Document:

<PAGE>

                                                                    EXHIBIT 10.5

                                                                  Execution Copy

                            E*Trade Ventures I, LLC
                     A Delaware Limited Liability Company

                           LIMITED LIABILITY COMPANY
                              OPERATING AGREEMENT

                              September 23, 1999
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                   Page
                                                                                                                   ----
<S>                                                                                                                <C>
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...................................................................    4

         2.1.     Term...........................................................................................    4
         2.2.     Termination....................................................................................    4
         2.3.     Extension of Term..............................................................................    4

ARTICLE III INITIAL MEMBERS; CHANGES IN MEMBERSHIP...............................................................    4

         3.1.     Name and Address...............................................................................    4
         3.2.     Admission of Additional Members................................................................    5
         3.3.     Death, Disability or Withdrawal of a Managing Member...........................................    5
         3.4.     Withdrawal of a Member.........................................................................    5

ARTICLE IV MANAGEMENT, DUTIES AND RESTRICTIONS...................................................................    6

         4.1.     Management.....................................................................................    6
         4.2.     Conversion of Status as Managing Member........................................................    7
         4.3.     Liability of Members to the Company and the Other Members......................................    7
         4.4.     Restrictions on the Members....................................................................    7
         4.5.     Additional Restrictions on Non-Managing Members................................................    7
         4.6.     Officers.......................................................................................    8

ARTICLE V CAPITAL CONTRIBUTIONS..................................................................................    8

         5.1.     Capital Commitments and Membership Interests of the Members....................................    8
         5.2.     Liability of the Members.......................................................................    8
         5.3.     Liability of Transferees.......................................................................    9
         5.4.     Defaulting Members.............................................................................    9

ARTICLE VI CAPITAL ACCOUNTS AND ALLOCATIONS......................................................................   10

         6.1.     Capital Accounts...............................................................................   10
         6.2.     Definitions....................................................................................   10
         6.3.     Allocation of Net Income or Loss...............................................................   12
</TABLE>

                                      i.
<PAGE>

<TABLE>
<S>                                                                                                                <C>
ARTICLE VII EXPENSES............................................................................................   13

ARTICLE VIII DISTRIBUTIONS......................................................................................   13

         8.1.     Interest......................................................................................   13
         8.2.     Mandatory Distributions.......................................................................   13
         8.3.     Discretionary Distributions...................................................................   13

ARTICLE IX ASSIGNMENT OR TRANSFER OF MEMBERS' INTERESTS.........................................................   14

         9.1.     Restrictions on Transfer of Members' Interests................................................   14
         9.2.     Opinion of Counsel............................................................................   14
         9.3.     Violation of Restrictions.....................................................................   15
         9.4.     Agreement Not to Transfer.....................................................................   15
         9.5.     Multiple Ownership............................................................................   15
         9.6.     Substitute Members............................................................................   15

ARTICLE X VESTING OF PERCENTAGE INTERESTS.......................................................................   15

         10.1.    Vesting of Managing Members' and E*Trade's Interests..........................................   15
         10.2.    Vesting of Other Non-Managing Members' and Additional Members' Interests......................   16

ARTICLE XI DISSOLUTION AND LIQUIDATION OF THE COMPANY...........................................................   16

         11.1.    Liquidation Procedures........................................................................   16

ARTICLE XII FINANCIAL ACCOUNTING AND REPORTS....................................................................   16

         12.1.    Tax Accounting and Reports....................................................................   16
         12.2.    Valuation of Securities and Other Assets Owned by the Company.................................   17
         12.3.    Supervision; Inspection of Books..............................................................   18
         12.4.    Confidentiality...............................................................................   18

ARTICLE XIII OTHER PROVISIONS...................................................................................   18

         13.1.    Execution and Filing of Documents.............................................................   18
         13.2.    Other Instruments and Acts....................................................................   18
         13.3.    Binding Agreement.............................................................................   18
         13.4.    Governing Law.................................................................................   18
         13.5.    Notices.......................................................................................   18
         13.6.    Power of Attorney.............................................................................   18
         13.7.    Amendment Procedure...........................................................................   19
         13.8.    Effective Date................................................................................   19
         13.9.    Entire Agreement..............................................................................   19
         13.10.   Titles; Subtitles.............................................................................   19
         13.11.   Company Name..................................................................................   19
         13.12.   Exculpation...................................................................................   19
         13.13.   Indemnification...............................................................................   19
         13.14.   Limitation of Liability of Members............................................................   20
</TABLE>

                                      ii.
<PAGE>

<TABLE>
<S>                                                                                                                <C>
         13.15.   Arbitration...................................................................................   20
         13.16.   Tax Matters Partner...........................................................................   20
         13.17.   Taxation as Company...........................................................................   21

ARTICLE XIV MISCELLANEOUS TAX COMPLIANCE PROVISIONS.............................................................   21

         14.1.    Substantial Economic Effect...................................................................   21
         14.2.    Income Tax Allocations........................................................................   22
         14.3.    Withholding...................................................................................   22
</TABLE>

EXHIBIT A         Members' Capital Commitments and Percentage Interests

                                     iii.
<PAGE>

                            E*Trade Ventures I, LLC
                     a Delaware Limited Liability Company

                              OPERATING AGREEMENT

          This Operating Agreement is entered into as of the 23rd day of
September, 1999, 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 I, 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, L.P. (the "Fund").
<PAGE>

               (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.

          1.4. 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 I,
                    ---------
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:
                    ----------

                                      2.
<PAGE>

                    (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 20% carried interest in the income of
                    -----
the Fund.

               (k)  Certificate.  The Certificate of Formation of E*Trade
                    -----------
Ventures I, 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).

                                      3.
<PAGE>

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

               (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.

                                      4.
<PAGE>

          3.2. Admission of Additional Members. Persons 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.

          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 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 Members 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

                                      5.
<PAGE>

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 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 agree-

                                      6.
<PAGE>

ments 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
foregoing 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

                                      7.
<PAGE>

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.

                                   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 resulting 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.

               (a)  In the event that the capital commitment of the Company to
the Fund is increased, the Capital Commitments of the Members shall be increased
in an amount, in the aggregate, equal to such increased obligation to the Fund.
Such aggregate increased commitment shall be shared between the Members in
proportion to their Capital Commitments.

               (b)  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. 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 Members' respective Capital Commitments.

               (c)  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.

                                      8.
<PAGE>

               (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
transferor.

          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 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

                                      9.
<PAGE>

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 default, 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.

                                      10.
<PAGE>

                    (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.

               (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, 1999. 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.

                                      11.
<PAGE>

               (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

                    (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, and shall generally be determined by dividing the amount of each Member's
Capital Commitment by the sum of the Capital Commitments of all of the Members
(except as otherwise specifically provided in this Agreement). 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 Percentage Interests.

               (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

                                      12.
<PAGE>

Managing Members may, in their discretion, determine to allocate up to 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 months after the end of each
Fiscal Year.

               (c)  All Net Income or Loss attributable to the Company's
operations shall be allocated entirely to E*Trade. 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.

                                  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).

               (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 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).

                                      13.
<PAGE>

                    (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;

                                      14.
<PAGE>

                (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.

          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 exercised, 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.

                                      15.
<PAGE>

          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;

                    (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).

                                      16.
<PAGE>

          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.

                                      17.
<PAGE>

          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
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.

                                      18.
<PAGE>

          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 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 intentional
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) reason-

                                      19.
<PAGE>

able 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 person 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 Paragraph 13.13 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

                                      20.
<PAGE>

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 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
Section 1.704-1, 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 modifications 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.

                                      21.
<PAGE>

          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.]

                                      22.
<PAGE>

          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/ THOMAS A. BEVILACQUA
                                                -------------------------------

                                             Title:____________________________

                                      23.
<PAGE>

                                   EXHIBIT A

                         MEMBERS' CAPITAL COMMITMENTS
                           AND PERCENTAGE INTERESTS

                                               Capital      Percentage
Name/Address                                 Commitment      Interest
----------------------------------------------------------------------------

Managing Members:

Christos M. Cotsakos                          $ 87,500          25%
Thomas A. Bevilacqua                            87,500          25%

Non-Managing Member:

E*Trade Group, Inc.                            175,000          50%*
                                              --------        ------
                                              $350,000         100%

____________________

  *  Subject to reduction (but not below 40%), with respect to the allocation of
     the Company's Carry, as described in Section 6.3(b) of the Agreement.

