EXHIBIT 10.30

E*Trade Ventures II, LLC

A Delaware Limited Liability Company

LIMITED LIABILITY COMPANY
OPERATING AGREEMENT

June 16, 2000

      

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

TABLE OF CONTENTS

Page ARTICLE I NAME, PURPOSE AND PRINCIPAL OFFICE OF COMPANY 1  

1.1.   Name 1 1.2.   Agreement 1 1.3.   Purpose; Powers 1 1.4.   Registered
Office and Agent 2 1.5.   Principal Office 2 1.6.   Definitions 2

  ARTICLE II TERM AND TERMINATION OF THE COMPANY 3  

2.1.   Term 3 2.2.   Termination 3 2.3.   Extension of Term 3

  ARTICLE III INITIAL MEMBERS; CHANGES IN MEMBERSHIP 3  

3.1.   Name and Address 3 3.2.   Admission of Additional Members 3 3.3.   Death,
Disability or Withdrawal of a Managing Member 3 3.4.   Withdrawal of a Member 4

  ARTICLE IV MANAGEMENT, DUTIES AND RESTRICTIONS 4  

4.1.   Management 4 4.2.   Conversion of Status as Managing Member 5 4.3.  
Liability of Members to the Company and the Other Members 5 4.4.   Restrictions
on the Members 5 4.5.   Additional Restrictions on Non-Managing Members 5 4.6.  
Officers 5

  ARTICLE V CAPITAL CONTRIBUTIONS 6  

5.1.   Capital Commitments and Membership Interests of the Members 6 5.2.  
Liability of the Members 6 5.3.   Liability of Transferees 6 5.4.   Defaulting
Members 6

  ARTICLE VI CAPITAL ACCOUNTS AND ALLOCATIONS 7  

6.1.   Capital Accounts 7 6.2.   Definitions 7 6.3.   Allocation of Net Income
or Loss 9

  ARTICLE VII EXPENSES 9  

i

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

      

Page ARTICLE VIII DISTRIBUTIONS 9  

8.1.   Interest 9 8.2.   Mandatory Distributions 9 8.3.   Discretionary
Distributions 9

  ARTICLE IX ASSIGNMENT OR TRANSFER OF MEMBERS’ INTERESTS 10  

9.1.   Restrictions on Transfer of Members’ Interests 10 9.2.   Opinion of
Counsel 10 9.3.   Violation of Restrictions 11 9.4.   Agreement Not to Transfer
11 9.5.   Multiple Ownership 11 9.6.   Substitute Members 11

  ARTICLE X TESTING OF PERCENTAGE INTERESTS 11  

10.1.   Vesting of Managing Members’ and E*Trade’s Interests 11 10.2.   Vesting
of Other Non-Managing Members’ and Additional Members’ Interests 11

  ARTICLE XI DISSOLUTION AND LIQUIDATION OF THE COMPANY 11  

11.1.   Liquidation Procedures 11

  ARTICLE XII FINANCIAL ACCOUNTING AND REPORTS 12  

12.1.   Tax Accounting and Reports 12 12.2.   Valuation of Securities and Other
Assets Owned by the Company 12 12.3.   Supervision; Inspection of Books 12 12.4.
  Confidentiality 12

  ARTICLE XIII OTHER PROVISIONS 19  

13.1.   Execution and Filing of Documents 13 13.2.   Other Instruments and Acts
13 13.3.   Binding Agreement 13 13.4.   Governing Law 13 13.5.   Notices 13
13.6.   Power of Attorney 13 13.7.   Amendment Procedure 13 13.8.   Effective
Date 13 13.9.   Entire Agreement 13 13.10.   Titles; Subtitles 13 13.11.  
Company Name 13 13.12.   Exculpation 13 13.13.   Indemnification 14 13.14.  
Limitation of Liability of Members 14 13.15.   Arbitration 14 13.16.   Tax
Matters Partner 14 13.17.   Taxation as Company 15

ii

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

Page ARTICLE XIV MISCELLANEOUS TAX COMPLIANCE PROVISIONS 15  

14.1.   Substantial Economic Effect 15 14.2.   Income Tax Allocations 15 14.3.  
Withholding 15

EXHIBIT A Members’ Capital Commitments and Percentage Interests  

      

iii

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

E*TRADE VENTURES II, LLC
a Delaware Limited Liability Company

OPERATING AGREEMENT

             This Operating Agreement is entered into as of the 16th day of
June, 2000, by and among (i) Christos M. Cotsakos and Thomas A. Bevilacqua, as
managing members (the “Managing Members”), and (ii) E*Trade Group, Inc.
(“E*Trade”) and each of the other persons whose names are set forth under the
heading “Non-Managing Members” on Exhibit A attached hereto, as non-Managing
Members (such persons and any additional non-Managing Member admitted after the
date of this Agreement being referred to herein as the “Non-Managing Members”).
The Managing Members and the Non-Managing Members are referred to herein
collectively as the “Members.”

             The Members have formed the Company by causing a Certificate of
Formation (the “Certificate”) conforming to the requirements of the Delaware
Revised Limited Liability Company Act (the “Act”) to be filed in the Office of
the Secretary of State for the State of Delaware.

ARTICLE I
NAME, PURPOSE AND
PRINCIPAL OFFICE OF COMPANY

        1.1.  Name. The name of the Company is “E*Trade Ventures II, LLC.” The
affairs of the Company shall be conducted under such name or such other name as
the Managing Members may, in their discretion, determine. E*Trade hereby grants
the Company the right, at no cost, to use the “E*Trade” name for the term of the
Company as set forth in Article II hereof.

        1.2.  Agreement. 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
be amended from time to time. It is the express intention of the Members that
this Agreement shall be the sole statement of agreement among them, and, except
to the extent a provision of this Agreement expressly incorporates matters by
express reference, this Agreement shall govern even when inconsistent with or
different from the provisions of the Act or any other provision of law.

        1.3.  Purpose; Powers.

              (a)  Purpose. The primary purpose of the Company is to act as the
general partner of E*Trade eCommerce Fund II, L.P. (the “ Fund”).

              (b)  Powers. Subject to all of the terms and provisions hereof,
the Company shall have all powers necessary, suitable or convenient for the
accomplishment of the purpose of the Company, including, without limitation, the
following:

        (1)  to purchase, sell, invest and trade in securities of every kind,
including, without limitation, capital stock, limited partnership interests,
bonds, notes, debentures, securities convertible into other securities, trust
receipts and other obligations, instruments or evidences of indebtedness, as
well as in rights, warrants and options to purchase securities;

        (2)  to make and perform all contracts and engage in all activities and
transactions necessary or advisable to carry out the purposes of the Company,
including, without limitation, the purchase, sale, transfer, pledge and exercise
of all rights, privileges and incidents of ownership or possession with respect
to any Company asset or liability; the borrowing or lending of money and the
securing of payment of any Company obligation by hypothecation or pledge of, or
grant of a security interest in, Company assets; and the guarantee of or
becoming surety for the debts of others; and

        (3)  otherwise to have all the powers available to it as a limited
liability company under the Act.

