' Interests......................   16\n                                                                                                                     \nARTICLE XI DISSOLUTION AND LIQUIDATION OF THE COMPANY...........................................................   16\n                                                                                                                     \n         11.1.    Liquidation Procedures........................................................................   16\n                                                                                                                     \nARTICLE XII FINANCIAL ACCOUNTING AND REPORTS....................................................................   16\n                                                                                                                     \n         12.1.    Tax Accounting and Reports....................................................................   16\n         12.2.    Valuation of Securities and Other Assets Owned by the Company.................................   17\n         12.3.    Supervision; Inspection of Books..............................................................   18\n         12.4.    Confidentiality...............................................................................   18\n                                                                                                                     \nARTICLE XIII OTHER PROVISIONS...................................................................................   18\n                                                                                                                     \n         13.1.    Execution and Filing of Documents.............................................................   18\n         13.2.    Other Instruments and Acts....................................................................   18\n         13.3.    Binding Agreement.............................................................................   18\n         13.4.    Governing Law.................................................................................   18\n         13.5.    Notices.......................................................................................   18\n         13.6.    Power of Attorney.............................................................................   18\n         13.7.    Amendment Procedure...........................................................................   19\n         13.8.    Effective Date................................................................................   19\n         13.9.    Entire Agreement..............................................................................   19\n         13.10.   Titles; Subtitles.............................................................................   19\n         13.11.   Company Name..................................................................................   19\n         13.12.   Exculpation...................................................................................   19\n         13.13.   Indemnification...............................................................................   19\n         13.14.   Limitation of Liability of Members............................................................   20\n \n\n                                      ii.\n\n \n \n                                                                                                                 \n         13.15.   Arbitration...................................................................................   20\n         13.16.   Tax Matters Partner...........................................................................   20\n         13.17.   Taxation as Company...........................................................................   21\n                                                                                                                     \nARTICLE XIV MISCELLANEOUS TAX COMPLIANCE PROVISIONS.............................................................   21\n                                                                                                                     \n         14.1.    Substantial Economic Effect...................................................................   21\n         14.2.    Income Tax Allocations........................................................................   22\n         14.3.    Withholding...................................................................................   22 \n \n\nEXHIBIT A         Members' Capital Commitments and Percentage Interests\n\n                                     iii.\n\n \n                            E*Trade Ventures I, LLC\n                     a Delaware Limited Liability Company\n\n\n\n                              OPERATING AGREEMENT\n\n          This Operating Agreement is entered into as of the 23rd day of\nSeptember, 1999, by and among (i) Christos M. Cotsakos and Thomas A. Bevilacqua,\nas managing members (the 'Managing Members'), and (ii) E*Trade Group, Inc.\n('E*Trade') and each of the other persons whose names are set forth under the\nheading 'Non-Managing Members' on Exhibit A attached hereto, as non-Managing\nMembers (such persons and any additional non-Managing Member admitted after the\ndate of this Agreement being referred to herein as the 'Non-Managing Members').\nThe Managing Members and the Non-Managing Members are referred to herein\ncollectively as the 'Members.'\n\n          The Members have formed the Company by causing a Certificate of\nFormation (the 'Certificate') conforming to the requirements of the Delaware\nRevised Limited Liability Company Act (the 'Act') to be filed in the Office of\nthe Secretary of State for the State of Delaware.\n\n\n                                   ARTICLE I\n                               NAME, PURPOSE AND\n                          PRINCIPAL OFFICE OF COMPANY\n\n          1.1. Name. The name of the Company is 'E*Trade Ventures I, LLC.' The\naffairs of the Company shall be conducted under such name or such other name as\nthe Managing Members may, in their discretion, determine. E*Trade hereby grants\nthe Company the right, at no cost, to use the 'E*Trade' name for the term of the\nCompany as set forth in Article II hereof.\n\n          1.2. Agreement. In consideration of the mutual covenants herein\ncontained and for other good and valuable consideration, the receipt and\nsufficiency of which are hereby acknowledged, the Members executing this\nAgreement hereby agree to the terms and conditions of this Agreement, as it may\nbe amended from time to time. It is the express intention of the Members that\nthis Agreement shall be the sole statement of agreement among them, and, except\nto the extent a provision of this Agreement expressly incorporates matters by\nexpress reference, this Agreement shall govern even when inconsistent with or\ndifferent from the provisions of the Act or any other provision of law.\n     \n          1.3. Purpose; Powers.\n\n               (a)  Purpose.  The primary purpose of the Company is to act as\n                    -------\nthe general partner of E*Trade eCommerce Fund, L.P. (the 'Fund').\n\n \n               (b)  Powers. Subject to all of the terms and provisions hereof,\n                    ------\nthe Company shall have all powers necessary, suitable or convenient for the\naccomplishment of the purpose of the Company, including, without limitation, the\nfollowing:\n\n                    (1)  to purchase, sell, invest and trade in securities of\n     every kind, including, without limitation, capital stock, limited\n     partnership interests, bonds, notes, debentures, securities convertible\n     into other securities, trust receipts and other obligations, instruments or\n     evidences of indebtedness, as well as in rights, warrants and options to\n     purchase securities;\n\n                    (2)  to make and perform all contracts and engage in all\n     activities and transactions necessary or advisable to carry out the\n     purposes of the Company, including, without limitation, the purchase, sale,\n     transfer, pledge and exercise of all rights, privileges and incidents of\n     ownership or possession with respect to any Company asset or liability; the\n     borrowing or lending of money and the securing of payment of any Company\n     obligation by hypothecation or pledge of, or grant of a security interest\n     in, Company assets; and the guarantee of or becoming surety for the debts\n     of others; and\n\n                    (3)  otherwise to have all the powers available to it as a\n     limited liability company under the Act.\n\n          1.4. Registered Office and Agent. The initial address of the Company's\nregistered office in Delaware is 15 East North Street, Dover, Wilmington, County\nof Kent, and its initial agent at such address for service of process is\nIncorporating Services Limited. The Managing Members may change the registered\noffice and agent for service of process as they from time to time may determine.\n\n          1.5. Principal Office.  The principal office of the Company shall\ninitially be located at 4500 Bohannon Street, Menlo Park, California 94025. The\nManaging Members may change the location of the principal office of the Company\nat any time.