                                      A-1<PAGE>

                                                                    EXHIBIT 10.6

                                                                  Execution Copy

                         E*Trade eCommerce Fund, L.P.
                        A Delaware Limited Partnership

                             AMENDED AND RESTATED
                         LIMITED PARTNERSHIP AGREEMENT

                                 October 8, 1999
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                    Page
                                                                                                    ----
<S>                                                                                                 <C>
ARTICLE I NAME, PURPOSE AND PRINCIPAL OFFICE OF PARTNERSHIP;
     DEFINITIONS....................................................................................   1

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

ARTICLE II TERM AND TERMINATION OF THE PARTNERSHIP..................................................   9

     2.1.    Term of Partnership....................................................................   9
     2.2.    Termination............................................................................   9
     2.3.    Extension of Term......................................................................  10
     2.4.    Events Affecting a Member of the General Partner.......................................  10
     2.5.    Events Affecting a Limited Partner of the Partnership..................................  10

ARTICLE III CAPITAL CONTRIBUTIONS...................................................................  10

     3.1.    Capital Commitment of the Limited Partners.............................................  10
     3.2.    Capital Contributions by the Limited Partners..........................................  11
     3.3.    Capital Commitment of the General Partner..............................................  11
     3.4.    Capital Contributions of the General Partner...........................................  11
     3.5.    Defaulting Partners....................................................................  12

ARTICLE IV CAPITAL ACCOUNTS AND ALLOCATIONS.........................................................  13

     4.1.    Capital Accounts.......................................................................  13
     4.2.    Adjustments to Capital Accounts........................................................  13
     4.3.    Allocation of Capital Transaction Gain or Loss.........................................  14
     4.4.    Allocation of Net Income or Loss.......................................................  15
     4.5.    Reallocation of Losses.................................................................  15
     4.6.    Allocation Among Partners as a Group...................................................  15
     4.7.    Special Allocation Among Late-Entering Limited Partners of Organization
             and Operating Expenses.................................................................  15
     4.8.    Allocations and Distributions Attributable to Removed General Partner..................  16

ARTICLE V MANAGEMENT FEE; EXPENSES..................................................................  16

     5.1.    Entitlement to Management Fee..........................................................  16
     5.2.    Payment of Management Fee..............................................................  16
     5.3.    Payment of Expenses....................................................................  17
     5.4.    No Salaries to General Partner.........................................................  17
</TABLE>

                                       i
<PAGE>

<TABLE>
<S>                                                                                                 <C>
ARTICLE VI WITHDRAWALS BY AND DISTRIBUTIONS TO THE PARTNERS.........................................  17

     6.1.    Interest...............................................................................  17
     6.2.    Withdrawals by the Partners............................................................  18
     6.3.    Mandatory Cash Distributions...........................................................  18
     6.4.    Additional Distributions...............................................................  18

ARTICLE VII MANAGEMENT, DUTIES AND RESTRICTIONS.....................................................  19

     7.1.    Management by General Partner..........................................................  19
     7.2.    Indebtedness; Restrictions; Reinvestments..............................................  20
     7.3.    Investment Representation of the Limited Partners......................................  21
     7.4.    Accredited Investor Representation.....................................................  22
     7.5.    No Control by the Limited Partners; Rights of the Limited Partners.....................  22
     7.6.    Admission of Additional Partners.......................................................  23
     7.7.    Assignment or Transfer of Partnership Interests........................................  24
     7.8.    Investment Opportunities; Conflicts of Interest........................................  25

ARTICLE VIII DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIP.........................................  26

     8.1.    Liquidation Procedures.................................................................  26
     8.2.    Liability of General Partner to Return Excess Distributions............................  27
     8.3.    Liquidating Trust......................................................................  28

ARTICLE IX FINANCIAL ACCOUNTING AND REPORTS.........................................................  29

     9.1.    Financial and Tax Accounting and Reports...............................................  29
     9.2.    Valuation of Securities and Other Assets Owned by the Partnership......................  29
     9.3.    Supervision; Inspection of Books.......................................................  30
     9.4.    Quarterly Reports......................................................................  30
     9.5.    Confidentiality........................................................................  31

ARTICLE X OTHER PROVISIONS..........................................................................  31

     10.1.   Execution and Filing of Documents......................................................  31
     10.2.   Other Instruments and Acts.............................................................  31
     10.3.   Binding Agreement......................................................................  31
     10.4.   Governing Law..........................................................................  31
     10.5.   Notices................................................................................  31
     10.6.   Power of Attorney......................................................................  32
     10.7.   Amendment..............................................................................  32
     10.8.   Effective Date.........................................................................  32
     10.9.   Entire Agreement.......................................................................  32
     10.10.  Titles; Subtitles......................................................................  32
     10.11.  Partnership Name.......................................................................  33
     10.12.  Exculpation............................................................................  33
     10.13.  Indemnification........................................................................  33
     10.14.  Limitation of Liability of the Limited Partners........................................  33
     10.15.  Arbitration............................................................................  34
     10.16.  Tax Matters Partner....................................................................  34
</TABLE>

                                      ii
<PAGE>

<TABLE>
<S>                                                                                                 <C>
     10.17.  Taxation as Partnership................................................................  34
     10.18.  Deliveries of Opinions.................................................................  34

ARTICLE XI MISCELLANEOUS TAX COMPLIANCE PROVISIONS..................................................  35

     11.1.   Substantial Economic Effect............................................................  35
     11.2.   Other Allocations......................................................................  35
     11.3.   Income Tax Allocations.................................................................  36
     11.4.   Withholding............................................................................  37

EXHIBIT A      Partners' Capital Commitments; Partnership Percentages

EXHIBIT B      Securities Contributed by E*Trade
</TABLE>

                                      iii
<PAGE>

                         E*Trade eCommerce Fund, L.P.
                        a Delaware limited partnership

                             AMENDED AND RESTATED
                         LIMITED PARTNERSHIP AGREEMENT

          E*Trade Ventures I, LLC, a Delaware limited liability company (the
"General Partner"), as general partner, and E*Trade Group, Inc., Christos M.
 ---------------
Cotsakos and Thomas A. Bevilacqua, as limited partners, entered into a Limited
Partnership Agreement dated September 23, 1999. By their execution of this
Agreement, said original Partners hereby amend and restate that Limited
Partnership Agreement to read as provided herein.

          Each of the individuals, corporations and other entities whose names
are set forth under the heading "Limited Partners" on Exhibit A attached hereto
who execute a counterpart of this Agreement, as limited partners (the "Limited
                                                                       -------
Partners" and, together with the General Partner, the "Partners") hereby enter
--------
into this Amended and Restated Limited Partnership Agreement effective as of
October 8, 1999;

          The Partners, in consideration of their mutual covenants contained
herein, agree to carry on a limited partnership pursuant to the terms of this
Agreement and the Delaware Revised Uniform Limited Partnership Act (the
"Delaware Act").

                                   ARTICLE I
                               NAME, PURPOSE AND
                 PRINCIPAL OFFICE OF PARTNERSHIP; DEFINITIONS

          1.1. Partnership Name.  The name of the Partnership is "E*Trade
               ----------------
eCommerce Fund, L.P." The affairs of the Partnership shall be conducted under
such name or such other name as the General Partner may, in its discretion,
determine. The General Partner will provide prompt written notice to the Limited
Partners of any change in the name of the Partnership. E*Trade Group, Inc.
hereby grants the Partnership, at no cost, the right to use the "E*Trade" name
for the term of the Partnership.

          1.2. Partnership Purpose; Powers.
               ---------------------------

               (a)  Purpose.  The purpose of the Partnership is to (i) seek
                    -------
capital appreciation through the acquisition, holding, sale, distribution or
other disposition of investments in Portfolio Companies and (ii) engage in any
other lawful activities determined by the General Partner to be necessary or
advisable in connection with the foregoing.
<PAGE>

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

                    (1)  to purchase, sell, invest and dispose of 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 Partnership, including, without limitation, the purchase,
     sale, transfer, pledge and exercise of all rights, privileges and incidents
     of ownership or possession with respect to any Partnership asset or
     liability; 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 partnership under the Delaware Act.

          1.3. Registered Office and Agent.  The initial address of the
               ---------------------------
Partnership's registered office in Delaware is 15 East North Street, Dover,
County of Kent, and its initial agent at such address for service of process is
Incorporating Services Limited. The General Partner shall provide prompt written
notice to the Limited Partners of any change of the Partnership's registered
offices.

          1.4. Principal Office.  The principal office of the Partnership shall
               ----------------
initially be located at 4500 Bohannon Drive, Menlo Park, California 94025. The
General Partner may change the location of the principal office of the
Partnership at any time upon prompt written notice to the Limited Partners
indicating the new location of such principal office.

          1.5. Definitions.  As used in this Agreement, the following terms
               -----------
shall have the following meanings:

          Adjusted Capital Balance.  As of any date, the balance of the
          ------------------------
General Partner's Capital Account as of such date computed without regard to any
such balance created as a result of any interest as a Limited Partner held by
the General Partner.

          After-Tax Distribution Amount shall have the meaning set forth in
          -----------------------------
Paragraph 8.2.

          Agreement.  This Amended and Restated Limited Partnership Agreement of
          ---------
E*Trade eCommerce Fund, L.P., a Delaware limited partnership, as it may be
amended in accordance with the terms hereof.

          Bankruptcy.  A person or entity shall be deemed bankrupt if such
          ----------
person:

                    (1)  makes an assignment for the benefit of creditors;

                                      2.
<PAGE>

                    (2)  files a voluntary petition in bankruptcy;

                    (3)  is adjudicated as bankrupt or insolvent or has entered
     against such person an order for relief in any bankruptcy or insolvency
     proceeding;

                    (4)  files a petition or answer seeking for himself or
     itself any reorganization, arrangement, composition, readjustment,
     liquidation, dissolution or similar relief under any statute, law or
     regulation;

                    (5)  files an answer or other pleading admitting or failing
     to contest the material allegations of a petition filed against him or it
     in any proceeding of this nature; or

                    (6)  seeks, consents to or acquiesces in the appointment of
     a trustee, receiver or liquidator or of all or any substantial part of his
     or its properties.

          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 property other than money
     contributed by a Partner to the Partnership shall be the fair market value
     of such asset at the time of contribution, as determined by the
     contributing Partner and the Partnership The initial Book Value of the
     Securities contributed by E*Trade shall be as set forth on Exhibit B.

                    (2)  In the discretion of the General Partner, the Book
     Values of all Partnership assets may be adjusted to equal their respective
     fair market values, as determined by the General Partner consistent with
     the principles of Paragraph 9.2, and the amount of such adjustment shall be
     treated as Capital Transaction Gain or Loss and allocated to the Capital
     Accounts of the Partners pursuant to Paragraph 4.3, as of the following
     times: (A) the acquisition of an additional interest in the Partnership by
     any new or existing Partner (other than pursuant to Paragraph 7.6(b)) in
     exchange for more than a de minimis Capital Contribution; and (B) the
     distribution by the Partnership to a Partner of more than a de minimis
     amount of Partnership assets in connection with an adjustment of such
     Partner's Partnership Percentage.