1

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

        1.4.  Registered Office and Agent. The initial address of the Company’s
registered office in Delaware is 15 East North Street, Dover, Wilmington, County
of Kent, and its initial agent at such address for service of process is
Incorporating Services Limited. The Managing Members may change the registered
office and agent for service of process as they from time to time may determine.

        1.5.  Principal Office. The principal office of the Company shall
initially be located at 4500 Bohannon Street, Menlo Park, California 94025. The
Managing Members may change the location of the principal office of the Company
at any time.

        1.6.  Definitions.

              (a)  Additional Members. This term shall have the meaning ascribed
to it in Paragraph 3.2.

              (b)  Affiliate. With reference to any person, any other person
controlling, controlled by or under direct or indirect common control with such
person.

              (c)  Agreement. This Operating Agreement of E*Trade Ventures II,
LLC, a Delaware limited liability company.

              (d)  Assignee. This term shall have the meaning ascribed to it in
Paragraph 5.4.

              (e)  Bankruptcy. A person or entity shall be deemed bankrupt if:

        (1)  any proceeding is commenced against such person or entity as
“debtor” for any relief under bankruptcy or insolvency laws, or laws relating to
the relief of debtors, reorganizations, arrangements, compositions or extensions
and such proceeding is not dismissed within ninety (90) days after such
proceeding has commenced, or

        (2)  such person or entity commences any proceeding for relief under
bankruptcy or insolvency laws or laws relating to the relief of debtors,
reorganizations, arrangements, compositions or extensions.

              (f)  Book Value. This term shall have the meaning ascribed to it
in Paragraph 6.2(a).

              (g)  Capital Account. This term shall have the meaning ascribed to
it in Paragraph 6.2(b).

              (h)  Capital Commitment. This term shall have the meaning ascribed
to it in Paragraph 5.1.

              (i)  Capital Contribution. This term shall have the meaning
ascribed to it in Paragraph 5.1(b).

              (j)  Carry. The Company’s twenty-five percent (25%) carried
interest in the income of the Fund.

              (k)  Certificate. The Certificate of Formation of E*Trade
Ventures II, LLC, a Delaware limited liability company.

              (l)  Code. The Internal Revenue Code of 1986, as amended from time
to time (and any corresponding provisions of succeeding law).

              (m)  Defaulting Member. This term shall have the meaning ascribed
to it in Paragraph 5.4(a).

              (n)  Fiscal Quarter. This term shall have the meaning ascribed to
it in Paragraph 6.2(c).

              (o)  Fiscal Year. This term shall have the meaning ascribed to it
in Paragraph 6.2(d).

              (p)  Management Fee. The management fee receivable by the Company
from the Fund.

              (q)  Net Income or Net Loss. This term shall have the meaning
ascribed to it in Paragraph 6.2(e).

              (r)  Percentage Interest. This term shall have the meaning
ascribed to it in Paragraph 6.2(f).

              (s)  Sale or Exchange. This term shall have the meaning ascribed
to it in Paragraph 6.2(g).

2

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

              (t)  Securities Act. The Securities Act of 1933, as amended from
time to time.

              (u)  Securities. Securities of every kind and nature and rights
and options with respect thereto, including stock, notes, bonds, debentures,
evidences of indebtedness and other business interests of every type, including
interests in partnerships, joint ventures, proprietorships and other business
entities.

              (v)  TMP. This term shall have the meaning ascribed to it in
Paragraph 13.16.

              (w)  Termination Date. This term shall have the meaning ascribed
to it in Paragraph 2.1.

              (x)  Treasury Regulations. The Income Regulations promulgated
under the Code, as such Regulations may be amended from time to time (including
corresponding provisions of succeeding Regulations).

ARTICLE II
TERM AND TERMINATION OF THE COMPANY

        2.1.  Term. The term of the Company shall continue until one (1) year
after the dissolution of the Fund unless sooner terminated as provided in
Paragraph  2.2 or by operation of law or extended as provided in Paragraph 2.3.
The last day of the term of the Company, as such may be extended as provided
herein, is referred to herein as the “Termination Date.”

        2.2.  Termination. The Company shall terminate prior to the end of the
period specified in Paragraph 2.1 at the election of the Managing Members. The
Managing Members shall deliver notice of such termination to the Non-Managing
Members.

        2.3.  Extension of Term. The term of the Company may be extended by the
Managing Members. The Managing Members shall provide notice of any such
extension to the Non-Managing Members.

ARTICLE III
INITIAL MEMBERS; CHANGES IN MEMBERSHIP

        3.1.  Name and Address. The persons listed on Exhibit A are hereby
admitted as Members of the Company. Exhibit A shall be amended from time to time
to reflect changes in the membership of the Company (including the admission of
Additional Members). Any such amended Exhibit A shall supersede all prior
Exhibit A’s and become part of this Agreement and shall be kept on file at the
principal office of the Company.

        3.2.  Admission of Additional Members. Individuals involved in the
activities of the Company may be admitted to the Company as additional members
(“Additional Members”) on such terms and conditions as shall be determined by
the Managing Members, in their sole discretion. Each Additional Member shall be
admitted only if he shall have executed this Agreement or an appropriate
amendment to it in which he agrees to be bound by the terms and provisions of
this Agreement as they may be modified by that amendment. Admission of a new
Member shall not cause the dissolution of the Company. As reflected on
Exhibit A, it is anticipated that Additional Members shall have aggregate
Percentage Interests of eighteen percent (18%). Unless otherwise agreed by
E*Trade, the Managing Members’ Percentage Interests shall be equally diluted
(and E*Trade’s Percentage Interest shall not be diluted) to the extent of Pe
rcentage Interests granted to any Additional Members. In the event the
Additional Members have aggregate Percentage Interests of less than eighteen
percent (18%) at any time (whether by reason of a determination not to admit
Additional Members or the withdrawal or failure to vest of an Additional
Member), such shortfall shall revert to and be allocated equally among the
Managing Members.

        3.3.  Death, Disability or Withdrawal of a Managing Member.

              (a)  In the case of a Managing Member’s death, permanent physical
or mental disability or withdrawal from the Company, the Company shall not
dissolve or terminate, but its business shall be continued without interruption
or without any break in continuity by the remaining Members, with the remaining
Managing Member continuing to serve as the sole Managing Member unless he
appoints an additional Managing Member, in his sole discretion. Any deceased,
disabled or withdrawn Managing Member (or the holder of his interest) shall
become a Non-Managing Member, and the interest of such Managing Member shall
become a Non-Managing Member’s interest. Such former Managing Member or the
holder of such interest shall have no right to participate in

3

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

the management of the Company and no right to consent to or vote upon any
matter, except as provided in Paragraph 13.7.

              (b)  If such change in the former Managing Member’s status shall
result in multiple ownership of any Non-Managing Member’s interest, one or more
trustees or nominees may be required to be designated to represent a portion of
or the entire Non-Managing Member’s interest for the purpose of receiving all
notices which may be given and all payments which may be made under this
Agreement, and for the purpose of exercising all rights which such Non-Managing
Member has pursuant to the provisions of this Agreement.