\n\n          1.6. Definitions.\n\n               (a)  Additional Members.  This term shall have the meaning\n                    ------------------\nascribed to it in Paragraph 3.2.\n\n               (b)  Affiliate.  With reference to any person, any other person\n                    ---------\ncontrolling, controlled by or under direct or indirect common control with such\nperson.\n\n               (c)  Agreement.  This Operating Agreement of E*Trade Ventures I,\n                    ---------\nLLC, a Delaware limited liability company.\n\n               (d)  Assignee.  This term shall have the meaning ascribed to it\n                    --------\nin Paragraph 5.4.\n\n               (e)  Bankruptcy.  A person or entity shall be deemed bankrupt if:\n                    ----------\n\n                                      2.\n\n \n                    (1)  any proceeding is commenced against such person or\n     entity as 'debtor' for any relief under bankruptcy or insolvency laws, or\n     laws relating to the relief of debtors, reorganizations, arrangements,\n     compositions or extensions and such proceeding is not dismissed within\n     ninety (90) days after such proceeding has commenced, or\n\n                    (2)  such person or entity commences any proceeding for\n     relief under bankruptcy or insolvency laws or laws relating to the relief\n     of debtors, reorganizations, arrangements, compositions or extensions.\n\n               (f)  Book Value.  This term shall have the meaning ascribed to it\n                    ----------\nin Paragraph 6.2(a).\n\n               (g)  Capital Account.  This term shall have the meaning ascribed\n                    ---------------\nto it in Paragraph 6.2(b).\n\n               (h)  Capital Commitment.  This term shall have the meaning\n                    ------------------\nascribed to it in Paragraph 5.1.\n\n               (i)  Capital Contribution.  This term shall have the meaning\n                    --------------------\nascribed to it in Paragraph 5.1(b).\n\n               (j)  Carry.  The Company's 20% carried interest in the income of\n                    -----\nthe Fund.\n\n               (k)  Certificate.  The Certificate of Formation of E*Trade\n                    -----------\nVentures I, LLC, a Delaware limited liability company.\n\n               (l)  Code.  The Internal Revenue Code of 1986, as amended from\n                    ----\ntime to time (and any corresponding provisions of succeeding law).\n\n               (m)  Defaulting Member.  This term shall have the meaning\n                    -----------------\nascribed to it in Paragraph 5.4(a).\n\n               (n)  Fiscal Quarter.  This term shall have the meaning ascribed\n                    --------------\nto it in Paragraph 6.2(c).\n\n               (o)  Fiscal Year.  This term shall have the meaning ascribed to\n                    -----------\nit in Paragraph 6.2(d).\n\n               (p)  Management Fee.  The management fee receivable by the\n                    --------------\nCompany from the Fund.\n\n               (q)  Net Income or Net Loss.  This term shall have the meaning\n                    ----------------------\nascribed to it in Paragraph 6.2(e).\n\n               (r)  Percentage Interest.  This term shall have the meaning\n                    -------------------\nascribed to it in Paragraph 6.2(f).\n\n                                      3.\n\n \n               (s)  Sale or Exchange.  This term shall have the meaning ascribed\n                    ----------------\nto it in Paragraph 6.2(g).\n\n               (t)  Securities Act.  The Securities Act of 1933, as amended from\n                    --------------\ntime to time.\n\n               (u)  Securities. Securities of every kind and nature and rights\n                    ----------\nand options with respect thereto, including stock, notes, bonds, debentures,\nevidences of indebtedness and other business interests of every type, including\ninterests in partnerships, joint ventures, proprietorships and other business\nentities.\n\n               (v)  TMP.  This term shall have the meaning ascribed to it in\n                    ---\nParagraph 13.16.\n               \n               (w)  Termination Date.  This term shall have the meaning ascribed\n                    ----------------\nto it in Paragraph 2.1.\n\n               (x)  Treasury Regulations.  The Income Regulations promulgated\n                    --------------------\nunder the Code, as such Regulations may be amended from time to time (including\ncorresponding provisions of succeeding Regulations).\n\n\n                                  ARTICLE II\n                      TERM AND TERMINATION OF THE COMPANY\n\n          2.1. Term. The term of the Company shall continue until one (1) year\nafter the dissolution of the Fund unless sooner terminated as provided in\nParagraph 2.2 or by operation of law or extended as provided in Paragraph 2.3.\nThe last day of the term of the Company, as such may be extended as provided\nherein, is referred to herein as the 'Termination Date.'\n\n          2.2. Termination. The Company shall terminate prior to the end of the\nperiod specified in Paragraph 2.1 at the election of the Managing Members. The\nManaging Members shall deliver notice of such termination to the Non-Managing\nMembers.\n\n          2.3. Extension of Term.  The term of the Company may be extended by\nthe Managing Members. The Managing Members shall provide notice of any such\nextension to the Non-Managing Members.\n\n\n                                  ARTICLE III\n                    INITIAL MEMBERS; CHANGES IN MEMBERSHIP\n\n          3.1. Name and Address. The persons listed on Exhibit A are hereby\nadmitted as Members of the Company. Exhibit A shall be amended from time to time\nto reflect changes in the membership of the Company (including the admission of\nAdditional Members). Any such amended Exhibit A shall supersede all prior\nExhibit A's and become part of this Agreement and shall be kept on file at the\nprincipal office of the Company.\n\n                                      4.\n\n \n          3.2. Admission of Additional Members. Persons may be admitted to the\nCompany as additional members ('Additional Members') on such terms and\nconditions as shall be determined by the Managing Members, in their sole\ndiscretion. Each Additional Member shall be admitted only if he shall have\nexecuted this Agreement or an appropriate amendment to it in which he agrees to\nbe bound by the terms and provisions of this Agreement as they may be modified\nby that amendment. Admission of a new Member shall not cause the dissolution of\nthe Company.\n\n          3.3. Death, Disability or Withdrawal of a Managing Member.\n\n               (a)  In the case of a Managing Member's death, permanent physical\nor mental disability or withdrawal from the Company, the Company shall not\ndissolve or terminate, but its business shall be continued without interruption\nor without any break in continuity by the remaining Members, with the remaining\nManaging Member continuing to serve as the sole Managing Member unless he\nappoints an additional Managing Member, in his sole discretion. Any deceased,\ndisabled or withdrawn Managing Member (or the holder of his interest) shall\nbecome a Non-Managing Member, and the interest of such Managing Member shall\nbecome a Non-Managing Member's interest. Such former Managing Member or the\nholder of such interest shall have no right to participate in the management of\nthe Company and no right to consent to or vote upon any matter, except as\nprovided in Paragraph 13.7.\n\n               (b)  If such change in the former Managing Member's status shall\nresult in multiple ownership of any Non-Managing Member's interest, one or more\ntrustees or nominees may be required to be designated to represent a portion of\nor the entire Non-Managing Member's interest for the purpose of receiving all\nnotices which may be given and all payments which may be made under this\nAgreement, and for the purpose of exercising all rights which such Non-Managing\nMember has pursuant to the provisions of this Agreement.\n\n          3.4. Withdrawal of a Member.\n\n               (a)  Except with the consent of the Managing Members, the\ninterest of a Member may not be withdrawn from the Company in whole or in part\nexcept in the event of the death or declaration of legal incompetency of such\nMember and in such event only if the election to withdraw is given by the\npersonal representative or representatives of such Member in writing to the\nManaging Members within three (3) months after the date of the appointment of\nsuch personal representative or representatives, or within six (6) months from\nthe date of death or declaration of legal incapacity of such Member, whichever\nis earlier. In the event of such election to withdraw, the interest of such\nMember shall be withdrawn in its entirety and shall be valued as of the date of\nwithdrawal pursuant to the provisions of Paragraph 12.2 and paid for in the\nmanner hereinafter provided by this paragraph. The Managing Members shall be\nentitled, in their sole discretion, to make the distribution in respect of the\ninterest of the withdrawing Member in cash, in kind or pursuant to a promissory\nnote due upon termination of the Company, or in any combination thereof. If any\ndistribution is to be made in kind and if such distribution cannot be made in\nfull because of restrictions on the transfer of Securities or for any other\nreason, distribution may be delayed until an effective transfer and distribution\nmay be made, and Securities that will be transferred in respect of the\nwithdrawing Member's interest shall be designated. Such designated Securities\nwill nevertheless be subject to the full right and power of the\n\n                                      5.