                    (3)  The Book Values of all Partnership assets shall be
     adjusted to equal their respective fair market values, as determined by the
     General Partner consistent with the principles of Paragraph 9.2, and the
     amount of such adjustment shall be treated as Capital Transaction Gain or
     Loss and allocated to the Capital Accounts of the Partners pursuant to
     Paragraph 4.3, as of the following times: (A) the date the Partnership is
     liquidated within the meaning of Treasury Regulation Section 1.704-
     1(b)(2)(ii)(g); and (B) the termination of the Partnership pursuant to the
     provisions of this Agreement.

                    (4)  The Book Values of Partnership 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
     Partnership assets is adjusted pursuant to Code Section 732, 734 or 743.

                                      3.
<PAGE>

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

          Capital Commitment shall have the meaning set forth in Paragraph 3.1.
          ------------------

          Capital Transaction Gain or Loss.  An amount computed for any relevant
          --------------------------------
period, as of the last day thereof, that is equal to the total of (i) the
aggregate amount recognized on the Sale or Exchange of Securities or other
assets held by the Partnership during such period less the sum of (A) the Book
Value of such Securities or other assets as of the date of such Sale or
Exchange, plus (B) the Partnership's expenses associated with the Sale or
Exchange of such Securities or other assets; (ii) the Partnership's distributive
share of income, gain, loss, deduction or credit (or item thereof) derived from
its interest in partnerships, limited liability companies and other pass-through
entities to the extent such amounts would be Capital Transaction Gain or Loss if
realized directly by the Partnership; (iii) dividend income of the Partnership
during such period with respect to Securities of Portfolio Companies, whether
derived from actual or constructive distributions of cash or property; (iv)
interest (and original issue discount) income of the Partnership during such
period from Securities of Portfolio Companies; (v) the aggregate adjustment to
the Book Value of Partnership assets during such period computed under
subparagraphs (2), (3) and (4) of the definition "Book Value"; and (vi) any
other amount specifically designated as Capital Transaction Gain or Loss in this
Agreement, including (without limitation) such amounts so designated pursuant to
Paragraph 6.4(f).

          Capital Contributions means a Partner's capital contributions
          ---------------------
theretofore made to the Partnership at any point in time. For purposes of
Paragraph 6.4(b), the General Partner's Capital Contributions shall include
solely its Capital Contributions made with respect to its interest as General
Partner.

          Certificate of Limited Partnership.  The Certificate of Limited
          ----------------------------------
Partnership of E*Trade eCommerce Fund, L.P., a Delaware limited partnership,
filed with the Secretary of State of Delaware, as it may be amended in
accordance with the terms hereof.

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

          Defaulting Partner shall have the meaning set forth in Paragraph
          ------------------
3.5(a).

          Delaware Act means the Delaware Revised Uniform Limited Partnership
          ------------
Act.

          Drawdown shall have the meaning set forth in Paragraph 3.2.
          --------

          Drawdown Date shall have the meaning set forth in Paragraph 3.2.
          -------------

          Drawdown Notice shall have the meaning set forth in Paragraph 3.2.
          ---------------

          E*Trade.  E*Trade Group, Inc. a Delaware corporation.
          -------

          Excess Distribution Amount shall have the meaning set forth in
          --------------------------
Paragraph 8.2.

                                      4.
<PAGE>

          Excess Negative Balance shall have the meaning set forth in Paragraph
          -----------------------
11.2(e).

          Fair Value Capital Accounts means the Partners' Capital Accounts
          ---------------------------
computed in accordance with Article IV, but treating each security and each
other asset owned by the Partnership as if, on the date as of which such
computation is being made, such security or other asset had been sold as its
fair market value (determined in accordance with Paragraph 9.2) and any
resulting Capital Transaction Gain or Loss had been allocated to the Partners'
Capital Accounts in accordance with Article IV.

          Fair Value Test means that, with respect to each Limited Partner and
          ---------------
any proposed Partnership distribution, the sum of (i) the amount of the
cumulative distributions which such Limited Partner has received from the
Partnership, plus (ii) the amount of such Limited Partner's Fair Value Capital
Account, in each case after giving effect to the proposed distribution, is equal
to at least one hundred percent (100%) of such Limited Partner's Capital
Contributions.

          Final Closing Date shall have the meaning set forth in Paragraph
          ------------------
7.6(b).

          Fiscal Quarter.  The Fiscal Quarters of the Partnership shall begin on
          --------------
January 1, April 1, July 1, and October 1, and end on March 31, June 30,
September 30, and December 31, respectively, except that the Partnership's first
Fiscal Quarter shall begin on the date of this Agreement and end on the next
regular quarter end.

          Fiscal Year.  The Partnership's first Fiscal Year shall begin on the
          -----------
date of this Agreement and end on December 31, 1999. Thereafter, the
Partnership'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 Partnership terminated
during such year. The General Partner at any time may, in its discretion, elect
a different Fiscal Year. The General Partner shall provide prompt written notice
to the Limited Partners of any such election to change the Fiscal Year.

          Follow-On Investment.  An investment in the Securities of any existing
          --------------------
Portfolio Company in which the Partnership has previously made an investment.

          Foreign Entity shall have the meaning set forth in Paragraph 7.2(i).
          --------------

          General Partner.  E*Trade Ventures I, LLC.
          ---------------

          General Partner Distributions shall have the meaning set forth in
          -----------------------------
Paragraph 8.2(d).

          Insulated Limited Partner shall have the meaning set forth in
          -------------------------
Paragraph 7.5(b).

          Interim Period.  If a Partnership interest is transferred, the General
          --------------
Partner converts to a Limited Partner, the Partnership Percentage of any Partner
changes, a Partner withdraws or a new Partner is admitted to the Partnership
other than on the first day of any Fiscal Year, if the General Partner shall so
elect, the date of such event or election shall commence an Interim Period. An
Interim Period shall end on the last day of the Fiscal Year in which the

                                      5.
<PAGE>

Interim Period began or on the day immediately preceding the beginning of a new
Interim Period, whichever is earlier.

               Investment Period.  The period beginning as of the date of this
               -----------------
Agreement and ending December 31, 2005.

               Limited Liability Entity Opinion shall have the meaning set forth
               --------------------------------
in Paragraph 7.2(i).

               Limited Partners. Each of the persons listed under the heading
               ----------------
"Limited Partners" on Exhibit A attached hereto and each other person duly
admitted to the Partnership as a limited partner subsequent to the date hereof.

               Majority in Interest of the Limited Partners. Limited Partners
               --------------------------------------------
having Capital Contributions the sum of which is at least a majority of the
aggregate Capital Contributions of the Partners (excluding, for the purpose of
calculating such requisite percentage, the Capital Contributions of the General
Partner, including interests held by the General Partner as a Limited Partner).

               Management Fee shall have the meaning set forth in Paragraph 5.1.
               --------------

               Marketable Securities. Securities that are (i) actively traded on
               ---------------------
a national securities exchange or through the National Association of Securities
Dealers, Inc. Automated Quotation System and the aggregate total of all such
Securities then held by the Partnership would, if distributed in kind to the
Limited Partners, be freely transferable pursuant to SEC Rule 144 (without
regard to any volume limitations thereunder), an effective registration under
the Securities Act or an exemption therefrom, (ii) direct obligations of, or
obligations guaranteed as to principal and interest by, the United States, or
(iii) certificates of deposit maturing within one (1) year or less issued by an
institution insured by the Federal Deposit Insurance Corporation, or similar
securities.

               Media Company. An entity that, directly or indirectly, owns,
               -------------
controls or operates or has an attributable interest in (i) a U.S. broadcast
radio or television station or a U.S. cable television system, (ii) a "daily
newspaper" (as such term is defined in Section 73.3555 of the Federal
Communication Commission's ("FCC") rules and regulations), (iii) any U.S.
communications facility operated pursuant to a license granted by the FCC and
subject to the provisions of Section 310(b) of the Communications Act of 1934,
as amended, or (iv) any other business that is subject to FCC regulations under
which the ownership of the Partnership in such entity may be attributed to a
Limited Partner or under which the ownership of a Limited Partner in another
business may be subject to limitation or restriction as a result of the
ownership of the Partnership in such entity.

               Net Capital Gain. With respect to a Partner, the aggregate amount
               ----------------
of net taxable income and net taxable gain allocated to such Partner for federal
income tax purposes under this Agreement to the extent such allocations of
taxable income and gain are effected as a result of the allocation to the
Capital Account of such Partner under this Agreement of corresponding items of
Capital Transaction Gain (net of items of Capital Transaction Loss). In
calculating Net

                                       6.
<PAGE>

Capital Gain for any year, capital losses of the Partnership in prior years
shall be deemed to be carried over and to offset Net Capital Gain in later
years.

               Net Income and Net Loss. Except as otherwise specifically
               -----------------------
provided in this Agreement, the net book income or loss of the Partnership for
any relevant period computed without taking into account items comprising
Capital Transaction Gain or Loss. The net book income or loss of the Partnership
shall be computed in accordance with Federal income tax principles, as adjusted
pursuant to the following provisions, under the method of accounting elected by
the Partnership for federal income tax purposes. The net book income or loss of
the Partnership 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 Partnership's method of accounting) any amounts
         utilized to organize the Partnership or to promote the sale of (or to
         sell) an interest in the Partnership, except that amounts for which an
         election is properly made by the Partnership under Section 709(b) of
         the Code shall be accounted for as provided therein;

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

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

               Nonmarketable Securities. All Securities other than Marketable
               ------------------------
Securities.

               One-Third in Interest of the Limited Partners. Limited Partners
               ---------------------------------------------
having Capital Contributions the sum of which is at least one third of the
aggregate Capital Contributions of the Partners (excluding for the purpose of
calculating such requisite percentage, the Capital Contributions of the General
Partner, including interests held by the General Partner as a Limited Partner).

               Operating Expenses shall have the meaning set forth in Paragraph
               ------------------
4.6.