        3.4.  Withdrawal of a Member.

              (a)  Except with the consent of the Managing Members, the interest
of a Member may not be withdrawn from the Company in whole or in part except in
the event of the death or declaration of legal incompetency of such Member and
in such event only if the election to withdraw is given by the personal
representative or representatives of such Member in writing to the Managing
Members within three  (3) months after the date of the appointment of such
personal representative or representatives, or within six (6) months from the
date of death or declaration of legal incapacity of such Member, whichever is
earlier. In the event of such election to withdraw, the interest of such Member
shall be withdrawn in its entirety and shall be valued as of the date of
withdrawal pursuant to the provisions of Paragraph 12.2 and paid for in the
manner hereinafter provided by this paragraph. The Managing Membe rs shall be
entitled, in their sole discretion, to make the distribution in respect of the
interest of the withdrawing Member in cash, in kind or pursuant to a promissory
note due upon termination of the Company, or in any combination thereof. If any
distribution is to be made in kind and if such distribution cannot be made in
full because of restrictions on the transfer of Securities or for any other
reason, distribution may be delayed until an effective transfer and distribution
may be made, and Securities that will be transferred in respect of the
withdrawing Member’s interest shall be designated. Such designated Securities
will nevertheless be subject to the full right and power of the Managing Members
to deal with them in the best interests of the Company, including the right to
substitute other Securities of equivalent value.

              (b)  In the event of the withdrawal of any Member pursuant hereto,
the Percentage Interests and Capital Accounts of the withdrawing Member and the
remaining Members shall be appropriately adjusted, including any adjustments
required as a result of any vesting provisions applicable to the withdrawing
Member’s interest.

              (c)  The withdrawal of a Member shall not be cause for dissolution
of the Company.

ARTICLE IV
MANAGEMENT, DUTIES AND RESTRICTIONS

        4.1.  Management. The Managing Members shall have the sole and exclusive
control of the management and conduct of the affairs of the Company. Any action
shall, unless otherwise specified by the Managing Members, require approval of
both Managing Members (or the sole remaining Managing Member). The right, power
and authority of the Managing Members to carry on the affairs of the Company and
to do any and all acts on behalf of the Company shall, subject to any specific
limitations set forth in this Agreement and the Limited Partnership Agreement of
the Fund, include without limitation the following:

              (a)  To cause the Company to perform the duties and exercise the
rights of the general partner of the Fund.

              (b)  To purchase, hold, sell or otherwise effect transactions in
Securities (whether marketable or unmarketable) and other investments of the
Company.

              (c)  To incur indebtedness on behalf of the Company and the Fund.

              (d)  To guarantee indebtedness on behalf of the Company and the
Fund.

              (e)  To loan money to any of the Members upon such terms and
conditions as the Managing Members may prescribe.

              (f)  To deposit or hold Securities and other assets of the Company
in the Company’s name or in such street or nominee names as may be determined
from time to time by the Managing Members, at such

4

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

securities firms, banks or depositories as shall be designated by the Managing
Members. All withdrawals therefrom or directions with respect thereto shall be
made on the signature of either Managing Member.

              (g)  To provide management services or to designate an entity or
entities to manage the Fund and to receive fees from the Fund and to enter into
an agreement or agreements with such an entity or entities upon such terms and
conditions as the Managing Members shall deem appropriate for the management of
the Fund. Such an agreement or agreements may be entered into with firms or
business entities controlled by or comprised of either or both Managing Members
or an Affiliate of either or both Managing Members.

              (h)  Generally, to perform all acts deemed by the Managing Members
appropriate or incidental to the foregoing and to carry out the purposes and
business of the Company and the Fund.

        4.2.  Conversion of Status as Managing Member. Any Managing Member who
has become a Non-Managing Member shall not participate in the control,
management and direction of the business of the Company or the Fund.

        4.3.  Liability of Members to the Company and the Other Members. No
Member shall be liable to any other Member for honest mistakes in judgment or
for action or inaction taken in good faith for a purpose that was reasonably
believed to be in the best interests of the Company, or for losses due to such
mistakes, action or inaction, or for the negligence, dishonesty or bad faith of
any employee, broker or other agent of the Company; provided that such employee,
broker or agent was selected, engaged or retained with reasonable care. Each
Managing Member and, with the consent of the Managing Members, a Non-Managing
Member, may consult with counsel and accountants on matters relating to Company
affairs and shall be fully protected and justified in acting in accordance with
the advice of counsel or accountants, provided that such counsel or accountants
shall have been selected with reasonable care. Notwithstanding any of the for
egoing to the contrary, the provisions of this Paragraph 4.3 shall not be
construed so as to relieve (or attempt to relieve) any person of any liability
incurred (i) as a result of recklessness or intentional wrongdoing, or (ii) to
the extent (but only to the extent) that such liability may not be waived,
modified or limited under applicable law, provided that this Paragraph 4.3 shall
be construed so as to effectuate the provisions hereof to the fullest extent
permitted by law.

        4.4.  Restrictions on the Members.

              (a)  Except with the consent of the Managing Members or as
otherwise specifically permitted by this Agreement, no Member shall mortgage,
encumber, pledge or otherwise dispose of his or her interest in the Company or
in the Company’s assets or property or enter into any agreement as a result of
which any other person shall have rights as a Member of the Company.

              (b)  No Member may buy from or sell to the Company any Securities
without the prior written consent of the Managing Members except purchases or
sales explicitly permitted by this Agreement.

              (c)  No Member shall do any act in contravention of this Agreement
or the Fund’s Limited Partnership Agreement.

        4.5.  Additional Restrictions on Non-Managing Members.

              (a)  The Non-Managing Members shall take no part in the control or
management of the affairs of the Company nor shall Non-Managing Members have any
power or authority to act for or on behalf of the Company as a result of this
Agreement except as expressly authorized from time to time by the Managing
Members.

              (b)  Except as otherwise required by law or as expressly provided
herein, the Non-Managing Members shall have no rights to vote, call meetings of
the Members or otherwise exercise any similar rights or powers.

        4.6.  Officers. The Managing Members may appoint such officers of the
Company as they shall deem advisable and shall have the discretion to remove any
officers at any time.

5

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

ARTICLE V
CAPITAL CONTRIBUTIONS

        5.1.  Capital Commitments and Membership Interests of the Members. Set
forth opposite the name of each Member listed on Exhibit A attached hereto is
such Member’s “Capital Commitment” to the Company and its percentage membership
interest in the Company (“Percentage Interest”). Each Member’s Capital
Commitment represents the aggregate amount of capital that such Member has
agreed to contribute to the Company in accordance with the terms hereof in order
to fund the Company’s capital commitment to the Fund. Exhibit A shall be amended
from time to time to reflect any changes to the Capital Commitments and
Percentage Interests of the Members.

              (a)  The Managing Members shall provide at least twelve (12)
business days’ prior written notice of any required contribution to the capital
of the Company, specifying the amount thereof. The Members shall make their
contributions to the Company’s capital in cash, except as otherwise determined
by the Managing Members (who may allow contributions in the form of promissory
notes). No Member shall be required to contribute any amount in excess of such
Member’s Capital Commitment (as such Capital Commitment may be increased
pursuant to subparagraph (a)) without such Member’s written consent. Any capital
contributions hereunder with respect to the Capital Commitments of the Members
(each a “Capital Contribution”) shall be made in such amount as shall be
specified by the Managing Members and any such contributions required hereunder
shall be in proportion to the Mem bers’ respective Capital Commitments.