\n\n \nManaging Members to deal with them in the best interests of the Company,\nincluding the right to substitute other Securities of equivalent value.\n\n               (b)  In the event of the withdrawal of any Member pursuant\nhereto, the Percentage Interests and Capital Accounts of the withdrawing Member\nand the remaining Members shall be appropriately adjusted, including any\nadjustments required as a result of any vesting provisions applicable to the\nwithdrawing Member's interest.\n\n               (c)  The withdrawal of a Member shall not be cause for\ndissolution of the Company.\n\n                                  ARTICLE IV\n                      MANAGEMENT, DUTIES AND RESTRICTIONS\n\n          4.1. Management. The Managing Members shall have the sole and\nexclusive control of the management and conduct of the affairs of the Company.\nAny action shall, unless otherwise specified by the Managing Members, require\napproval of both Managing Members (or the sole remaining Managing Member). The\nright, power and authority of the Managing Members to carry on the affairs of\nthe Company and to do any and all acts on behalf of the Company shall, subject\nto any specific limitations set forth in this Agreement and the Limited\nPartnership Agreement of the Fund, include without limitation the following:\n\n               (a)  To cause the Company to perform the duties and exercise the\nrights of the general partner of the Fund.\n\n               (b)  To purchase, hold, sell or otherwise effect transactions in\nSecurities (whether marketable or unmarketable) and other investments of the\nCompany.\n\n               (c)  To incur indebtedness on behalf of the Company and the Fund.\n\n               (d)  To guarantee indebtedness on behalf of the Company and the\nFund.\n\n               (e)  To loan money to any of the Members upon such terms and\nconditions as the Managing Members may prescribe.\n\n               (f)  To deposit or hold Securities and other assets of the\nCompany in the Company's name or in such street or nominee names as may be\ndetermined from time to time by the Managing Members, at such securities firms,\nbanks or depositories as shall be designated by the Managing Members. All\nwithdrawals therefrom or directions with respect thereto shall be made on the\nsignature of either Managing Member.\n\n               (g)  To provide management services or to designate an entity or\nentities to manage the Fund and to receive fees from the Fund and to enter into\nan agreement or agreements with such an entity or entities upon such terms and\nconditions as the Managing Members shall deem appropriate for the management of\nthe Fund. Such an agreement or agree-\n\n                                      6.\n\n \nments may be entered into with firms or business entities controlled by or\ncomprised of either or both Managing Members or an Affiliate of either or both\nManaging Members.\n\n               (h)  Generally, to perform all acts deemed by the Managing\nMembers appropriate or incidental to the foregoing and to carry out the purposes\nand business of the Company and the Fund.\n\n          4.2. Conversion of Status as Managing Member. Any Managing Member who\nhas become a Non-Managing Member shall not participate in the control,\nmanagement and direction of the business of the Company or the Fund.\n\n          4.3. Liability of Members to the Company and the Other Members. No\nMember shall be liable to any other Member for honest mistakes in judgment or\nfor action or inaction taken in good faith for a purpose that was reasonably\nbelieved to be in the best interests of the Company, or for losses due to such\nmistakes, action or inaction, or for the negligence, dishonesty or bad faith of\nany employee, broker or other agent of the Company; provided that such employee,\nbroker or agent was selected, engaged or retained with reasonable care. Each\nManaging Member and, with the consent of the Managing Members, a Non-Managing\nMember, may consult with counsel and accountants on matters relating to Company\naffairs and shall be fully protected and justified in acting in accordance with\nthe advice of counsel or accountants, provided that such counsel or accountants\nshall have been selected with reasonable care. Notwithstanding any of the\nforegoing to the contrary, the provisions of this Paragraph 4.3 shall not be\nconstrued so as to relieve (or attempt to relieve) any person of any liability\nincurred (i) as a result of recklessness or intentional wrongdoing, or (ii) to\nthe extent (but only to the extent) that such liability may not be waived,\nmodified or limited under applicable law, provided that this Paragraph 4.3 shall\nbe construed so as to effectuate the provisions hereof to the fullest extent\npermitted by law.\n\n          4.4. Restrictions on the Members.\n\n               (a)  Except with the consent of the Managing Members or as\notherwise specifically permitted by this Agreement, no Member shall mortgage,\nencumber, pledge or otherwise dispose of his or her interest in the Company or\nin the Company's assets or property or enter into any agreement as a result of\nwhich any other person shall have rights as a Member of the Company.\n\n               (b)  No Member may buy from or sell to the Company any Securities\nwithout the prior written consent of the Managing Members except purchases or\nsales explicitly permitted by this Agreement.\n\n               (c)  No Member shall do any act in contravention of this\nAgreement or the Fund's Limited Partnership Agreement.\n\n          4.5. Additional Restrictions on Non-Managing Members.\n\n               (a)  The Non-Managing Members shall take no part in the control\nor management of the affairs of the Company nor shall Non-Managing Members have\nany power or\n\n                                      7.\n\n \nauthority to act for or on behalf of the Company as a result of this Agreement\nexcept as expressly authorized from time to time by the Managing Members.\n\n               (b)  Except as otherwise required by law or as expressly provided\nherein, the Non-Managing Members shall have no rights to vote, call meetings of\nthe Members or otherwise exercise any similar rights or powers.\n\n          4.6. Officers. The Managing Members may appoint such officers of the\nCompany as they shall deem advisable and shall have the discretion to remove any\nofficers at any time.\n\n                                   ARTICLE V\n                             CAPITAL CONTRIBUTIONS\n\n          5.1. Capital Commitments and Membership Interests of the Members. Set\nforth opposite the name of each Member listed on Exhibit A attached hereto is\nsuch Member's 'Capital Commitment' to the Company and its resulting percentage\nmembership interest in the Company ('Percentage Interest'). Each Member's\nCapital Commitment represents the aggregate amount of capital that such Member\nhas agreed to contribute to the Company in accordance with the terms hereof in\norder to fund the Company's capital commitment to the Fund.\n\n               (a)  In the event that the capital commitment of the Company to\nthe Fund is increased, the Capital Commitments of the Members shall be increased\nin an amount, in the aggregate, equal to such increased obligation to the Fund.\nSuch aggregate increased commitment shall be shared between the Members in\nproportion to their Capital Commitments.\n\n               (b)  The Managing Members shall provide at least twelve (12)\nbusiness days' prior written notice of any required contribution to the capital\nof the Company, specifying the amount thereof. The Members shall make their\ncontributions to the Company's capital in cash, except as otherwise determined\nby the Managing Members. No Member shall be required to contribute any amount in\nexcess of such Member's Capital Commitment (as such Capital Commitment may be\nincreased pursuant to subparagraph (a)) without such Member's written consent.\nAny capital contributions hereunder with respect to the Capital Commitments of\nthe Members (each a 'Capital Contribution') shall be made in such amount as\nshall be specified by the Managing Members and any such contributions required\nhereunder shall be in proportion to the Members' respective Capital Commitments.\n\n               (c)  In addition to the Capital Commitments set forth on Exhibit\nA, E*Trade shall make Capital Contributions (up to a maximum of $250,000) to\nfund any excess of the Company's operating expenses in excess of the Management\nFee. E*Trade's Percentage Interest shall not be increased as a result of such\nCapital Contributions.\n\n          5.2. Liability of the Members.\n\n               (a)  Except as expressly set forth herein, or as otherwise\nrequired by law, no Member shall be liable for any debts or obligations of the\nCompany.\n\n                                      8.