               Original Partners. Each of the persons listed as of the date
               -----------------
hereof as Limited Partners on Exhibit A attached hereto, and any transferee of
all or any portion of such Limited Partner's interest in the Partnership.

               Partners.  The General Partner and the Limited Partners.
               --------

                                      7.
<PAGE>

               Partnership.  E*Trade eCommerce Fund, L.P., the partnership
               -----------
formed pursuant to this Agreement.

               Partnership Percentage. The Partnership Percentage for each
               ----------------------
Partner shall be determined by dividing the amount of each Partner's Capital
Commitment by the sum of the Capital Commitments of all of the Partners. The sum
of the Partners' Partnership Percentages shall be one hundred percent (100%).
The aggregate Partnership Percentage of the Limited Partners as a group shall be
the sum of the Partnership Percentages of each of the Limited Partners as
limited partners.

               Payout means the time when each Limited Partner has received
               ------
cumulative distributions from the Partnership in an amount equal to its Capital
Commitment, as adjusted pursuant to any provision of this Agreement (less any
portion thereof which such Limited Partner has failed to pay the Partnership
when due or subsequently pursuant to Paragraph 3.5). In the event a distribution
of cash or Securities causes the Partnership to reach and exceed Payout, the
portion of the amount distributed which was necessary to reach Payout will be
deemed to have been distributed before Payout, and any remaining amount will be
deemed to have been distributed after Payout.

               Portfolio Company.  Any company in which the Partnership makes an
               -----------------
investment.

               Principals shall have the meaning set forth in Paragraph 7.8.
               ----------

               Reallocated Loss shall have the meaning set forth in Paragraph
               ----------------
4.4.

               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 Partnership 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)).

               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.

               Securities Act.  The Securities Act of 1933, as amended.
               --------------

               Shortfall Amount shall have the meaning set forth in Paragraph
               ----------------
3.5(d).

               Tax Distribution shall have the meaning set forth in Paragraph
               ----------------
6.3.

               Termination Date shall have the meaning set forth in Paragraph
               ----------------
2.3.

               TMP shall have the meaning set forth in Paragraph 10.16.
               ---

               Total Committed Capital shall have the meaning set forth in
               -----------------------
Paragraph 3.1.

                                      8.
<PAGE>

               Total General Partner Net Gain or Loss shall have the meaning set
               --------------------------------------
forth in Paragraph 8.2(c).

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

               Two-Thirds in Interest of the Limited Partners. Limited Partners
               ----------------------------------------------
having Capital Contributions the sum of which is at least sixty-six and two-
thirds percent (66-2/3%) of the aggregate Capital Contributions of the Partners
(excluding, for the purpose of calculating such requisite percentage, the
Capital Contributions of the General Partner, including interests held by the
General Partner as a Limited Partner).

               Two-Thirds Invested shall have the meaning set forth in Paragraph
               -------------------
7.8(b).

               Zero Balance Amount means, with respect to any Partner and at any
               -------------------
time, the amount of such Partner's Capital Commitment which such Partner has not
paid to the Partnership in cash on or before such time, and in addition, solely
with respect to the General Partner: the aggregate amount of distributions
received by the General Partner from the Partnership, but only to the extent
that such distributions exceed the aggregate amount of distributions the General
Partner would have received if it had made its Capital Contribution as a Limited
Partner and did not hold an interest as a General Partner.

                                  ARTICLE II

                    TERM AND TERMINATION OF THE PARTNERSHIP

               2.1.   Term of Partnership.  The Partnership shall continue until
                      -------------------
the tenth (10th) anniversary of the Final Closing Date unless sooner terminated
as provided in Paragraph 2.2 or by operation of law or extended as provided in
Paragraph 2.3.

               2.2.   Termination. The Partnership shall terminate prior to the
                      -----------
tenth (10th) anniversary of the Final Closing Date:

                      (a)  Ninety (90) days after the Bankruptcy or dissolution
of the General Partner unless within thirty (30) days after such event Two-
Thirds in Interest of the Limited Partners consent in writing to a continuation
of the Partnership and the appointment of a successor general partner;

                      (b)  One hundred twenty (120) days after the commencement
of any proceeding against the General Partner seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any statute, law or regulation, if the proceeding has not been
dismissed, or if within ninety (90) days after the appointment without its
consent or acquiescence of a trustee, receiver or liquidator of the General
Partner or of all or any substantial part of his properties, the appointment is
not vacated or stayed, or within ninety (90) days after the expiration of any
such stay, the appointment is not vacated, unless Two-Thirds in Interest of the
Limited Partners consent in writing to a continuation of the Partnership and the
appointment of a successor general partner;

                                      9.
<PAGE>

                      (c)  Ninety (90) days after Christos M. Cotsakos ceases to
be actively involved in the management of the Partnership for any reason unless
within such period a Majority in Interest of the Limited Partners (calculated by
treating the interest of E*Trade as a non-voting interest) elect to continue the
Partnership, with such additional personnel being involved in the management of
the Partnership as shall be acceptable to the General Partner and a Majority in
Interest of the Limited Partners (calculated by treating the interest of E*Trade
as a non-voting interest);

                      (d)  Upon the vote of Two-Thirds in Interest of the
Limited Partners after a final determination of a court of competent
jurisdiction that the General Partner intentionally or willfully breached any
material provision of this Agreement or that the General Partner was grossly
negligent in the performance of its duties hereunder; or

                      (e)  Upon the consent of the General Partner and One-Third
in Interest of the Limited Partners.

               2.3.   Extension of Term. The term of the Partnership may be
                      -----------------
extended for up to one year after the tenth (10th) anniversary of the Final
Closing Date in the discretion of the General Partner. The General Partner shall
deliver written notice of any such extension to the Limited Partners. The term
of the Partnership may be extended thereafter only with the consent of the
General Partner and Two-Thirds in Interest of the Limited Partners. Any such
extension shall be subject to the earlier termination of the Partnership as
provided in Paragraph 2.2. The last day of the term of the Partnership, as such
may be extended as provided herein, is referred to herein as the "Termination
                                                                  -----------
Date."
----

               2.4.   Events Affecting a Member of the General Partner. The
                      ------------------------------------------------
death, temporary or permanent incapacity, insanity, incompetency, Bankruptcy,
expulsion, retirement, withdrawal or removal of any member of the General
Partner or the admission of additional members to the General Partner shall not
dissolve the Partnership.

               2.5.   Events Affecting a Limited Partner of the Partnership. The
                      -----------------------------------------------------
death, temporary or permanent incapacity, insanity, incompetency, Bankruptcy,
liquidation, dissolution, reorganization, merger, sale of substantially all the
stock or assets of, or other change in the ownership or nature of a Limited
Partner shall not terminate the Partnership.

                                  ARTICLE III

                             CAPITAL CONTRIBUTIONS

               3.1.   Capital Commitment of the Limited Partners. Set forth
                      ------------------------------------------
opposite the name of each Limited Partner listed on Exhibit A attached hereto is
such Limited Partner's capital commitment to the Partnership. (The capital
commitment of each Partner (as it may be subsequently adjusted pursuant to the
terms hereof) is referred to herein as the Partner's "Capital Commitment" and
                                                      ------------------
the total Capital Commitments of the Partners shall be referred to herein as the
"Total Committed Capital.") Each Limited Partner's Capital Commitment represents
 -----------------------
the aggregate amount of capital that such Limited Partner has agreed to
contribute to the Partnership in accordance with the terms hereof. No Limited
Partner shall be obligated to contribute capital to the Partnership an amount in
excess of its Capital Commitment. E*Trade's Capital Commit-

                                      10.
<PAGE>

ment set forth in Exhibit A reflects the agreed fair market value of the
Securities being contributed by E*Trade to the Partnership and shall be the sole
Capital Commitment of E*Trade.

               3.2.   Capital Contributions by the Limited Partners
                      ---------------------------------------------

                      (a)  As its sole Capital Contribution, E*Trade has
contributed the Securities listed in Exhibit B, which Securities had the agreed
values when contributed set forth thereon. The Limited Partners (other than
E*Trade) shall make their Capital Contributions to the Partnership, payable by
wire transfer or check, in installments (each such payment being referred to as
a "Drawdown"). Such Capital Contributions shall be made upon no less than
   --------
fourteen (14) days' prior written notice from the General Partner (a "Drawdown
                                                                      --------
Notice"), in such amounts as may be determined in the sole discretion of the
------
General Partner and at such time, subject to the fourteen (14) day notice
period, as the General Partner shall specify in the Drawdown Notice (the
"Drawdown Date"). All Drawdowns shall be in U.S. dollars. No Limited Partner
 -------------
shall have the right to make partial payments of a required Capital
Contribution. Each Drawdown Notice shall be given to each Limited Partner of the
Partnership. The additional capital required of the respective Limited Partners
upon any Drawdown shall be based on the relative amounts of the unpaid balances
of their respective Capital Commitments.

                      (b)  After the expiration of the Investment Period, the
General Partner shall not be authorized to call (and the Partners shall not be
obligated to make) any Capital Contributions to fund investments which the
Partnership is not contractually obligated to make at such time other than for:

                           (1)   Investments reasonably expected to close within
         ninety (90) days after the expiration of the Investment Period;

                           (2)   Investments as to which, prior to the
         expiration of the Investment Period, the Partnership and the
         prospective company or entity in which such investment is to be made
         have a letter of intent or a definitive agreement setting forth the
         material terms and conditions of such investment;

                           (3)   Investments in partnerships, limited liability
         companies and other pass-through entities pursuant to capital
         commitments made during the Investment Period; or

                           (4)   Follow-On Investments (including Follow-On
         Investments with respect to investments in which the initial investment
         by the Partnership is made pursuant to clause (1), (2) or (3) of this
         Paragraph 3.2(b)).