              (b)  In addition to the Capital Commitments set forth on Exhibit
A, E*Trade shall make Capital Contributions (up to a maximum of $250,000) to
fund any excess of the Company’s operating expenses in excess of the Management
Fee. E*Trade’s Percentage Interest shall not be increased as a result of such
Capital Contributions.

        5.2.  Liability of the Members.

              (a)  Except as expressly set forth herein, or as otherwise
required by law, no Member shall be liable for any debts or obligations of the
Company.

              (b)  Each Member acknowledges the obligation of the Company
pursuant to the Limited Partnership Agreement of the Fund to contribute to the
capital of the Fund cash or Securities to satisfy the Company’s “clawback”
obligation to the Fund. Each Member agrees that, in the event the Company is
required to make a “clawback” payment pursuant to the Limited Partnership
Agreement of the Fund, he or she will return any or all distributions made to
him or her pursuant to this Agreement attributable to the Company’s carried
interest in the Fund as may be required to satisfy such obligation, with each
Member being severally (but not jointly) liable, in proportion to their
respective shares in such distributions.

        5.3.  Liability of Transferees. For purposes of this Agreement, any
transferee of an interest in the Company, whether or not admitted as a
substitute Member or treated as a transferee or successor in interest who has
not been admitted as a substitute Member (an “Assignee”) hereunder, shall be
treated as having contributed the amounts contributed to the Company by the
transferor, as having received distributions made to the transferor, and as
having been allocated any Net Income or Net Loss allocated to the transferor of
the interest in the Company held by the transferee. In addition, the transferee
shall be liable for the transferor’s liability for future contributions to the
Company. Notwithstanding the above, the transfer of an interest shall not
relieve the transferor from any liability hereunder except to the extent that
the transferee has actually made all contributions or payments required of the
tran sferor.

        5.4.  Defaulting Members.

              (a)  If a Non-Managing Member fails to pay any amount which it is
required to pay to the Company on or before the date when such amount is due and
payable, such Non-Managing Member shall be deemed to be in default hereunder (a
“Defaulting Member”), and written notice of default shall be given to such
Non-Managing Member by the Managing Members. The Company shall be entitled to
enforce the obligations of each Non-Managing Member to make the contributions to
capital specified in this Agreement, and the Company shall have all remedies
available at law or in equity in the event any such contribution is not so made.
In the event of any legal proceedings relating to a default by a Defaulting
Member, such Defaulting Member shall pay all costs and expenses incurred by the
Company, including attorneys’ fees, if the Company shall prevail. Further, such
Defaulting Member shall be obligated to pay the Company interest with respect to
the amount of any capital contribution not

6

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

made when required by this Agreement, with such interest commencing on the date
such contribution is initially due and ending on the date such contribution is
made to the Company. Such interest shall be calculated on the basis of the then
current reference rate announced by Wells Fargo Bank, N.A., or by any other U.S.
commercial bank with capital in excess of Five Hundred Million Dollars
($500,000,000) selected by the Managing Members, plus two percent (2%) per
annum.

              (b)  In addition to the remedies provided under Paragraph 5.4(a),
if the Defaulting Member does not remedy a default in the payment of a required
contribution within ten (10) business days of the receipt of the notice
specified in Paragraph 5.4(a): (i) the Defaulting Member shall no longer have
the right (if any) to vote on any Company matter, and (ii) if the Managing
Members so elect, the other Members shall have the option to pay the remaining
capital contributions of the Defaulting Member in accordance with any procedures
and in such proportions as may be established by the Managing Members. In such
event, such Defaulting Member shall be deemed to have withdrawn from the Company
and to have forfeited its interest in the Net Income and Net Losses of the
Company. Such Defaulting Member shall be entitled to receive only the amount of
its Capital Account at the time of the def ault, with such amount payable,
without interest, to the Defaulting Member upon the dissolution of the Company.

ARTICLE VI
CAPITAL ACCOUNTS AND ALLOCATIONS

        6.1.  Capital Accounts. A Capital Account shall be maintained on the
Company’s books for each Member. In the event any interest in the Company is
transferred in accordance with the terms of this Agreement, the transferee shall
succeed to the Capital Account of the transferor to the extent it relates to the
transferred interest.

        6.2.  Definitions. Unless the context requires otherwise, the following
terms have the meanings specified below for purposes of this Agreement:

              (a)  Book Value. The Book Value with respect to any asset shall be
the asset’s adjusted basis for federal income tax purposes, except as follows:

        (1)  The initial Book Value of any asset contributed by a Member to the
Company shall be the fair market value of such asset at the time of
contribution, as determined by the contributing Member and the Company.

        (2)  In the discretion of the Managing Members, the Book Values of all
Company assets may be adjusted to equal their respective fair market values, as
determined by the Managing Members, and the amount of such adjustment shall be
treated as Net Income or Net Loss and allocated to the Capital Accounts of the
Members, as of the following times: (A) the acquisition of an additional
interest in the Company by any new or existing Member in exchange for more than
a de minimis capital contribution; and (B) the distribution by the Company to a
Member of more than a de minimis amount of Company assets in connection with an
adjustment of such Member’s interest in the Company.

        (3)  The Book Values of all Company assets shall be adjusted to equal
their respective fair market values, as determined by the Managing Members, and
the amount of such adjustment shall be treated as Net Income or Net Loss and
allocated to the Capital Accounts of the Members, as of the following times:
(A) the date the Company is liquidated within the meaning of Treasury Regulation
Section 1.704-1(b)(2)(ii)(g); and (B)  the termination of the Company pursuant
to the provisions of this Agreement.

        (4)  The Book Values of the Company’s assets shall be increased or
decreased to the extent required under Treasury Regulation Section
1.704-1(b)(2)(iv)(m) in the event that the adjusted tax basis of the Company’s
assets is adjusted pursuant to Code Section 732, 734 or 743.

        (5)  The Book Value of a Company asset shall be adjusted by the
depreciation, amortization or other cost recovery deductions, if any, taken into
account by the Company with respect to such asset in computing Net Income or Net
Loss.

7

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

              (b)  Capital Account. An account maintained by the Company with
respect to each Member in accordance with the following provisions:

        The Capital Account of each Member shall be increased by:

        (1)  the amount of money and the fair market value of any property
contributed to the Company by such Member (in the case of a contribution of
property, net of any liabilities secured by such property that the Company is
considered to assume or hold subject to for purposes of Section 752 of the
Code),

        (2)  such Member’s share of Net Income (or items thereof) allocated to
his Capital Account pursuant to this Agreement, and

        (3)  any other amounts required by Treasury Regulation
Section 1.704-1(b), provided the Managing Member determines that such increase
is consistent with the economic arrangement among the Members as expressed in
this Agreement.

        and shall be decreased by:

        (A)  the amount of money and the fair market value of any property
distributed by the Company (determined pursuant to Paragraph 12.2 hereof as of
the date of distribution) to such Member pursuant to the provisions of this
Agreement (net of any liabilities secured by such property that such Member is
considered to assume or hold subject to for purposes of Section 752 of the
Code),

        (B)  such Member’s share of or Net Loss (or items thereof) allocated to
his Capital Account pursuant to this Agreement, and

        (C)  any other amounts required by Treasury Regulation
Section 1.704-1(b), provided the Managing Member determines that such decrease
is consistent with the economic arrangement among the Members as expressed in
this Agreement.