\n\n \n               (b)  Each Member acknowledges the obligation of the Company\npursuant to the Limited Partnership Agreement of the Fund to contribute to the\ncapital of the Fund cash or Securities to satisfy the Company's 'clawback'\nobligation to the Fund. Each Member agrees that, in the event the Company is\nrequired to make a 'clawback' payment pursuant to the Limited Partnership\nAgreement of the Fund, he or she will return any or all distributions made to\nhim or her pursuant to this Agreement attributable to the Company's carried\ninterest in the Fund as may be required to satisfy such obligation, with each\nMember being severally (but not jointly) liable, in proportion to their\nrespective shares in such distributions.\n\n          5.3. Liability of Transferees. For purposes of this Agreement, any\ntransferee of an interest in the Company, whether or not admitted as a\nsubstitute Member or treated as a transferee or successor in interest who has\nnot been admitted as a substitute Member (an 'Assignee') hereunder, shall be\ntreated as having contributed the amounts contributed to the Company by the\ntransferor, as having received distributions made to the transferor, and as\nhaving been allocated any Net Income or Net Loss allocated to the transferor of\nthe interest in the Company held by the transferee. In addition, the transferee\nshall be liable for the transferor's liability for future contributions to the\nCompany. Notwithstanding the above, the transfer of an interest shall not\nrelieve the transferor from any liability hereunder except to the extent that\nthe transferee has actually made all contributions or payments required of the\ntransferor.\n\n          5.4. Defaulting Members.\n\n               (a)  If a Non-Managing Member fails to pay any amount which it is\nrequired to pay to the Company on or before the date when such amount is due and\npayable, such Non-Managing Member shall be deemed to be in default hereunder (a\n'Defaulting Member'), and written notice of default shall be given to such Non-\nManaging Member by the Managing Members. The Company shall be entitled to\nenforce the obligations of each Non-Managing Member to make the contributions to\ncapital specified in this Agreement, and the Company shall have all remedies\navailable at law or in equity in the event any such contribution is not so made.\nIn the event of any legal proceedings relating to a default by a Defaulting\nMember, such Defaulting Member shall pay all costs and expenses incurred by the\nCompany, including attorneys' fees, if the Company shall prevail. Further, such\nDefaulting Member shall be obligated to pay the Company interest with respect to\nthe amount of any capital contribution not made when required by this Agreement,\nwith such interest commencing on the date such contribution is initially due and\nending on the date such contribution is made to the Company. Such interest shall\nbe calculated on the basis of the then current reference rate announced by Wells\nFargo Bank, N.A., or by any other U.S. commercial bank with capital in excess of\nFive Hundred Million Dollars ($500,000,000) selected by the Managing Members,\nplus two percent (2%) per annum.\n\n               (b)  In addition to the remedies provided under Paragraph 5.4(a),\nif the Defaulting Member does not remedy a default in the payment of a required\ncontribution within ten (10) business days of the receipt of the notice\nspecified in Paragraph 5.4(a): (i) the Defaulting Member shall no longer have\nthe right (if any) to vote on any Company matter, and (ii) if the Managing\nMembers so elect, the other Members shall have the option to pay the remaining\ncapital contributions of the Defaulting Member in accordance with any procedures\nand in such proportions as may be established by the Managing Members. In such\nevent, such\n\n                                      9.\n\n \nDefaulting Member shall be deemed to have withdrawn from the Company and to have\nforfeited its interest in the Net Income and Net Losses of the Company. Such\nDefaulting Member shall be entitled to receive only the amount of its Capital\nAccount at the time of the default, with such amount payable, without interest,\nto the Defaulting Member upon the dissolution of the Company.\n\n                                  ARTICLE VI\n                       CAPITAL ACCOUNTS AND ALLOCATIONS\n\n          6.1. Capital Accounts. A Capital Account shall be maintained on the\nCompany's books for each Member. In the event any interest in the Company is\ntransferred in accordance with the terms of this Agreement, the transferee shall\nsucceed to the Capital Account of the transferor to the extent it relates to the\ntransferred interest.\n\n          6.2. Definitions. Unless the context requires otherwise, the following\nterms have the meanings specified below for purposes of this Agreement:\n\n               (a)  Book Value.  The Book Value with respect to any asset shall\n                    ----------\nbe the asset's adjusted basis for federal income tax purposes, except as\nfollows:\n\n                    (1)  The initial Book Value of any asset contributed by a\n     Member to the Company shall be the fair market value of such asset at the\n     time of contribution, as determined by the contributing Member and the\n     Company.\n\n                    (2)  In the discretion of the Managing Members, the Book\n     Values of all Company assets may be adjusted to equal their respective fair\n     market values, as determined by the Managing Members, and the amount of\n     such adjustment shall be treated as Net Income or Net Loss and allocated to\n     the Capital Accounts of the Members, as of the following times: (A) the\n     acquisition of an additional interest in the Company by any new or existing\n     Member in exchange for more than a de minimis capital contribution; and (B)\n     the distribution by the Company to a Member of more than a de minimis\n     amount of Company assets in connection with an adjustment of such Member's\n     interest in the Company.\n\n                    (3)  The Book Values of all Company assets shall be adjusted\n     to equal their respective fair market values, as determined by the Managing\n     Members, and the amount of such adjustment shall be treated as Net Income\n     or Net Loss and allocated to the Capital Accounts of the Members, as of the\n     following times: (A) the date the Company is liquidated within the meaning\n     of Treasury Regulation Section 1.704-1(b)(2)(ii)(g); and (B) the\n     termination of the Company pursuant to the provisions of this Agreement.\n\n                    (4)  The Book Values of the Company's assets shall be\n     increased or decreased to the extent required under Treasury Regulation\n     Section 1.704-1(b)(2)(iv)(m) in the event that the adjusted tax basis of\n     the Company's assets is adjusted pursuant to Code Section 732, 734 or 743.\n\n                                      10.\n\n \n                    (5)  The Book Value of a Company asset shall be adjusted by\n     the depreciation, amortization or other cost recovery deductions, if any,\n     taken into account by the Company with respect to such asset in computing\n     Net Income or Net Loss.\n\n               (b)  Capital Account. An account maintained by the Company with\n                    ---------------\nrespect to each Member in accordance with the following provisions:\n\n          The Capital Account of each Member shall be increased by:\n                                                      ---------\n\n     (1)  the amount of money and the fair market value of any property\n          contributed to the Company by such Member (in the case of a\n          contribution of property, net of any liabilities secured by such\n          property that the Company is considered to assume or hold subject to\n          for purposes of Section 752 of the Code),\n\n     (2)  such Member's share of Net Income (or items thereof) allocated to his\n          Capital Account pursuant to this Agreement, and\n\n     (3)  any other amounts required by Treasury Regulation Section 1.704-1(b),\n          provided the Managing Member determines that such increase is\n          consistent with the economic arrangement among the Members as\n          expressed in this Agreement.\n\nand shall be decreased by:\n             ---------\n\n     (A)  the amount of money and the fair market value of any property\n          distributed by the Company (determined pursuant to Paragraph 12.2\n          hereof as of the date of distribution) to such Member pursuant to the\n          provisions of this Agreement (net of any liabilities secured by such\n          property that such Member is considered to assume or hold subject to\n          for purposes of Section 752 of the Code),\n\n     (B)  such Member's share of or Net Loss (or items thereof) allocated to his\n          Capital Account pursuant to this Agreement, and\n\n     (C)  any other amounts required by Treasury Regulation Section 1.704-1(b),\n          provided the Managing Member determines that such decrease is\n          consistent with the economic arrangement among the Members as\n          expressed in this Agreement.