               3.3.   Capital Commitment of the General Partner.  The General
                      -----------------------------------------
Partner's Capital Commitment shall be an aggregate amount of $350,000.

               3.4.   Capital Contributions of the General Partner. On any date
                      --------------------------------------------
on which a Limited Partner makes a contribution to the capital of the
Partnership, the General Partner shall contribute to the Partnership in such
amount as may be necessary to cause the percentage of the General Partner's
Capital Commitment actually contributed to the Partnership to be the same as the
percentage of the Capital Commitments of the Limited Partners (other than
E*Trade) actually

                                      11.
<PAGE>

contributed to the Partnership as of such date. Such contribution may be made,
at the General Partner's discretion, in the form of a promissory note.

               3.5.   Defaulting Partners
                      -------------------

                      (a)  If a Partner fails to pay any amount which it is
required to pay to the Partnership on or before the date when such amount is due
and payable, such Partner shall be deemed to be in default hereunder (a
"Defaulting Partner"), and written notice of default shall be given to such
 ------------------
Limited Partner by the General Partner by certified or registered mail. The
Partnership shall be entitled to enforce the obligations of each Partner to make
the contributions to capital required in this Agreement and 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 Partner, such Defaulting Partner shall pay all costs and expenses
incurred by the Partnership, including attorneys' fees, if the Partnership shall
prevail. Further, such Defaulting Partner shall be obligated to pay the
Partnership interest with respect to the amount of any Capital Contribution not
made when required by this Article, with such interest commencing on the
Drawdown Date for such contribution and ending on the date such contribution is
made to the Partnership. 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 General Partner, plus five percent (5%) per
annum, but not in excess of the amount allowable by law.

                      (b)  In addition to the remedies provided under Paragraph
3.5(a), if the Defaulting Partner does not cure a default in the payment of a
required contribution within ten (10) business days of the receipt of the notice
specified in Paragraph 3.5(a), the General Partner (in its sole discretion) may,
as liquidated and agreed current damages to the non-defaulting Partners for such
default (it being agreed that it would be difficult to fix the actual damages to
such Partners), cause and treat the Defaulting Partner's Capital Account to be
reduced by an amount equal to fifty percent (50%), which amount shall thereupon
become unrestricted assets of the Partnership and shall be allocated pro rata to
and among the respective Capital Accounts of the non-defaulting Partners in such
proportion as the Capital Account of each such non-defaulting Partner then bears
to the sum of the Capital Accounts of all non-defaulting Partners. The
Defaulting Partner's remaining fifty percent (50%) interest in its Capital
Account shall automatically be converted into a general unsecured obligation of
the Partnership, which obligation shall not bear any interest and shall be due
six (6) months after the Termination Date of the Partnership. Upon the
expiration of the ten (10) day period after the mailing of the notice of default
and the election by the General Partner to exercise its remedy under this
subparagraph (b), a Defaulting Partner shall automatically cease to be a Partner
under this Agreement and shall have no further interest, right or claim in or
against the Partnership, including any right or obligation to make subsequent
Capital Contributions when called.

                      (c)  Notwithstanding the foregoing, if, at any time before
a Capital Contribution required by Paragraph 3.2 becomes due, a Partner obtains
and delivers to the Partnership an opinion of counsel (which opinion shall be
reasonably acceptable to the General Partner) to the effect that the payment by
such Partner of any portion of any remaining Capital Contributions required by
this Agreement will be unlawful or that there is a material likelihood that such
payment will be unlawful, then (A) such Partner shall have no further right or
obliga-

                                      12.
<PAGE>

tion to pay the pertinent portion of such Capital Contribution (depending on
whether the Partner is withdrawing from or simply reducing its interest in the
Partnership), (B) such Partner's Capital Commitment specified on Exhibit A shall
be reduced by an amount equal to such Capital Contribution, and (C) such Partner
shall not, by reason of his or her failure to make such Capital Contribution, be
deemed or treated as a Defaulting Partner for purposes of this Paragraph 3.5.

                      (d)  The General Partner may seek to fund the amount of
any Capital Contribution that a Defaulting Partner has failed to contribute or
that is not contributed pursuant to Paragraph 3.5(c) (the "Shortfall Amount") as
                                                           ----------------
follows:

                           (1)   The General Partner may in its discretion
         determine to increase the amount of the Capital Contributions required
         from each Partner to fund such Shortfall Amount ratably in accordance
         with the Partners' relative unpaid Capital Commitments (not to exceed
         any Partner's remaining Capital Commitment).

                           (2)   Alternatively, the General Partner may offer
         the Partners who have made Capital Contributions the opportunity to
         make additional Capital Contributions to fund such Shortfall Amount. If
         any such Partner declines to invest in all or any portion of its share
         of the Shortfall Amount, such uncommitted amount will be offered to any
         other Partner who has invested its share of the Shortfall Amount and
         concurrently advised the General Partner of its willingness to make a
         Capital Contribution in excess of such share, and the General Partner
         shall allocate such uncommitted amount among all such other Partner on
         a basis the General Partner determines in its discretion is, under the
         circumstances, equitable and practicable.

                           (3)   To the extent any Shortfall Amount has not been
         fully funded by the Partners, the General Partner may seek to fund the
         remaining Shortfall Amount by offering Limited Partner interests to any
         other person on substantially the same economic terms and conditions as
         are provided to the Partners.

                                  ARTICLE IV

                       CAPITAL ACCOUNTS AND ALLOCATIONS

               4.1.   Capital Accounts.  A Capital Account shall be maintained
                      ----------------
on the Partnership's books for each Partner. In the event any interest in the
Partnership 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.

               4.2.   Adjustments to Capital Accounts
                      -------------------------------

                      (a)  The Capital Account of each Partner shall be
increased by:
---------

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

                                      13.
<PAGE>

                           (2)   such Partner's share of Capital Transaction
         Gain and Net Income (or items thereof) allocated to its Capital Account
         pursuant to this Agreement, and

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

                      (b)  The Capital Account of each Partner shall be
decreased by:
---------

                           (1)   the amount of money and the fair market value
         of any property other than money distributed by the Partnership
         (determined pursuant to Paragraph 9.2 hereof as of the date of
         distribution) to such Partner pursuant to the provisions of this
         Agreement (net of any liabilities secured by such property that such
         Partner is considered to assume or hold subject to for purposes of
         Section 752 of the Code),

                           (2)   such Partner's share of Capital Transaction
         Loss and Net Loss (or items thereof) allocated to its Capital Account
         pursuant to this Agreement, and

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

               4.3.   Allocation of Capital Transaction Gain or Loss
                      ----------------------------------------------

                      (a)  Allocation of Capital Transaction Gain. Capital
                           --------------------------------------
Transaction Gain of the Partnership for each Fiscal Year or Interim Period shall
be allocated as follows:

                           (1)   Twenty percent (20%) of the Partnership's
         Capital Transaction Gain shall be allocated to the General Partner.

                           (2)   The remaining eighty percent (80%) of the
         Partnership's Capital Transaction Gain shall be allocated to all
         Partners as a group.

                           (3)   Notwithstanding the foregoing, if one or more
         Limited Partners have been allocated a Reallocated Loss pursuant to
         Paragraph 4.5, then Partnership Capital Transaction Gain that would
         otherwise be allocated entirely to the General Partner pursuant to
         Paragraph 4.3(a)(1) shall instead be allocated first to the Limited
         Partners (in proportion to the amount of Reallocated Loss previously
         allocated to them) until the Limited Partners have been allocated an
         aggregate amount of Capital Transaction Gain equal to the previously
         allocated Reallocated Loss that has not been restored by prior
         allocations pursuant to this subparagraph and then any such remaining
         Capital Transaction Gain shall be allocated to the General Partner.

                      (b)  Allocation of Capital Transaction Loss. Capital
                           --------------------------------------
Transaction Loss of the Partnership for each Fiscal Year or Interim Period shall
be allocated as follows:

                                      14.
<PAGE>

                           (1)   Twenty percent (20%) of the Partnership's
         Capital Transaction Loss shall be allocated to the General Partner.

                           (2)   The remaining eighty percent (80%) of such
         Capital Transaction Loss shall be allocated to all Partners as a group.

               4.4.   Allocation of Net Income or Loss. Net Income or Loss of
                      --------------------------------
the Partnership for each Fiscal Year or Interim Period shall be allocated to all
Partners as a group.

               4.5.   Reallocation of Losses. If for any Fiscal Year or Interim
                      ----------------------
Period after the Partnership's Capital Transaction Gain or Loss and Net Income
or Loss has been allocated pursuant to Paragraphs 4.3 and 4.4 the closing
Adjusted Capital Balance of the General Partner has been reduced to less than
zero by more than the amount necessary to properly reflect the General Partner's
obligation to recontribute amounts to the Partnership pursuant to Paragraph 8.2
upon termination of the Partnership, then an amount of Capital Transaction Loss
and, to the extent necessary, Net Loss (the "Reallocated Loss") for such Fiscal
                                             ----------------
Year or Interim Period shall be reallocated from the General Partner to the
Limited Partners as a group so that the General Partner's closing Adjusted
Capital Balance is not reduced below zero by more than the amount necessary to
properly reflect the General Partner's obligation to recontribute amounts to the
Partnership pursuant to Paragraph 8.2 upon termination of the Partnership. A
Reallocated Loss may be restored only from future Capital Transaction Gain.

               4.6.   Allocation Among Partners as a Group. Except as otherwise
                      ------------------------------------
specifically provided in this Agreement, all Capital Transaction Gain or Loss
and Net Income and Loss (and items thereof) allocated to the Partners (or a
group of Partners) as a group for any period shall be allocated among such
Partners in proportion to their respective Partnership Percentages as of the end
of such period. In making such allocations, any changes in Partnership
Percentages as a result of changes in the Capital Commitments of the Partners,
any exclusion of any Partners from particular investments, any contributions of
Partners to fund any Shortfall Amount and similar matters shall be taken into
account.