              (c)  Fiscal Quarter. The Fiscal Quarters of the Company shall
begin on January l, April 1, July 1 and October 1, and end on March 31, June 30,
September 30 and December 31, respectively, except that the Company’s first
Fiscal Quarter shall begin on the date of this Agreement and end on the next
regular quarterend.

              (d)  Fiscal Year. The Company’s first Fiscal Year shall begin on
the date of this Agreement and end on December 31, 2000. Thereafter, the
Company’s Fiscal Year shall commence on January 1 of each year and end on
December 31 of such year or, if earlier, the date the Company terminated during
such year. The Managing Members may at any time elect a different Fiscal Year if
permitted by the Code and the applicable Treasury Regulations.

              (e)  Net Income and Net Loss. The net book income or loss of the
Company for any relevant period, as computed in accordance with federal income
tax principles and as adjusted pursuant to the following provisions, under the
method of accounting elected by the Company for federal income tax purposes. The
Net Income or Loss of the Company shall be computed, inter alia, by:

        (1)  including as income or deductions, as appropriate, any tax-exempt
income and related expenses that are neither properly included in the
computation of taxable income nor capitalized for federal income tax purposes;

        (2)  including as a deduction when paid or incurred (depending on the
Company’s method of accounting) any amounts utilized to organize the Company or
to promote the sale of (or to sell) an interest in the Company, except that
amounts for which an election is properly made by the Company under
Section 709(b) of the Code shall be accounted for as provided therein;

        (3)  including as a deduction any losses incurred by the Company in
connection with the sale or exchange of property notwithstanding that such
losses may be disallowed to the Company for federal income tax purposes under
the related party rules of Code Section 267(a)(1) or 707(b); and

8

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

        (4)  calculating the gain or loss on disposition of Company assets and
the depreciation, amortization or other cost recovery deductions, if any, with
respect to the Company’s assets by reference to their Book Value rather than
their adjusted tax basis.

              (f)  Percentage Interest. The Percentage Interest for each Member
shall generally be as set forth on Exhibit A, as it may be amended from time to
time. The sum of the Members’ Percentage Interests shall be one hundred
percent (100%).

              (g)  Sale or Exchange. A sale, exchange, liquidation or similar
transaction, event or condition with respect to any assets (except realizations
of purchase discounts on commercial paper, certificates of deposit or other
money-market instruments) of the Company of the type that would cause any
realized gain or loss to be recognized for income tax purposes under the Code
(as determined without giving effect to the related party rules of Code
Sections 267(a)(1) and 707(b)).

        6.3.  Allocation of Net Income or Loss.

              (a)  All Net Income or Loss of the Company attributable to the
Company’s investment in the Fund shall be allocated among the Members in
proportion to their Capital Contributions used to fund such investment.

              (b)  All Net Income or Loss attributable to the Company’s Carry
shall be allocated among the Members in proportion to their Percentage
Interests; provided that the Managing Members may, in their discretion,
determine to allocate up to twenty percent (20%) of E*Trade’s allocable share of
the Net Income attributable to the Carry realized in a particular year to other
Members. The Managing Members shall make any determination to make such an
allocation within two (2) months after the end of each Fiscal Year.

              (c)  Any Net Income attributable to the Company’s operations shall
be allocated among the Members previously allocated any cumulative Net Loss
attributable to the Company’s operations in the reverse order of, and in
proportion to, such previous allocations, with any such remaining Net Income
being allocated entirely to E*Trade. Any Net Loss attributable to the Company’s
operations shall be allocated entirely to E*Trade to the extent of the sum of
any cumulative Net Income previously allocated to E*Trade and any Capital
Contributions made by E*Trade to fund such Net Losses pursuant to
Paragraph 5.1(c), with any such remaining Net Loss being allocated among the
Members in proportion to their Capital Contributions (other than pursuant to
Paragraph 5.1(c)). For this purpose, Net Income or Loss attributable to the
Company’s operations shall mean the Management Fee received by the Company
reduced by all expenses of the Company other than expenses directly attributable
to the Company’s investment in the Fund or the Company’s Carry, as determined by
the Managing Members, in their discretion. Notwithstanding the foregoing, if
there is a change in control of E*Trade, the Managing Members may, in their
discretion, allocate any Net Income attributable to the Company’s operations
among the Members in the manner they deem appropriate.

ARTICLE VII
EXPENSES

             The Company will pay all costs and expenses incurred in connection
with its activities. The Members shall be entitled to reimbursement by the
Company for expenses incurred by them relating to the Company’s business, as
determined by the Managing Members in their discretion.

ARTICLE VIII
DISTRIBUTIONS

        8.1.  Interest. No interest shall be paid to any Member on account of
his interest in the capital of, or on account of his investment in, the Company.

        8.2.  Mandatory Distributions. Promptly upon receipt of any tax
distributions from the Fund, the Managing Members shall distribute such tax
distributions to the Members in proportion to their interests in the taxable
income of the Company for the period to which such distributions relate.

        8.3.  Discretionary Distributions. The Managing Members may in their
discretion make additional distributions of cash or Securities among the Members
(not including any Defaulting Members).

9

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

              (a)  The distribution pursuant to this Paragraph 8.3 shall be made
among the Members as follows (with the source of a particular distribution being
in the discretion of the Managing Members):

        (1)  To E*Trade or other Members allocated Net Income pursuant to
Paragraph 6.3(c), to the extent of and in proportion to their respective shares
of the cumulative amount of such undistributed Net Income allocated to them, to
the extent attributable to any excess of the Management Fee received over the
Company’s operating expenses (taking into account as current or projected
expenses any payments of compensation to the Managing Members for their
management of the Company if they are no longer employed by E*Trade).

        (2)  Among the Members in proportion to their respective shares of the
cumulative amount of undistributed Net Income attributable to the Company’s
Carry to the extent made from such undistributed Net Income.

        (3)  Among the Members in proportion to their respective shares of the
cumulative amount of undistributed Net Income attributable to the Company’s
investment in the Fund to the extent made from such undistributed Net Income.

        (4)  Among the Members in proportion to their Capital Contributions to
the extent constituting a return of capital.

              (b)  Immediately prior to any distribution in kind of Securities
(or other assets) pursuant to any provision of this Agreement, the difference
between the fair market value and the Book Value of any Securities (or other
assets) distributed shall be allocated to the Capital Accounts of the Members as
Net Income or Net Loss pursuant to Article VI.

              (c)  Securities distributed in kind pursuant to this Paragraph 8.3
shall be subject to such conditions and restrictions as the Managing Members
determine are legally required.

ARTICLE IX
ASSIGNMENT OR TRANSFER OF MEMBERS’ INTERESTS

        9.1.  Restrictions on Transfer of Members’ Interests. No Member may
sell, assign, pledge, mortgage or otherwise dispose of all or any portion of his
interest in the Company without the consent of the Managing Members.