\n\n               (c)  Fiscal Quarter. The Fiscal Quarters of the Company shall\n                    --------------\nbegin on January l, April 1, July 1 and October 1, and end on March 31, June 30,\nSeptember 30 and December 31, respectively, except that the Company's first\nFiscal Quarter shall begin on the date of this Agreement and end on the next\nregular quarterend.\n\n               (d)  Fiscal Year. The Company's first Fiscal Year shall begin on\n                    -----------\nthe date of this Agreement and end on December 31, 1999. Thereafter, the\nCompany's Fiscal Year shall commence on January 1 of each year and end on\nDecember 31 of such year or, if earlier, the date the Company terminated during\nsuch year. The Managing Members may at any time elect a different Fiscal Year if\npermitted by the Code and the applicable Treasury Regulations.\n\n                                      11.\n\n \n               (e)  Net Income and Net Loss. The net book income or loss of the\n                    -----------------------\nCompany for any relevant period, as computed in accordance with federal income\ntax principles and as adjusted pursuant to the following provisions, under the\nmethod of accounting elected by the Company for federal income tax purposes. The\nNet Income or Loss of the Company shall be computed, inter alia, by:\n\n                    (1)  including as income or deductions, as appropriate, any\n     tax-exempt income and related expenses that are neither properly included\n     in the computation of taxable income nor capitalized for federal income tax\n     purposes;\n\n                    (2)  including as a deduction when paid or incurred\n     (depending on the Company's method of accounting) any amounts utilized to\n     organize the Company or to promote the sale of (or to sell) an interest in\n     the Company, except that amounts for which an election is properly made by\n     the Company under Section 709(b) of the Code shall be accounted for as\n     provided therein;\n\n                    (3)  including as a deduction any losses incurred by the\n     Company in connection with the sale or exchange of property notwithstanding\n     that such losses may be disallowed to the Company for federal income tax\n     purposes under the related party rules of Code Section 267(a)(1) or 707(b);\n     and\n\n                    (4)  calculating the gain or loss on disposition of Company\n     assets and the depreciation, amortization or other cost recovery\n     deductions, if any, with respect to the Company's assets by reference to\n     their Book Value rather than their adjusted tax basis.\n\n               (f)  Percentage Interest. The Percentage Interest for each Member\n                    -------------------\nshall generally be as set forth on Exhibit A, as it may be amended from time to\ntime, and shall generally be determined by dividing the amount of each Member's\nCapital Commitment by the sum of the Capital Commitments of all of the Members\n(except as otherwise specifically provided in this Agreement). The sum of the\nMembers' Percentage Interests shall be one hundred percent (100%).\n\n               (g)  Sale or Exchange. A sale, exchange, liquidation or similar\n                    ----------------\ntransaction, event or condition with respect to any assets (except realizations\nof purchase discounts on commercial paper, certificates of deposit or other\nmoney-market instruments) of the Company of the type that would cause any\nrealized gain or loss to be recognized for income tax purposes under the Code\n(as determined without giving effect to the related party rules of Code Sections\n267(a)(1) and 707(b)).\n\n          6.3. Allocation of Net Income or Loss.\n\n               (a)  All Net Income or Loss of the Company attributable to the\nCompany's investment in the Fund shall be allocated among the Members in\nproportion to their Percentage Interests.\n\n               (b)  All Net Income or Loss attributable to the Company's Carry\nshall be allocated among the Members in proportion to their Percentage\nInterests; provided that the\n\n                                      12.\n\n \nManaging Members may, in their discretion, determine to allocate up to 20% of\nE*Trade's allocable share of the Net Income attributable to the Carry realized\nin a particular year to other Members. The Managing Members shall make any\ndetermination to make such an allocation within two months after the end of each\nFiscal Year.\n\n               (c)  All Net Income or Loss attributable to the Company's\noperations shall be allocated entirely to E*Trade. For this purpose, Net Income\nor Loss attributable to the Company's operations shall mean the Management Fee\nreceived by the Company reduced by all expenses of the Company other than\nexpenses directly attributable to the Company's investment in the Fund or the\nCompany's Carry, as determined by the Managing Members, in their discretion.\n\n                                  ARTICLE VII\n                                   EXPENSES\n\n          The Company will pay all costs and expenses incurred in connection\nwith its activities. The Members shall be entitled to reimbursement by the\nCompany for expenses incurred by them relating to the Company's business, as\ndetermined by the Managing Members in their discretion.\n\n                                 ARTICLE VIII\n                                 DISTRIBUTIONS\n\n          8.1. Interest. No interest shall be paid to any Member on account of\nhis interest in the capital of, or on account of his investment in, the Company.\n\n          8.2. Mandatory Distributions. Promptly upon receipt of any tax\ndistributions from the Fund, the Managing Members shall distribute such tax\ndistributions to the Members in proportion to their interests in the taxable\nincome of the Company for the period to which such distributions relate.\n\n          8.3. Discretionary Distributions. The Managing Members may in their\ndiscretion make additional distributions of cash or Securities among the Members\n(not including any Defaulting Members).\n\n               (a)  The distribution pursuant to this Paragraph 8.3 shall be\nmade among the Members as follows (with the source of a particular distribution\nbeing in the discretion of the Managing Members):\n\n                    (1)  To E*Trade to the extent attributable to any excess of\n     the Management Fee received over the Company's operating expenses (taking\n     into account as current or projected expenses any payments of compensation\n     to the Managing Members for their management of the Company if they are no\n     longer employed by E*Trade).\n\n                                      13.\n\n \n                    (2)  Among the Members in proportion to their respective\n     shares of the cumulative amount of undistributed Net Income attributable to\n     the Company's Carry to the extent made from such undistributed Net Income.\n\n                    (3)  Among the Members in proportion to their respective\n     shares of the cumulative amount of undistributed Net Income attributable to\n     the Company's investment in the Fund to the extent made from such\n     undistributed Net Income.\n\n                    (4)  Among the Members in proportion to their Capital\n     Contributions to the extent constituting a return of capital.\n\n               (b)  Immediately prior to any distribution in kind of Securities\n(or other assets) pursuant to any provision of this Agreement, the difference\nbetween the fair market value and the Book Value of any Securities (or other\nassets) distributed shall be allocated to the Capital Accounts of the Members as\nNet Income or Net Loss pursuant to Article VI.\n\n               (c)  Securities distributed in kind pursuant to this Paragraph\n8.3 shall be subject to such conditions and restrictions as the Managing Members\ndetermine are legally required.\n\n                                  ARTICLE IX\n                 ASSIGNMENT OR TRANSFER OF MEMBERS' INTERESTS\n\n          9.1. Restrictions on Transfer of Members' Interests. No Member may\nsell, assign, pledge, mortgage or otherwise dispose of all or any portion of his\ninterest in the Company without the consent of the Managing Members.\n\n          9.2. Opinion of Counsel. Notwithstanding any other provision of this\nAgreement, no transfer or other disposition of an interest in the Company shall\nbe permitted until the Managing Members shall have received, or waived receipt\nof, an opinion of counsel reasonably satisfactory to them that the effect of\nsuch transfer or disposition would not:\n\n               (a)  result in a violation of the Securities Act;\n\n               (b)  require the Company to register as an investment company\nunder the Investment Company Act of 1940, as amended;\n\n               (c)  require the Company or the Fund to register as an investment\nadviser under the Investment Advisers Act of 1940, as amended;\n\n               (d)  result in a termination of the Company for tax purposes, if\nsuch termination would have a material adverse effect on the Members;\n\n               (e)  result in a violation of any law, rule or regulation by the\nMembers or the Company;\n\n                                      14.\n\n \n                (f)  cause the Company to be characterized as a 'publicly traded\npartnership' (within the meaning set forth in Sections 512, 7704(b) and 469(k)\nof the Code) or materially increase the risk that the Company will be so\ncharacterized.