               4.7.   Special Allocation Among Late-Entering Limited Partners of
                      ----------------------------------------------------------
Organization and Operating Expenses. The following items of Net Income or Loss
-----------------------------------
are collectively referred to herein as "Operating Expenses":

                      (a)  The Management Fee and other payments and
reimbursements of expenses paid pursuant to Article V other than amounts
capitalized as part of the cost of Securities or other assets for federal income
tax purposes; and

                      (b)  All expenditures of the Partnership classified for
federal income tax purposes as organization or syndication expenses.

               Notwithstanding Paragraph 4.6, if additional Limited Partners are
admitted to the Partnership pursuant to Paragraph 7.6(b) hereof during a
particular period, the Operating Expenses for such period allocable to the
Limited Partners shall be allocated among the Original Partners and the Limited
Partners admitted pursuant to Paragraph 7.6(b) hereof so that, to the extent
possible, the cumulative amount of Operating Expenses allocated to each Limited
Partner is proportionate to such Limited Partner's Partnership Percentage as
compared to the Partnership

                                      15.
<PAGE>

Percentages of the Limited Partners as a group (taking into account the
additional Limited Partners admitted pursuant to Paragraph 7.6(b)).

               4.8.   Allocations and Distributions Attributable to Removed
General Partner. Notwithstanding the foregoing sections of this Article IV, if
the initial General Partner ceases to be the General Partner and a successor
General Partner is appointed pursuant to Paragraph 2.2, such initial General
Partner shall continue to receive the allocations and distributions otherwise
attributable to the General Partner pursuant to this Article IV, Article VI and
Article VIII both in its capacity as a General Partner and in its capacity as a
Limited Partner; provided, however, that on or after the date a successor
General Partner is appointed pursuant to Paragraph 2.2, such allocations and
distributions attributable to the initial General Partner in its capacity as a
General Partner shall be calculated only with respect to investments that were
made or as to which the Partnership was committed to invest or had reserved
capital to invest at such time. Notwithstanding the foregoing if the General
Partner is removed as a result of committing an act of fraud or willful
misconduct against the interest of the Limited Partners, the General Partner's
rights to further allocations pursuant to Paragraphs 4.3(a)(1) and 4.3(b)(1)
shall cease upon such removal. The General Partner shall nevertheless continue
to be subject to any obligations to the Partnership pursuant to Paragraph 8.2.

                                   ARTICLE V

                           MANAGEMENT FEE; EXPENSES

               5.1.   Entitlement to Management Fee. As compensation for its
                      -----------------------------
services rendered in managing the Partnership, the General Partner shall be
entitled to recover a fee calculated as prescribed in this Article V (the
"Management Fee"). The Management Fee shall not be considered a distribution of
profits or a return of capital for the purpose of any provision of this
Agreement, but shall be considered an expense of the Partnership, and shall be
deducted from Partnership Net Income or added to Partnership Net Loss in
determining the Net Income or Net Loss of the Partnership pursuant to Article IV
hereof.

               5.2.   Payment of Management Fee. The Management Fee shall be at
                      -------------------------
an annual rate of 1.75% of the Total Committed Capital of the Partnership
through the end of the Investment Period. After the end of the Investment
Period, the Management Fee shall be at an annual rate of 1.75% of the total cost
of the Portfolio Securities held by the Partnership, with the cost of the
Portfolio Securities being redetermined for this purpose on January 1 and July 1
of each Fiscal Year after the end of the Investment Period. The Management Fee
shall commence to accrue on the date of this Agreement. Payment of the
Management Fee shall be made (i) with respect to the first Fiscal Quarter of the
Partnership (ending September 30, 1999), at any time on or prior to September
30, 1999, in an amount equal to the percentage of the annual Management Fee as
reflects the number of days from the date of this Agreement through September
30, 1999, divided by 365 days, and (ii) thereafter quarterly in advance on the
first day of each Fiscal Quarter of the Partnership in an amount equal to 25% of
the annualized Management Fee. Additional Management Fees resulting from an
increase in the Total Committed Capital shall be payable promptly after the
acceptance of additional Capital Commitments (with such payment being prorated
to reflect the remaining term of the then current fiscal period). The Management
Fee shall be reduced by the amount of any transaction fees (but not including
director options or

                                      16.
<PAGE>

director fees) received by the General Partner or its members or Affiliates (net
of associated expenses) from Portfolio Companies. Such reduction shall be made
in each installment of the Management Fee until the entire net amount of the
transaction fees have offset the Management Fees.

               5.3.   Payment of Expenses.
                      -------------------

                      (a)  Except as set forth in Paragraph 5.3(b) hereof, the
General Partner agrees to incur on behalf of the Partnership and to otherwise
assume all expenses attributable to the management and administration of the
investment activities of the Partnership. Such expenses include (but are not
limited to) consulting fees, compensation and expenses of the employees of the
General Partner, including any salaries of members of the General Partner in
their capacity as employees of the General Partner, expenses for administrative,
bookkeeping, clerical and related support services, insurance, office space and
facilities, utilities, telephone and travel insofar as they relate to the
investment activities of the Partnership.

                      (b)  The Partnership shall pay, or reimburse the General
Partner (or E*Trade if and to the extent it incurs expenses on behalf of the
Partnership) for all expenses of the Partnership (or incurred by the General
Partner or E*Trade for or on behalf of the Partnership) which (i) relate to the
management and administration of the Partnership itself as a going concern (as
opposed to operating expenses incurred in connection with the Partnership's
investment activities), or (ii) are incurred in the purchase, holding, sale,
exchange or other disposition of investments. Such expenses include (without
limitation) organizational and offering expenses of the Partnership up to an
aggregate of two hundred thousand dollars ($200,000); any taxes which may be
assessed against the Partnership; commissions or brokerage fees or similar
charges incurred in connection with the purchase and sale of securities
(including any merger or transaction fees payable to third parties); interest
expense and financing charges for borrowed money; all expenses relating to
litigation and threatened litigation involving the Partnership; normal
investment banking, legal, custodial, registration, auditing and accounting
services provided to the Partnership; and any other expenses associated with the
acquisition, holding or disposition of investments. The Partnership also shall
pay or reimburse the General Partner (or E*Trade) for all payments to third
parties related to the investment activities of the Partnership in developing,
negotiating and structuring prospective or potential investments with respect to
which the Partnership enters into a purchase agreement, letter of intent or
memorandum of understanding, but that are not ultimately made.

               5.4.   No Salaries to General Partner. The General Partner and
                      ------------------------------
its members shall receive no salaries from the Partnership. This paragraph shall
not restrict the payment of salaries by the General Partner.

                                  ARTICLE VI

               WITHDRAWALS BY AND DISTRIBUTIONS TO THE PARTNERS

               6.1.   Interest. No interest shall be paid to any Partner on
                      --------
account of its interest in the capital of, or on account of its investment in,
the Partnership.

                                      17.
<PAGE>

               6.2.   Withdrawals by the Partners. No Partner may withdraw any
                      ---------------------------
amount from its Capital Account except as specifically provided in this
Agreement.

               6.3.   Mandatory Cash Distributions. Within ninety (90) days
                      ----------------------------
after the end of each Fiscal Year, the Partnership shall distribute to each
Partner cash in an amount equal to the aggregate federal and state income tax
liability such Partner would have incurred as a result of such Partner's
ownership of an interest in the Partnership, calculated: (i) as if allocations
from the Partnership of any Net Capital Gain and any Net Loss were, for such
Fiscal Year, the sole source of taxable income and loss for such Partner; (ii)
as if such Partner were an individual taxable at the combined maximum marginal
rate provided with respect to such Net Capital Gain and Net Loss (taking into
account the character of the items of Net Capital Gain and Net Loss for tax
purposes) under applicable federal and state income tax laws applicable to
individuals residing in California; and (iii) taking into account the
deductibility of state taxes in the calculation of federal income taxes (a "Tax
                                                                            ---
Distribution"). Any Tax Distributions to a Partner shall reduce the amounts
------------
otherwise distributable to the Partner pursuant to Paragraph 6.4.

               6.4.   Additional Distributions. The General Partner (i) shall
                      ------------------------
distribute any proceeds from the Sale or Exchange of Securities of Portfolio
Companies as soon as practicable following such Sale or Exchange, subject to the
retention of such amounts as are necessary to pay Partnership expenses and
obligations (including the Management Fee) and/or for permitted reinvestments
and (ii) may in its discretion make distributions of Securities of Portfolio
Companies. All distributions under this Paragraph 6.4 shall be made as follows:

                      (a)  At any time prior to achievement of Payout if the
Fair Value Test is not satisfied, all such distributions will be made to the
Partners as a group in proportion to their respective Partnership Percentages.

                      (b)  At any time prior to achievement of Payout if the
Fair Value Test is satisfied, all such distributions will be made, in the
General Partner's sole discretion, either (1) to the Partners as a group in
proportion to their respective Partnership Percentages, or (2)(i) first, to the
General Partner until the General Partner has received distributions pursuant to
this Paragraph 6.4(b)(2)(i) and Tax Distributions pursuant to Paragraph 6.3
equal to a maximum of twenty percent (20%) of the total amount distributed and
being distributed to all Partners pursuant to Paragraphs 6.3 and 6.4(a) and this
Paragraph 6.4(b), and (ii) the remainder of such distributions will be made to
the Partners as a group in proportion to their respective Partnership
Percentages; provided, however, that the amount distributable to the General
             -----------------
Partner pursuant to Paragraph 6.4(b)(2)(i) will in no event exceed either (x)
the cumulative amount of the Capital Transaction Gain net of Capital Transaction
Loss allocated to the General Partner under Paragraphs 4.3(a)(1) and 4.3(b)(1)
or (y) an amount which would cause the General Partner's Fair Value Capital
Account to be reduced below the amount of the General Partner's Capital
Contributions or would further reduce an existing balance of such Fair Value
Capital Account that is already less than the General Partner's Capital
Contributions; provided, further that the General Partner will not cause or
               -----------------
permit the Partnership to make any distribution to the General Partner pursuant
to Paragraph 6.4(b)(2)(i) unless the Partnership has made (and/or provided
through reserves for) distributions to each Partner, with respect to the Fiscal
Year in which any proposed distribution under Paragraph 6.4(b)(2)(i) otherwise
would occur, in aggregate amounts equal to

                                      18.
<PAGE>

the Tax Distribution to which each Partner would be entitled pursuant to
Paragraph 6.3 with respect to such Fiscal Year if such Fiscal Year ended on the
date of the proposed distribution.