        9.2.  Opinion of Counsel. Notwithstanding any other provision of this
Agreement, no transfer or other disposition of an interest in the Company shall
be permitted until the Managing Members shall have received, or waived receipt
of, an opinion of counsel reasonably satisfactory to them that the effect of
such transfer or disposition would not:

              (a)  result in a violation of the Securities Act;

              (b)  require the Company to register as an investment company
under the Investment Company Act of 1940, as amended;

              (c)  require the Company or the Fund to register as an investment
adviser under the Investment Advisers Act of 1940, as amended;

              (d)  result in a termination of the Company for tax purposes, if
such termination would have a material adverse effect on the Members;

              (e)  result in a violation of any law, rule or regulation by the
Members or the Company;

              (f)  cause the Company to be characterized as a “publicly traded
partnership” (within the meaning set forth in Sections 512, 7704(b) and 469(k)
of the Code) or materially increase the risk that the Company will be so
characterized.

             Such legal opinion shall be provided to the Managing Members by the
Company’s counsel. All costs associated with such opinion shall be borne by the
transferring Member.

10

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

        9.3.  Violation of Restrictions. In the event of any purported transfer
or other disposition of any Member’s interest in the Company in violation of the
provisions of this Article IX, without limiting any other rights of the Company,
the Managing Members shall have the option, in their sole discretion, to treat
the Member as having withdrawn from the Company and to purchase or cause the
Company to purchase such Member’s interest for cash at a price equal to the
value thereof determined by the Managing Members as of a date selected by them.
In the event of purchase, the terminated Member’s and the remaining Members’
interests in the Company shall be appropriately adjusted, and the subject Member
(and his purported transferee) shall have no further interest in the Company
except to receive the purchase price, if any, for his interest as determined by
the Managing Members. Such option must be exercis ed, if at all, by written
notice to the affected Member (or his successor(s) in interest) given not later
than ninety (90) days after the Managing Members are advised in writing of the
purported transfer or disposition, and the purchase or withdrawal shall be
consummated on the date specified in such notice, which shall not be later than
sixty (60) days after it is given.

        9.4.  Agreement Not to Transfer. Each of the Members agrees with all
other Members that he, she or it will not make any disposition of his, her or
its interest in the Company, except as permitted by the provisions of this
Article IX.

        9.5.  Multiple Ownership. In the event of any disposition which shall
result in multiple ownership of any Member’s interest in the Company, the
Managing Members may require one or more trustees or nominees to be designated
to represent a portion of or the entire interest transferred for the purpose of
receiving all notices which may be given and all payments which may be made
under this Agreement and for the purpose of exercising all rights which the
transferor as a Member had pursuant to the provisions of this Agreement.

        9.6.  Substitute Members. No transferee of a Member’s interest may be
admitted to the Company as a substitute Member without the consent of the
Managing Members, which consent shall be subject to the sole discretion of the
Managing Members and shall not be subject to challenge by any transferor or
transferee.

ARTICLE X
VESTING OF PERCENTAGE INTERESTS

        10.1.  Vesting of Managing Members’ and E*Trade’s Interests. The
Managing Members’ and E*Trade’s interests in the Company shall be one hundred
percent (100%) vested as of the date hereof.

        10.2.  Vesting of Other Non-Managing Members’ and Additional Members’
Interests. The interest in the Company of any Non-Managing Member (other than
E*Trade) and of any Additional Member shall vest in accordance with a vesting
schedule (if any) established by the Managing Members for such other
Non-Managing Member or Additional Member. Any amounts allocated Non-Managing
Members or Additional Members that, for any reason, do not vest shall revert to
the Members whose interest in such amounts were diluted by the original
allocation of such amounts to such Non-Managing Member or Additional Member.

ARTICLE XI
DISSOLUTION AND LIQUIDATION OF THE COMPANY

        11.1.  Liquidation Procedures. Upon termination of the Company in
accordance with Article II:

              (a)  The affairs of the Company shall be wound up and the Company
shall be dissolved. The Managing Members shall serve as the liquidators.

              (b)  Distributions in dissolution may be made in cash or in kind
or partly in cash and partly in kind.

              (c)  The Managing Members shall use their best judgment as to the
most advantageous time for the Company to sell investments or to make
distributions in kind provided that any such sales shall be made as promptly as
is consistent with obtaining the fair value thereof.

              (d)  The proceeds of dissolution shall be applied to payment of
liabilities of the Company and distributed to the Members in the following
order:

        (1)  to the creditors of the Company in the order of priority
established by law;

11

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

        (2)  to the Members, in respect of the positive balances in their
Capital Accounts, after all Net Income or Net Loss arising upon the liquidation
(including amounts arising in connection with a distribution of Securities) has
been allocated among the Members.

ARTICLE XII
FINANCIAL ACCOUNTING AND REPORTS

        12.1.  Tax Accounting and Reports. The Managing Members shall cause the
Company’s tax return and IRS Form 1065, Schedule K-1, to be prepared and
delivered in a timely manner to the Non-Managing Members (but in no event later
than ninety (90) days after the close of each of the Company’s Fiscal Years).

        12.2.  Valuation of Securities and Other Assets Owned by the Company.

              (a)  Subject to the specific standards set forth below, the
valuation of Securities and other assets and liabilities under this Agreement
shall be at fair market value. In determining the value of the interest of any
Member or in any accounting between the Members, no value shall be placed on the
goodwill or the name of the Company. Upon dissolution of the Company, the
Company’s name and any goodwill associated with the name shall be distributed to
E*Trade.

              (b)  The following criteria shall be used for determining the fair
market value of Securities.

        (1)  Securities not subject to investment letter or other similar
restrictions on free marketability:

              (A)  If traded on one (1) or more securities exchanges or traded
on NASDAQ, the value of each Security shall be deemed to be the Security’s
closing price as reported in the Wall Street Journal or another nationally
recognized publication or service that reports such data for the valuation date.

              (B)  If actively traded over-the-counter (but not on NASDAQ), the
value shall be deemed to be the closing bid price of such Security on the
valuation date.

              (C)  If there is no active public market, the Managing Members
shall make a determination of the fair market value on the valuation date,
taking into consideration developments concerning the issuing company subsequent
to the acquisition of its Securities, the pricing of other private placements of
Securities by the issuer, the price of the Securities of other companies
comparable to the issuer, any financial data and projections of the issuing
company provided to the Managing Members and such other factor or factors as the
Managing Members may deem relevant.

        (2)  In the case of Securities subject to legal or contractual
restrictions on free marketability, appropriate adjustments to the value
determined under Paragraph 12.2(b)(1) above shall be made to reflect the effect
of the restrictions on transfer.

        (3)  The value of the Company’s interest in the Fund shall be the fair
market value of the Company’s interest in the Securities (and other assets) of
the Fund.

        (4)  If the Managing Members in good faith determine that, because of
special circumstances, the valuation methods set forth in this Paragraph 12.2 do
not fairly determine the value of a Security, the Managing Members shall make
such adjustments or use such alternative valuation method as they deem
appropriate.