\n\n          Such legal opinion shall be provided to the Managing Members by the\nCompany's counsel. All costs associated with such opinion shall be borne by the\ntransferring Member.\n\n          9.3.  Violation of Restrictions. In the event of any purported\ntransfer or other disposition of any Member's interest in the Company in\nviolation of the provisions of this Article IX, without limiting any other\nrights of the Company, the Managing Members shall have the option, in their sole\ndiscretion, to treat the Member as having withdrawn from the Company and to\npurchase or cause the Company to purchase such Member's interest for cash at a\nprice equal to the value thereof determined by the Managing Members as of a date\nselected by them. In the event of purchase, the terminated Member's and the\nremaining Members' interests in the Company shall be appropriately adjusted, and\nthe subject Member (and his purported transferee) shall have no further interest\nin the Company except to receive the purchase price, if any, for his interest as\ndetermined by the Managing Members. Such option must be exercised, if at all, by\nwritten notice to the affected Member (or his successor(s) in interest) given\nnot later than ninety (90) days after the Managing Members are advised in\nwriting of the purported transfer or disposition, and the purchase or withdrawal\nshall be consummated on the date specified in such notice, which shall not be\nlater than sixty (60) days after it is given.\n\n          9.4.  Agreement Not to Transfer. Each of the Members agrees with all\nother Members that he, she or it will not make any disposition of his, her or\nits interest in the Company, except as permitted by the provisions of this\nArticle IX.\n\n          9.5.  Multiple Ownership. In the event of any disposition which shall\nresult in multiple ownership of any Member's interest in the Company, the\nManaging Members may require one or more trustees or nominees to be designated\nto represent a portion of or the entire interest transferred for the purpose of\nreceiving all notices which may be given and all payments which may be made\nunder this Agreement and for the purpose of exercising all rights which the\ntransferor as a Member had pursuant to the provisions of this Agreement.\n\n          9.6.  Substitute Members. No transferee of a Member's interest may be\nadmitted to the Company as a substitute Member without the consent of the\nManaging Members, which consent shall be subject to the sole discretion of the\nManaging Members and shall not be subject to challenge by any transferor or\ntransferee.\n\n                                   ARTICLE X\n                        VESTING OF PERCENTAGE INTERESTS\n\n          10.1. Vesting of Managing Members' and E*Trade's Interests. The\nManaging Members' and E*Trade's interests in the Company shall be one hundred\npercent (100%) vested as of the date hereof.\n\n                                      15.\n\n \n          10.2. Vesting of Other Non-Managing Members' and Additional Members'\nInterests. The interest in the Company of any Non-Managing Member (other than\nE*Trade) and of any Additional Member shall vest in accordance with a vesting\nschedule (if any) established by the Managing Members for such other Non-\nManaging Member or Additional Member. Any amounts allocated Non-Managing Members\nor Additional Members that, for any reason, do not vest shall revert to the\nMembers whose interest in such amounts were diluted by the original allocation\nof such amounts to such Non-Managing Member or Additional Member.\n\n                                  ARTICLE XI\n                  DISSOLUTION AND LIQUIDATION OF THE COMPANY\n\n          11.1. Liquidation Procedures. Upon termination of the Company in\naccordance with Article II:\n\n                (a) The affairs of the Company shall be wound up and the Company\nshall be dissolved. The Managing Members shall serve as the liquidators.\n\n                (b) Distributions in dissolution may be made in cash or in kind\nor partly in cash and partly in kind.\n\n                (c) The Managing Members shall use their best judgment as to the\nmost advantageous time for the Company to sell investments or to make\ndistributions in kind provided that any such sales shall be made as promptly as\nis consistent with obtaining the fair value thereof.\n\n                (d) The proceeds of dissolution shall be applied to payment of\nliabilities of the Company and distributed to the Members in the following\norder:\n\n                    (1)  to the creditors of the Company in the order of\n     priority established by law;\n\n                    (2)  to the Members, in respect of the positive balances in\n     their Capital Accounts, after all Net Income or Net Loss arising upon the\n     liquidation (including amounts arising in connection with a distribution of\n     Securities) has been allocated among the Members.\n\n                                  ARTICLE XII\n                       FINANCIAL ACCOUNTING AND REPORTS\n\n          12.1. Tax Accounting and Reports. The Managing Members shall cause the\nCompany's tax return and IRS Form 1065, Schedule K-1, to be prepared and\ndelivered in a timely manner to the Non-Managing Members (but in no event later\nthan ninety (90) days after the close of each of the Company's Fiscal Years).\n\n                                      16.\n\n \n          12.2. Valuation of Securities and Other Assets Owned by the Company.\n\n                (a) Subject to the specific standards set forth below, the\nvaluation of Securities and other assets and liabilities under this Agreement\nshall be at fair market value. In determining the value of the interest of any\nMember or in any accounting between the Members, no value shall be placed on the\ngoodwill or the name of the Company. Upon dissolution of the Company, the\nCompany's name and any goodwill associated with the name shall be distributed to\nE*Trade.\n\n                (b) The following criteria shall be used for determining the\nfair market value of Securities.\n\n                    (1)  Securities not subject to investment letter or other\n     similar restrictions on free marketability:\n\n                         (A)  If traded on one (1) or more securities exchanges\n          or traded on NASDAQ, the value of each Security shall be deemed to be\n          the Security's closing price as reported in the Wall Street Journal or\n                                                          -------------------\n          another nationally recognized publication or service that reports such\n          data for the valuation date.\n\n                         (B)  If actively traded over-the-counter (but not on\n          NASDAQ), the value shall be deemed to be the closing bid price of such\n          Security on the valuation date.\n\n                         (C)  If there is no active public market, the Managing\n          Members shall make a determination of the fair market value on the\n          valuation date, taking into consideration developments concerning the\n          issuing company subsequent to the acquisition of its Securities, the\n          pricing of other private placements of Securities by the issuer, the\n          price of the Securities of other companies comparable to the issuer,\n          any financial data and projections of the issuing company provided to\n          the Managing Members and such other factor or factors as the Managing\n          Members may deem relevant.\n\n                    (2)  In the case of Securities subject to legal or\n     contractual restrictions on free marketability, appropriate adjustments to\n     the value determined under Paragraph 12.2(b)(1) above shall be made to\n     reflect the effect of the restrictions on transfer.\n\n                    (3)  The value of the Company's interest in the Fund shall\n     be the fair market value of the Company's interest in the Securities (and\n     other assets) of the Fund.\n\n                    (4)  If the Managing Members in good faith determine that,\n     because of special circumstances, the valuation methods set forth in this\n     Paragraph 12.2 do not fairly determine the value of a Security, the\n     Managing Members shall make such adjustments or use such alternative\n     valuation method as they deem appropriate.\n\n                                      17.\n\n \n          12.3. Supervision; Inspection of Books. Proper and complete books of\naccount of the affairs of the Company shall be kept under the supervision of the\nManaging Members at the principal office of the Company. Such books shall be\nopen to inspection by a Non-Managing Member, at any reasonable time, upon\nreasonable notice, during normal business hours.\n\n          12.4. Confidentiality. All information provided to Non-Managing\nMembers under this Article XII shall be used by Non-Managing Members in\nfurtherance of their interests as Non-Managing Members and, subject to\ndisclosures required by applicable law, each Non-Managing Member hereby agrees\nto maintain the confidentiality of such financial statements and other\ninformation provided to Non-Managing Members hereunder.