                      (c)  After Payout has been achieved, all such
distributions will be made to the Partners in proportion to the positive
balances in their respective Capital Accounts after such Capital Accounts have
been adjusted to reflect all Capital Transaction Gain or Loss (including Capital
Transaction Gain or Loss arising in connection with the distribution and Sale or
Exchange of Securities) through the date of the distribution.

                      (d)  Each class of Securities to be distributed in kind
shall be distributed to the Partners in proportion to their respective shares of
the proposed distribution, except to the extent that a disproportionate
distribution of Securities is necessary in order to avoid distributing
fractional shares. For purposes of the preceding sentence, each lot of stock or
other Securities having a separately identifiable tax basis or holding period
will be treated as a separate class of Securities. Notwithstanding anything
contained in this Agreement: (i) no distribution (other than a Tax Distribution)
will be made to any Partner if, and to the extent that, such distribution would
(x) cause such Partner's Capital Account to be negative by an amount which
exceeds such Partner's Zero Balance Amount or (y) further reduce a balance in
such Partner's Capital Account that is already negative by an amount which
exceeds such Partner's Zero Balance Amount; and (ii) no distribution will be
made unless all liabilities of the Partnership to persons other than Partners
have been satisfied or, in the good faith judgment of the General Partner, there
remains property of the Partnership sufficient to satisfy such liabilities.

                      (e)  Except upon liquidation of the Partnership or with
the approval of the General Partner and a Majority in Interest of the Limited
Partners, no distribution shall be made other than in cash or Marketable
Securities.

                      (f)  Immediately prior to any distribution in kind of
Securities (or other Partnership assets) pursuant to any provision of this
Agreement (including pursuant to Article VIII), the difference between the fair
market value and the Book Value of any Securities (or other Partnership assets)
distributed shall be allocated to the Partners as Capital Transaction Gain or
Loss pursuant to Article IV.

                      (g)  Securities distributed in kind pursuant to this
Paragraph 6.4 shall be subject to such conditions and restrictions as the
General Partner determines are legally required.

                      (h)  For purposes of this Agreement, all distributions of
Securities shall be deemed to have been made on the date on which the
Partnership commences the distribution of the Securities to the Limited
Partners, provided that the delivery of the Securities is promptly completed.

                                  ARTICLE VII

                      MANAGEMENT, DUTIES AND RESTRICTIONS

               7.1.   Management by General Partner. The General Partner shall
                      -----------------------------
have the sole and exclusive right and power to manage, control, and conduct the
affairs of the Partnership and

                                      19.
<PAGE>

to perform any and all acts on behalf of the Partnership that the General
Partner deems necessary, advisable or incidental to carry out any or all of the
objects and purposes of the Partnership.

               7.2.   Indebtedness; Restrictions; Reinvestments
                      -----------------------------------------

                      (a)  The Partnership may borrow money and guarantee the
obligations of, and supply letters of credit on behalf of, Portfolio Companies;
provided that at no time shall the Partnership guarantee, directly or
indirectly, obligations of a General Partner or a Limited Partner; and further
provided that the Partnership shall provide a guaranty to a Portfolio Company
only if each member of the General Partner with an interest in that Portfolio
Company provides a guaranty on the same terms and in amount proportional to the
investment of such member as compared to the Partnership. While outstanding, any
guarantee of the obligations of any Portfolio Company shall be considered an
investment in such Portfolio Company for purposes of Paragraph 7.2(b).
Additionally, except with the approval of a Majority in Interest of the Limited
Partners, the Partnership shall not at any point in time be the guarantor (or
the obligor on any letter of credit) of then-current liabilities that, in the
aggregate, amount to more than thirty percent (30%) of the Total Committed
Capital of the Partnership.

                      (b)  Except with the approval of a Majority in Interest of
the Limited Partners and except with respect to the Securities contributed by
E*Trade as described in Exhibit B, the Partnership shall not invest more than
twenty-five percent (25%) of the aggregate amount of the Total Committed Capital
(i) in the Securities of any one issuer or its affiliates, (ii) in any other
investment pool or partnership, or (iii) in Securities purchased by the
Partnership in the over-the-counter market or that are listed on a securities
exchange (with the twenty-five percent (25%) test being applied separately with
respect to each of the foregoing three categories of investments). The
limitations set forth in this Paragraph 7.2(b) shall not apply to any funds of
the Partnership which are invested in investments described in Paragraph 7.2(e).

                      (c)  The Partnership shall not reinvest any proceeds
realized on the Sale or Exchange of Securities of Portfolio Companies in
Securities of other Portfolio Companies except for Follow-On Investments. In no
event shall the Partnership make cumulative investments in Securities of
Portfolio Companies in excess of the Total Committed Capital.

                      (d)  No Partner shall be permitted to borrow money from
the Partnership.

                      (e)  Pending use of funds to make investments in
Securities of Portfolio Companies, to make distributions or to pay expenses or
obligations of the Partnership in accordance with the terms hereof, the funds of
the Partnership shall be invested by the General Partner only in (i) securities
issued by, or backed by the full faith and credit of, the United States
government, (ii) certificates of deposit issued by commercial banks with capital
in excess of Five Hundred Million Dollars ($500,000,000), (iii) commercial paper
rated A-1 or P-1, or (iv) shares in investment companies generally known as
"money market funds" which have assets in excess of Two Hundred Fifty Million
 ------------------
Dollars ($250,000,000).

                      (f)  The Partnership shall not invest in (i) any
Securities the purchase of which is opposed by the issuer's board of directors;
or (ii) options contracts or futures con-

                                      20.
<PAGE>

tracts, or any other security, the value of which is based upon, or derived
from, any underlying index, reference rate, other security, commodity or other
asset; provided, however, that this restriction shall not be deemed to prohibit
the General Partner from (A) hedging Portfolio Company investments so long as
such transactions are reasonably related to the amount and type of Securities
being hedged and are not undertaken for independent investment purposes, (B)
hedging the currency risk of foreign Portfolio Company investments, (C)
investing in any Security the value of which is based upon, or derived from, any
Security already held by the Partnership, and (D) investing in traditional
options, warrants and other rights to acquire Securities that would otherwise be
permitted Portfolio Company investments under the terms of this Agreement.

                      (g)  The Partnership shall not invest in real estate, oil
or gas investments, commodities or in securities bearing unlimited liability.

                      (h)  The Partnership shall not engage in uncovered short
sales.

                      (i)  The Partnership shall not make any investment in an
issuer which is organized in any jurisdiction outside the United States and
Canada (each such issuer being a "Foreign Entity"), unless the Partnership has
                                  --------------
received, prior to or at the closing of any such investment, a Limited Liability
Entity Opinion with respect to the issuer's form of entity. A "Limited Liability
                                                               -----------------
Entity Opinion" shall be an opinion of counsel, licensed or otherwise authorized
--------------
to practice in the jurisdiction in which a particular Foreign Entity is
organized, which opinion may be relied upon by the Partnership and does not
contain more than reasonable carve-outs by opining counsel, stating (i) that the
Partnership shall not be obligated beyond its committed investment in such
Foreign Entity for any debt, obligation or liability of an entity of the form of
the particular issuer, solely by reason of the Partnership being an investor in
such an entity; and (ii) that no Limited Partner of the Partnership shall be
obligated for any debt, obligation or liability of an entity of the form of the
particular issuer, solely by reason of the Partnership being an investor in such
an entity. Once the Partnership has received such an opinion for investments in
a particular form of entity in a particular jurisdiction, such opinion shall
satisfy the requirements of this paragraph for all investments in other Foreign
Entities of the same form as that which is the subject of the opinion. The
Partnership shall not invest an aggregate of more than thirty percent (30%) of
the Total Committed Capital in Securities of Foreign Entities.

                      (j)  The Partnership shall not make any investment in any
other investment pool or partnership if a management fee and/or "carried
interest" is payable with respect to such investment unless the General Partner
waives its Management Fee and/or "carry" with respect to such investment.

               7.3.   Investment Representation of the Limited Partners. This
                      -------------------------------------------------
Agreement is made with each Limited Partner in reliance upon such Limited
Partner's representation to the Partnership, which by executing this Agreement
the Limited Partner hereby confirms, that such Partner's interest in the
Partnership is being acquired for investment, and not with a view to the sale or
distribution of any part thereof, and that such Partner has no present intention
of selling, granting participation in, or otherwise distributing the same. Each
Limited Partner further represents that such Limited Partner does not have any
contract, undertaking, agreement, or arrange-

                                      21.
<PAGE>

ment with any person to sell or transfer to any third person such Limited
Partner's interest in the Partnership.

               7.4.   Accredited Investor Representation. Each Limited Partner
                      ----------------------------------
represents that such Partner has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Partnership and that such Partner is an accredited investor,
as that term is defined in Regulation D promulgated by the Securities and
Exchange Commission.

               7.5.   No Control by the Limited Partners; Rights of the Limited
                      ---------------------------------------------------------
Partners.
--------

                      (a)  The Limited Partners shall take no part in the
control or management of the affairs of the Partnership nor shall a Limited
Partner have any authority to act for or on behalf of the Partnership except as
is specifically permitted by this Agreement and as is specifically required by
the Delaware Act.