        12.3.  Supervision; Inspection of Books. Proper and complete books of
account of the affairs of the Company shall be kept under the supervision of the
Managing Members at the principal office of the Company. Such books shall be
open to inspection by a Non-Managing Member, at any reasonable time, upon
reasonable notice, during normal business hours.

        12.4.  Confidentiality. All information provided to Non-Managing Members
under this Article XII shall be used by Non-Managing Members in furtherance of
their interests as Non-Managing Members and, subject to

12

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

disclosures required by applicable law, each Non-Managing Member hereby agrees
to maintain the confidentiality of such financial statements and other
information provided to Non-Managing Members hereunder.

ARTICLE XIII
OTHER PROVISIONS

        13.1.  Execution and Filing of Documents. The Managing Members shall
execute and file a Certificate conforming to the requirements of the Act in the
office of the Secretary of State for the State of Delaware and shall execute a
fictitious business name statement and file or cause such statement to be filed
if required by Delaware law.

        13.2.  Other Instruments and Acts. The Members agree to execute any
other instruments or perform any other acts that are or may be necessary to
effectuate and carry on the Company.

        13.3.  Binding Agreement. This Agreement shall be binding upon the
transferees, successors, assigns and legal representatives of the Members.

        13.4.  Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Delaware as applied to agreements among Delaware
residents made and to be performed entirely within Delaware.

        13.5.  Notices. Any notice or other communication that a Member desires
to give to another Member shall be in writing and shall be deemed effectively
given upon personal delivery or upon deposit in any United States mail box, by
registered or certified mail, postage prepaid, or upon transmission by telegram
or telecopy, addressed to the other Member at the address shown in the exhibits
attached to this Agreement or at such other address as a Member may designate by
fifteen (15) days’ advance written notice to the other Members.

        13.6.  Power of Attorney. By signing this Agreement, each Non-Managing
Member designates and appoints each of the Managing Members as its true and
lawful attorney, in its name, place and stead to make, execute, sign and file
such instruments, documents or certificates that may from time to time be
required of the Company by the laws of the United States of America, the laws of
the State of Delaware or any other state in which the Company shall conduct its
investment activities in order to qualify or otherwise enable the Company to
conduct its affairs in such jurisdictions; provided, however, that in no event
shall the Managing Members be deemed to have the authority under this
Paragraph 13.6 to take any action that would result in any Non-Managing Member
losing the limitation on liability afforded hereunder.

        13.7.  Amendment Procedure. This Agreement (and any exhibits to this
Agreement) may be amended only with the written consent of the Managing Members.
No amendment shall, however, (i) enlarge the obligations of any Member under
this Agreement without the written consent of such Member, (ii) dilute the
relative interest of any Member in the Net Income, Net Loss, distributions or
capital of the Company without the written consent of such Member (except such
dilution as may result from additional capital contributions from the Members or
the admission of Additional Members as specifically permitted pursuant to this
Agreement or as a result of a termination or withdrawal of a Non-Managing
Member), or (iii) alter or waive the terms of this Paragraph 13.7 or
Paragraphs 13.14 and 13.17. The Managing Members shall promptly furnish copies
of any amendments to this Agreement and the Company’s Certificate to all
Members.

        13.8.  Effective Date. This Agreement shall be effective on the date set
forth in the first paragraph of this Agreement.

        13.9.  Entire Agreement. This Agreement constitutes the entire agreement
of the Members and supersedes all prior agreements between the Members with
respect to the Company.

        13.10.  Titles; Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and shall not be considered in the
interpretation of this Agreement.

        13.11.  Company Name. The Company shall have the exclusive ownership and
right to use the Company name (and any name under which the Company shall elect
to conduct its affairs) as long as the Company continues.

        13.12.  Exculpation. Neither the Managing Members nor their Affiliates
shall be liable to a Non-Managing Member or the Company for honest mistakes of
judgment, for action or inaction taken reasonably and in good faith for a
purpose that was reasonably believed to be in the best interests of the Company,
for losses

13

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

due to such mistakes, action or inaction, or to the negligence, dishonesty or
bad faith of any employee, broker or other agent of the Company, the Managing
Members or their Affiliates provided that such employee, broker or agent was
selected, engaged or retained and supervised with reasonable care, provided that
this Paragraph 13.12 shall not extend to any action which constitutes fraud,
willful misconduct or gross negligence. The Managing Members may consult with
counsel and accountants in respect of Company affairs and be fully protected and
justified in any action or inaction that is taken in accordance with the advice
or opinion of such counsel or accountants, provided that they shall have been
selected with reasonable care. Notwithstanding any of the foregoing to the
contrary, the provisions of this Paragraph 13.12 and of Paragraph 13.13 hereof
shall not be construed so as to relieve (or attempt to relieve) any person of
any liability by reason of recklessness or intention al wrongdoing or to the
extent (but only to the extent) that such liability may not be waived, modified
or limited under applicable law, but shall be construed so as to effectuate the
provisions of this Paragraph 13.12 and of Paragraph 13.13 to the fullest extent
permitted by law.

        13.13.  Indemnification. The Company agrees to indemnify, out of the
assets of the Company only, the Managing Members and their Affiliates (and their
agents), to the fullest extent permitted by law and to save and hold them
harmless from and in respect of all (a) reasonable fees, costs, and expenses
paid in connection with or resulting from any claim, action or demand against
the Managing Members, their Affiliates or any agent thereof, the Company or
their agents that arise out of or in any way relate to the Company, its
properties, business or affairs and (b) such claims, actions and demands and any
losses or damages resulting from such claims, actions and demands, including
amounts paid in settlement or compromise of any such claim, action or demand;
provided, however, that this indemnity shall not extend to conduct not
undertaken in good faith nor to any fraud, willful misconduct or gross
negligence. Any pers on receiving an advance with respect to expenses shall be
required to agree to return such advance to the Company in the event it is
subsequently determined that such person was not entitled to indemnification
hereunder. Any indemnified party shall promptly seek recovery under any other
indemnity or any insurance policies by which such indemnified party may be
indemnified or covered or from any portfolio company in which the Company has an
investment, as the case may be. No payment or advance may be made to any person
under this Paragraph13.13 to any person who may have a right to any other
indemnity (by insurance or otherwise) unless such person shall have agreed, to
the extent of any other recovery, to return such payments or advances to the
Company.

        13.14.  Limitation of Liability of Members. Except as otherwise
expressly provided herein or as required by Delaware law, no Member shall be
bound by, nor be personally liable for, the expenses, liabilities or obligations
of the Company in excess of the balance of such Member’s Capital Commitment to
the Company.

        13.15.  Arbitration. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled by arbitration in San
Francisco, California, in accordance with the rules, then obtaining, of the
American Arbitration Association. Any award shall be final, binding and
conclusive upon the parties. A judgment upon the award rendered may be entered
in any court having jurisdiction thereof.