\n\n                                 ARTICLE XIII\n                               OTHER PROVISIONS\n\n          13.1. Execution and Filing of Documents. The Managing Members shall\nexecute and file a Certificate conforming to the requirements of the Act in the\noffice of the Secretary of State for the State of Delaware and shall execute a\nfictitious business name statement and file or cause such statement to be filed\nif required by Delaware law.\n\n          13.2. Other Instruments and Acts. The Members agree to execute any\nother instruments or perform any other acts that are or may be necessary to\neffectuate and carry on the Company.\n\n          13.3. Binding Agreement. This Agreement shall be binding upon the\ntransferees, successors, assigns and legal representatives of the Members.\n\n          13.4. Governing Law. This Agreement shall be governed by and construed\nunder the laws of the State of Delaware as applied to agreements among Delaware\nresidents made and to be performed entirely within Delaware.\n\n          13.5. Notices. Any notice or other communication that a Member desires\nto give to another Member shall be in writing and shall be deemed effectively\ngiven upon personal delivery or upon deposit in any United States mail box, by\nregistered or certified mail, postage prepaid, or upon transmission by telegram\nor telecopy, addressed to the other Member at the address shown in the exhibits\nattached to this Agreement or at such other address as a Member may designate by\nfifteen (15) days' advance written notice to the other Members.\n\n          13.6. Power of Attorney. By signing this Agreement, each Non-Managing\nMember designates and appoints each of the Managing Members as its true and\nlawful attorney, in its name, place and stead to make, execute, sign and file\nsuch instruments, documents or certificates that may from time to time be\nrequired of the Company by the laws of the United States of America, the laws of\nthe State of Delaware or any other state in which the Company shall conduct its\ninvestment activities in order to qualify or otherwise enable the Company to\nconduct its affairs in such jurisdictions; provided, however, that in no event\nshall the Managing Members be deemed to have the authority under this Paragraph\n13.6 to take any action that would result in any Non-Managing Member losing the\nlimitation on liability afforded hereunder.\n\n                                      18.\n\n \n          13.7.  Amendment Procedure. This Agreement (and any exhibits to this\nAgreement) may be amended only with the written consent of the Managing Members.\nNo amendment shall, however, (i) enlarge the obligations of any Member under\nthis Agreement without the written consent of such Member, (ii) dilute the\nrelative interest of any Member in the Net Income, Net Loss, distributions or\ncapital of the Company without the written consent of such Member (except such\ndilution as may result from additional capital contributions from the Members or\nthe admission of Additional Members as specifically permitted pursuant to this\nAgreement or as a result of a termination or withdrawal of a Non-Managing\nMember), or (iii) alter or waive the terms of this Paragraph 13.7 or Paragraphs\n13.14 and 13.17. The Managing Members shall promptly furnish copies of any\namendments to this Agreement and the Company's Certificate to all Members.\n\n          13.8.  Effective Date. This Agreement shall be effective on the date\nset forth in the first paragraph of this Agreement.\n\n          13.9.  Entire Agreement. This Agreement constitutes the entire\nagreement of the Members and supersedes all prior agreements between the Members\nwith respect to the Company.\n\n          13.10. Titles; Subtitles. The titles and subtitles used in this\nAgreement are used for convenience only and shall not be considered in the\ninterpretation of this Agreement.\n\n          13.11. Company Name. The Company shall have the exclusive ownership\nand right to use the Company name (and any name under which the Company shall\nelect to conduct its affairs) as long as the Company continues.\n\n          13.12. Exculpation. Neither the Managing Members nor their Affiliates\nshall be liable to a Non-Managing Member or the Company for honest mistakes of\njudgment, for action or inaction taken reasonably and in good faith for a\npurpose that was reasonably believed to be in the best interests of the Company,\nfor losses due to such mistakes, action or inaction, or to the negligence,\ndishonesty or bad faith of any employee, broker or other agent of the Company,\nthe Managing Members or their Affiliates provided that such employee, broker or\nagent was selected, engaged or retained and supervised with reasonable care,\nprovided that this Paragraph 13.12 shall not extend to any action which\nconstitutes fraud, willful misconduct or gross negligence. The Managing Members\nmay consult with counsel and accountants in respect of Company affairs and be\nfully protected and justified in any action or inaction that is taken in\naccordance with the advice or opinion of such counsel or accountants, provided\nthat they shall have been selected with reasonable care. Notwithstanding any of\nthe foregoing to the contrary, the provisions of this Paragraph 13.12 and of\nParagraph 13.13 hereof shall not be construed so as to relieve (or attempt to\nrelieve) any person of any liability by reason of recklessness or intentional\nwrongdoing or to the extent (but only to the extent) that such liability may not\nbe waived, modified or limited under applicable law, but shall be construed so\nas to effectuate the provisions of this Paragraph 13.12 and of Paragraph 13.13\nto the fullest extent permitted by law.\n\n          13.13. Indemnification. The Company agrees to indemnify, out of the\nassets of the Company only, the Managing Members and their Affiliates (and their\nagents), to the fullest extent permitted by law and to save and hold them\nharmless from and in respect of all (a) reason-\n\n                                      19.\n\n \nable fees, costs, and expenses paid in connection with or resulting from any\nclaim, action or demand against the Managing Members, their Affiliates or any\nagent thereof, the Company or their agents that arise out of or in any way\nrelate to the Company, its properties, business or affairs and (b) such claims,\nactions and demands and any losses or damages resulting from such claims,\nactions and demands, including amounts paid in settlement or compromise of any\nsuch claim, action or demand; provided, however, that this indemnity shall not\nextend to conduct not undertaken in good faith nor to any fraud, willful\nmisconduct or gross negligence. Any person receiving an advance with respect to\nexpenses shall be required to agree to return such advance to the Company in the\nevent it is subsequently determined that such person was not entitled to\nindemnification hereunder. Any indemnified party shall promptly seek recovery\nunder any other indemnity or any insurance policies by which such indemnified\nparty may be indemnified or covered or from any portfolio company in which the\nCompany has an investment, as the case may be. No payment or advance may be made\nto any person under this Paragraph 13.13 to any person who may have a right to\nany other indemnity (by insurance or otherwise) unless such person shall have\nagreed, to the extent of any other recovery, to return such payments or advances\nto the Company.\n\n          13.14. Limitation of Liability of Members. Except as otherwise\nexpressly provided herein or as required by Delaware law, no Member shall be\nbound by, nor be personally liable for, the expenses, liabilities or obligations\nof the Company in excess of the balance of such Member's Capital Commitment to\nthe Company.\n\n          13.15. Arbitration. Any controversy or claim arising out of or\nrelating to this Agreement, or the breach thereof, shall be settled by\narbitration in San Francisco, California, in accordance with the rules, then\nobtaining, of the American Arbitration Association. Any award shall be final,\nbinding and conclusive upon the parties. A judgment upon the award rendered may\nbe entered in any court having jurisdiction thereof.\n\n          13.16. Tax Matters Partner. Thomas A. Bevilacqua shall be the\nCompany's Tax Matters Partner under the Code ('TMP'). The TMP shall have the\nright to resign by giving thirty (30) days' written notice to the Members. Upon\nthe resignation, dissolution or Bankruptcy of the TMP, a successor TMP shall be\nelected by a majority in interest of the other Members. The TMP shall employ\nexperienced tax counsel to represent the Company in connection with any audit or\ninvestigation of the Company by the Internal Revenue Service ('IRS') and in\nconnection with all subsequent administrative and judicial proceedings arising\nout of such audit. The fees and expenses of such, and all expenses incurred by\nthe TMP in serving as the TMP, shall be Company expenses and shall be paid by\nthe Company. Notwithstanding the foregoing, it shall be the responsibility of\nthe Members, at their expense, to employ tax counsel to represent their\nrespective separate interests. If the TMP is required by law or regulation to\nincur fees and expenses in connection with tax matters not affecting each of the\nMembers, then the TMP may, in his sole discretion, seek reimbursement from or\ncharge such fees and expenses to the Members on whose behalf such fees and\nexpenses were incurred. The TMP shall keep the Members informed of all\nadministrative and judicial proceedings, as required by Section 6223(g) of the\nCode, and shall furnish a copy of each notice or other communication received by\nthe TMP from the IRS to each Member, except such notices or communications as\nare sent directly to such Member by the IRS. The relationship of the TMP to the\nMembers is that of a fiduciary, and the TMP has a fiduciary obligation to\nperform his duties as TMP in such manner as will serve the\n\n                                      20.