        13.16.  Tax Matters Partner. Thomas A. Bevilacqua shall be the Company’s
Tax Matters Partner under the Code (“TMP”). The TMP shall have the right to
resign by giving thirty (30) days’ written notice to the Members. Upon the
resignation, dissolution or Bankruptcy of the TMP, a successor TMP shall be
elected by a majority in interest of the other Members. The TMP shall employ
experienced tax counsel to represent the Company in connection with any audit or
investigation of the Company by the Internal Revenue Service (“IRS”) and in
connection with all subsequent administrative and judicial proceedings arising
out of such audit. The fees and expenses of such, and all expenses incurred by
the TMP in serving as the TMP, shall be Company expenses and shall be paid by
the Company. Notwithstanding the foregoing, it shall be the responsibility of
the Members, at their expense, to employ tax counsel to represent their
respective separate interests. If the TMP is required by law or regulation to
incur fees and expenses in connection with tax matters not affecting each of the
Members, then the TMP may, in his sole discretion, seek reimbursement from or
charge such fees and expenses to the Members on whose behalf such fees and
expenses were incurred. The TMP shall keep the Members informed of all
administrative and judicial proceedings, as required by Section 6223(g) of the
Code, and shall furnish a copy of each notice or other communication received by
the TMP from the IRS to each Member, except such notices or communications as
are sent directly to such Member by the IRS. The relationship of the TMP to the
Members is that of a fiduciary, and the TMP has a fiduciary obligation to
perform his duties as TMP in such manner as will serve the best interests of the
Company and all of the Company’s Members. To the fullest extent permitted by
law, the Company agrees to indemnify the TMP and his agents and save and hold
them harmless from and in respect to all (i) reasonable fees, costs and expenses
in connection with or resulting from any claim, action or demand against the
TMP, the Managing Members or the Company that arise out of or in any way relate
to the TMP’s status as TMP for

14

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

the Company, and (ii) all such claims, actions and demands and any losses or
damages therefrom, including amounts paid in settlement or compromise of any
such claim, action or demand; provided that this indemnity shall not extend to
conduct by the TMP adjudged (i) not to have been undertaken in good faith to
promote the best interests of the Company or (ii) to have constituted
recklessness or intentional wrongdoing by the TMP.

        13.17.  Taxation as Company. The Managing Members, while serving as
such, agree to use their best efforts to avoid taking any action that would
cause the Company to be classified as other than a partnership for federal
income tax purposes.

ARTICLE XIV
MISCELLANEOUS TAX COMPLIANCE PROVISIONS

        14.1.  Substantial Economic Effect. The provisions of this Agreement are
intended to comply generally with the provisions of Treasury Regulation
Section1.704-1, and shall be interpreted and applied in a manner consistent with
such Regulations; and, to the extent the subject matter thereof is otherwise not
addressed by this Agreement, the provisions of Treasury Regulations
Section 1.704-1 are hereby incorporated by reference unless the Managing Members
shall determine that such incorporation will result in economic consequences
inconsistent with the economic arrangement among the Members as expressed in
this Agreement. In the event the Managing Members shall determine that it is
prudent to modify the manner in which the Capital Accounts, or any debits or
credits thereto, are computed or allocated or the manner in which distributions
and contributions upon liquidation (or otherwise) of the Company (or any
Member’s interest therein) are effected in order to comply with such Regulations
and other applicable tax laws, or to assure that the Company is treated as a
partnership for tax purposes, or to achieve the economic arrangement of the
Members as expressed in this Agreement, then, notwithstanding anything in this
Agreement to the contrary, the Managing Members may make such modification,
provided that it is not likely to have a material detrimental effect on the tax
consequences and total amounts distributable to any Non-Managing Member pursuant
to Articles VIII and XI as applied without giving effect to such modification.
The Managing Members shall also (i) make any adjustments that are necessary or
appropriate to maintain equality between the Capital Accounts of the Members and
the amount of Company capital reflected on the Company’s balance sheet, as
computed for book purposes pursuant to this Agreement, in accordance with
Regulations Section 1.704-1(b)(2)(iv)(g), and (ii) make any appropriate m
odifications in the event unanticipated events (such as the incurrence of
nonrecourse indebtedness) might otherwise cause the allocations under this
Agreement not to comply with Treasury Regulations Section 1.704, provided in
each case that the Managing Members determine that such adjustments or
modifications shall not result in economic consequences inconsistent with the
economic arrangement among the Members as expressed in this Agreement.

        14.2.  Income Tax Allocations.

              (a)  Except as otherwise provided in this paragraph or as
otherwise required by the Code and the rules and Treasury Regulations
promulgated thereunder, income, gain, loss, deduction, or credit of the Company
for income tax purposes shall be allocated in the same manner the corresponding
book items are allocated pursuant to this Agreement.

              (b)  In accordance with Code Section 704(c) and the Treasury
Regulations thereunder, income, gain, loss and deduction with respect to any
asset contributed to the capital of the Company shall, solely for tax purposes,
be allocated between the Members so as to take account of any variation between
the adjusted basis of such property to the Company for federal income tax
purposes and its initial Book Value.

              (c)  In the event the Book Value of any Company asset is adjusted
pursuant to the terms of this Agreement, subsequent allocations of income, gain,
loss and deduction with respect to such asset shall take account of any
variation between the adjusted basis of such asset for federal income tax
purposes and its Book Value in the same manner as under Code Section 704(c) and
the Treasury Regulations thereunder.

        14.3.  Withholding. The Company shall at all times be entitled to make
payments with respect to any Member in amounts required to discharge any
obligation of the Company to withhold or make payments to any governmental
authority with respect to any federal, state, local or other jurisdictional tax
liability of such Member arising as a result of such Member’s interest in the
Company. Any such withholding payment shall be charged to the Member’s Capital
Account.

[The remainder of this page is intentionally left blank.]

      

15

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

             IN WITNESS WHEREOF, the Members have executed this Agreement as of
the date first above written.

 
  
MANAGING MEMBERS

 
  

/s/  Christos M. Cotsakos

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

 
  
Christos M. Cotsakos

 
  

 
  

/s/  Thomas A. Bevilacqua

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

 
  
Thomas A. Bevilacqua

 
  
NON-MANAGING MEMBER

E*Trade Group, Inc.

 
By:  

/s/  Leonard C. Purkis

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

 
Title:  
Leonard C. Purkis
Chief Financial Officer

      

16

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

EXHIBIT A

MEMBERS’ CAPITAL COMMITMENTS
AND PERCENTAGE INTERESTS

Name/Address Capital Commitment Percentage Interest

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

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

Managing Members:                             Christos M. Cotsakos   $ 250,000  
  25 % Thomas A. Bevilacqua     250,000     25 %               Non-Managing
Members:                             E*Trade Group, Inc.     320,000     32 %(1)
Anticipated Additional Non-Managing Members (Aggregate)(2)     180,000     18 %

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

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

                $ 1,000,000     100 %

______________

         (1)   Subject to reduction (but not below 25.6%) with respect to the
allocation of the Company’s Carry, as described in Section 6.3(b) of the
Agreement.

         (2)   The aggregate Capital Commitments and Percentage Interests of the
Additional Members are based on the anticipated admission of such Additional
Members. Any Percentage Interests that remain unallocated to Additional Members
for any reason shall be allocated to the Managing Members (to be shared equally
between them), and the corresponding Capital Commitment obligation shall become
an obligation of the Managing Members (such obligation being shared equally
between them).

      

      

      A-1