\n\n \nbest interests of the Company and all of the Company's Members. To the fullest\nextent permitted by law, the Company agrees to indemnify the TMP and his agents\nand save and hold them harmless from and in respect to all (i) reasonable fees,\ncosts and expenses in connection with or resulting from any claim, action or\ndemand against the TMP, the Managing Members or the Company that arise out of or\nin any way relate to the TMP's status as TMP for the Company, and (ii) all such\nclaims, actions and demands and any losses or damages therefrom, including\namounts paid in settlement or compromise of any such claim, action or demand;\nprovided that this indemnity shall not extend to conduct by the TMP adjudged (i)\nnot to have been undertaken in good faith to promote the best interests of the\nCompany or (ii) to have constituted recklessness or intentional wrongdoing by\nthe TMP.\n\n          13.17. Taxation as Company. The Managing Members, while serving as\nsuch, agree to use their best efforts to avoid taking any action that would\ncause the Company to be classified as other than a partnership for federal\nincome tax purposes.\n\n                                  ARTICLE XIV\n                    MISCELLANEOUS TAX COMPLIANCE PROVISIONS\n\n          14.1.  Substantial Economic Effect. The provisions of this Agreement\nare intended to comply generally with the provisions of Treasury Regulation\nSection 1.704-1, and shall be interpreted and applied in a manner consistent\nwith such Regulations; and, to the extent the subject matter thereof is\notherwise not addressed by this Agreement, the provisions of Treasury\nRegulations Section 1.704-1 are hereby incorporated by reference unless the\nManaging Members shall determine that such incorporation will result in economic\nconsequences inconsistent with the economic arrangement among the Members as\nexpressed in this Agreement. In the event the Managing Members shall determine\nthat it is prudent to modify the manner in which the Capital Accounts, or any\ndebits or credits thereto, are computed or allocated or the manner in which\ndistributions and contributions upon liquidation (or otherwise) of the Company\n(or any Member's interest therein) are effected in order to comply with such\nRegulations and other applicable tax laws, or to assure that the Company is\ntreated as a partnership for tax purposes, or to achieve the economic\narrangement of the Members as expressed in this Agreement, then, notwithstanding\nanything in this Agreement to the contrary, the Managing Members may make such\nmodification, provided that it is not likely to have a material detrimental\neffect on the tax consequences and total amounts distributable to any Non-\nManaging Member pursuant to Articles VIII and XI as applied without giving\neffect to such modification. The Managing Members shall also (i) make any\nadjustments that are necessary or appropriate to maintain equality between the\nCapital Accounts of the Members and the amount of Company capital reflected on\nthe Company's balance sheet, as computed for book purposes pursuant to this\nAgreement, in accordance with Regulations Section 1.704-1(b)(2)(iv)(g), and (ii)\nmake any appropriate modifications in the event unanticipated events (such as\nthe incurrence of nonrecourse indebtedness) might otherwise cause the\nallocations under this Agreement not to comply with Treasury Regulations Section\n1.704, provided in each case that the Managing Members determine that such\nadjustments or modifications shall not result in economic consequences\ninconsistent with the economic arrangement among the Members as expressed in\nthis Agreement.\n\n                                      21.\n\n \n          14.2. Income Tax Allocations.\n\n                (a)  Except as otherwise provided in this paragraph or as\notherwise required by the Code and the rules and Treasury Regulations\npromulgated thereunder, income, gain, loss, deduction, or credit of the Company\nfor income tax purposes shall be allocated in the same manner the corresponding\nbook items are allocated pursuant to this Agreement.\n\n                (b)  In accordance with Code Section 704(c) and the Treasury\nRegulations thereunder, income, gain, loss and deduction with respect to any\nasset contributed to the capital of the Company shall, solely for tax purposes,\nbe allocated between the Members so as to take account of any variation between\nthe adjusted basis of such property to the Company for federal income tax\npurposes and its initial Book Value.\n\n                (c)  In the event the Book Value of any Company asset is\nadjusted pursuant to the terms of this Agreement, subsequent allocations of\nincome, gain, loss and deduction with respect to such asset shall take account\nof any variation between the adjusted basis of such asset for federal income tax\npurposes and its Book Value in the same manner as under Code Section 704(c) and\nthe Treasury Regulations thereunder.\n\n          14.3. Withholding.\n\n          The Company shall at all times be entitled to make payments with\nrespect to any Member in amounts required to discharge any obligation of the\nCompany to withhold or make payments to any governmental authority with respect\nto any federal, state, local or other jurisdictional tax liability of such\nMember arising as a result of such Member's interest in the Company. Any such\nwithholding payment shall be charged to the Member's Capital Account.\n\n\n\n           [The remainder of this page is intentionally left blank.]\n\n\n                                      22.\n\n \n          IN WITNESS WHEREOF, the Members have executed this Agreement as of the\ndate first above written.\n\n                                             MANAGING MEMBERS\n\n                                             \/s\/ CHRISTOS M. COTSAKOS   \n                                             __________________________________\n                                             Christos M. Cotsakos\n\n                                             \/s\/ THOMAS A. BEVILACQUA\n                                             __________________________________\n                                             Thomas A. Bevilacqua\n\n\n\n                                             NON-MANAGING MEMBER\n\n                                             E*Trade Group, Inc.\n\n\n                                             By: \/s\/ THOMAS A. BEVILACQUA      \n                                                -------------------------------\n\n                                             Title:____________________________\n\n                                      23.\n\n \n                                   EXHIBIT A\n\n                         MEMBERS' CAPITAL COMMITMENTS\n                           AND PERCENTAGE INTERESTS\n\n                                               Capital      Percentage     \nName\/Address                                 Commitment      Interest      \n----------------------------------------------------------------------------\n                                                                           \nManaging Members:                                                          \n                                                                           \nChristos M. Cotsakos                          $ 87,500          25%        \nThomas A. Bevilacqua                            87,500          25%        \n                                                                           \n                                                                           \nNon-Managing Member:                                                       \n                                                                           \nE*Trade Group, Inc.                            175,000          50%*       \n                                              --------        ------       \n                                              $350,000         100%         \n\n\n____________________\n\n  *  Subject to reduction (but not below 40%), with respect to the allocation of\n     the Company's Carry, as described in Section 6.3(b) of the Agreement.\n\n                                      A-1\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7386],"corporate_contracts_industries":[],"corporate_contracts_types":[9573],"class_list":["post-41646","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-e-trade-group-inc","corporate_contracts_types-formation"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41646","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41646"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41646"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41646"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41646"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}