                      (b)  In addition to any other restrictions applicable to
Limited Partners set forth in this Agreement and notwithstanding any other
provisions thereof, for so long as the Partnership has an investment in a Media
Company, any Limited Partner that elects in writing to be insulated from the
"multiple ownership attribution" rules and policies of the FCC (an "Insulated
Limited Partner") shall not (and if such Limited Partner is not an individual,
each officer, director, partner or equivalent non-corporate official of such
Limited Partner acting on behalf of or as a representative of such Limited
Partner in its capacity as a Limited Partner of the Partnership shall not):

                           (1)   act as an employee of the Partnership if his or
         her functions, directly or indirectly, relate to the media business of
         the Partnership or any Media Company in which the Partnership has an
         investment;

                           (2)   serve, in any material capacity, as an
         independent contractor or agent with respect to the media business of
         the Partnership or any Media Company in which the Partnership has an
         investment;

                           (3)   communicate on matters pertaining to the
         day-to-day media operations of the Partnership or a Media Company with
         (i) an officer, director, partner, agent, representative or employee of
         such Media Company, or (ii) the General Partner;

                           (4)   perform any services for the Partnership
         materially relating to the media activities of the Partnership or any
         Media Company in which the Partnership has an investment, except that
         any Limited Partner may make loans to, or act as a surety for, the
         Partnership or any such Media Company;

                           (5)   vote on the admission of any new General
         Partner to the Partnership unless such admission is approved by the
         General Partner;

                           (6)   become actively involved in the management or
         operation of the Partnership's media businesses; or

                                      22.
<PAGE>

                           (7)   vote for the removal of the General Partner
         except where the General Partner is subject to Bankruptcy proceedings,
         is adjudicated incompetent by a court of competent jurisdiction, or is
         removed for any cause which is determined by an independent party to
         constitute criminal conduct other such extraordinary conduct with
         respect to which a prudent investor would require the right to remove
         the General Partner.

               7.6.   Admission of Additional Partners.
                      --------------------------------

                      (a)  Subject to Paragraph 7.7 and subparagraph (b) below,
no additional person may be admitted to the Partnership, either as a limited or
general partner, without the prior written consent of both the General Partner
and Two-Thirds in Interest of the Limited Partners.

                      (b)  For a period ending on October 31, 1999 (the "Final
                                                                         -----
Closing Date"), the General Partner may admit persons as additional Limited
------------
Partners without the consent of any of the then Limited Partners, provided that
the Total Committed Capital of the Partnership shall not exceed one hundred
million dollars ($100,000,000). Following the admission of any such subsequently
admitted Limited Partners pursuant to this Paragraph 7.6(b), such Limited
Partners shall be deemed for all purposes of this Agreement (unless expressly
provided to the contrary herein) to have been admitted as of the original date
of this Agreement. Any Limited Partner admitted pursuant to this Paragraph
7.6(b) shall, upon admission, contribute to the Partnership the same portion of
such Limited Partner's Capital Commitment as the previously admitted Limited
Partners have contributed with respect to their Capital Commitments. Upon the
admission of any additional Limited Partners to the Partnership pursuant to this
Paragraph 7.6(b), the assets of the Partnership shall not be revalued except in
the discretion of the General Partner.

                      (c)  In addition to the Capital Contribution required
under Paragraph 7.6(b), each Limited Partner admitted as an additional Limited
Partner pursuant to Paragraph 7.6(b) shall be required to pay to the Partnership
interest at the Wells Fargo Bank, N.A. "prime rate" (in effect at the time the
additional Limited Partner interest was acquired) based on the amount of the
Capital Contribution payable under Paragraph 7.6(b) and the time period(s) from
the existing Limited Partners' prior Capital Contributions to the Partnership to
the date that the Capital Contribution under Paragraph 7.6(b) is made. Such
interest shall accompany the Capital Contribution payable under Paragraph 7.6(b)
and shall be immediately distributed pro rata to and among all existing Partners
(based on their respective Partnership Percentages immediately prior to the
issuance of such additional Limited Partner interests). The payment of such
interest to the Partnership shall not be considered a Capital Contribution and
shall not be considered an item of Capital Transaction Gain or Loss or Net
Income or Loss allocable pursuant to Article IV; furthermore, the distribution
to the existing Partners shall not result in a reduction in their Capital
Accounts.

                                      23.
<PAGE>

               7.7.   Assignment or Transfer of Partnership Interests
                      -----------------------------------------------

                      (a)  The General Partner shall not sell, assign, pledge,
mortgage or otherwise dispose of or transfer its interest in the Partnership
without the prior written consent of Two-Thirds in Interest of the Limited
Partners.

                      (b)  No Limited Partner shall sell, assign, pledge,
mortgage, or otherwise dispose of or transfer its interest in the Partnership
without the prior written consent of the General Partner. Notwithstanding the
foregoing, a Limited Partner may sell, assign, pledge, mortgage, or otherwise
dispose of or transfer its interest in the Partnership without such consent (i)
to any affiliate of the Limited Partner; or (ii) as may be required by any law
or regulation; provided, however, that in the case of any permitted transfer,
the General Partner receives at least ten (10) days' prior written notice of
such transfer; and provided further that no transferee of a Limited Partner's
interest may be admitted to the Partnership as a substitute Limited Partner
without the consent of the General Partner.

                      (c)  Notwithstanding any other provision of this
Agreement, no transfer or other disposition of the interest of a Limited Partner
shall be permitted until the General Partner shall have received, or waived
receipt of, an opinion of counsel to the Partnership reasonably satisfactory to
it that the effect of such transfer or disposition would not:

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

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

                           (3)   require the Partnership, the General Partner or
         any partner of the General Partner to register as an investment adviser
         under the Investment Advisers Act of 1940, as amended;

                           (4)   result in a termination of the Partnership for
         tax purposes if the General Partner determines that such termination
         would result in a material adverse tax consequence to any of the
         Partners;

                           (5)   result in a violation of any law, rule, or
         regulation by the Limited Partner, the Partnership, the General Partner
         or any partner of the General Partner;

                           (6)   increase the number of Limited Partners;

                           (7)   cause the Partnership to be characterized as a
         "publicly traded partnership" taxable as a corporation (within the
         meaning set forth in Sections 512 and 7704(b) of the Code) or
         materially increase the risk that the Partnership will be so
         characterized.

               All costs associated with such opinion shall be borne by the
transferring Limited Partner.

                                      24.
<PAGE>

               7.8.   Investment Opportunities; Conflicts of Interest
                      -----------------------------------------------

                      (a)  Christos M. Cotsakos and Thomas A. Bevilacqua (the
"Principals") are the current principal members of the General Partner. Subject
 ----------
to Paragraph 7.8(b), the Principals may serve as the general partners, sponsors,
principals of the general partners or investment advisers of other venture
funds. The Principals are employed by E*Trade and shall devote significant and
substantial time and effort to E*Trade. The Principals shall be free to conduct
any and all such activities.

                      (b)  So long as the Partnership is less than Two-Thirds
Invested, neither of the Principals may, directly or indirectly, organize or act
as a general partner or managing member of any other entity that is a private
equity fund. For purposes of this Agreement, the Partnership shall be deemed to
be "Two-Thirds Invested" when at least sixty-six and two-thirds percent (66-
    -------------------
2/3%) of the Partners' Capital Commitments (other than any Capital Commitments
that have been terminated) have been invested by the Partnership in Portfolio
Companies (with E*Trade's Capital Contribution made in Securities being deemed
to have been so invested), reserved for investments in such Portfolio Companies
based upon the General Partner's good faith estimate of the anticipated capital
requirements of each Portfolio Company, or paid or reserved for the payment of
reasonably anticipated partnership liabilities and obligations, including
payment of the Management Fee.

                      (c)  The General Partner and the members of the General
Partner shall be permitted to receive fees (director's, consulting, break-up,
financial advisory or other), commissions and other compensation (in whatever
form, including stock and options) from entities other than the Partnership,
including Portfolio Companies.

                      (d)  Except as expressly provided otherwise in this
Agreement, the Partners and the members and affiliates of the General Partner
may engage in, invest in or possess an interest in, business activities of every
kind and description, independently or with others.

                      (e)  The Limited Partners hereby agree that E*Trade may
have investment opportunities that are not made available to the Partnership. In
addition, the General Partner may offer the right to participate in investment
opportunities of the Partnership to other private investors, groups,
partnerships, or corporations. No Limited Partner shall be required to make any
investment opportunity available to the Partnership.

                      (f)  The General Partner may enter, on behalf of the
Partnership, into contracts, agreements, undertakings and transactions with any
Partners, or with any person, firm or corporation having any business, financial
or other relationship with any Partner, provided that such transactions with
such persons and entities are on terms no less favorable to the Partnership than
are generally afforded to unrelated third parties in comparable transactions.

                                      25.
<PAGE>

                                 ARTICLE VIII

                DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIP

               8.1.   Liquidation Procedures.  Upon termination of the
                      ----------------------
Partnership in accordance with Article II:

                      (a)  The affairs of the Partnership shall be wound up and
the Partnership shall be dissolved. The General Partner shall serve as the
liquidator; provided that in the event of a termination of the Partnership
pursuant to Paragraph 2.2(a),(b), or (c) another person or entity may be
designated by Two-Thirds in Interest of the Limited Partners to serve as
liquidator.

                      (b)  Distributions in dissolution may be made in cash or
in kind or partly in cash and partly in kind. Each Security (and each class of
Securities, or portion of a class of Securities having a tax basis per share or
unit different from other portions of such class) distributed in kind shall be
distributed ratably in accordance with the General Partner's and the Limited
Partners' Capital Accounts unless such distribution would result or there is a
material likelihood that such distribution would result (i) in a violation of a
law or regulation applicable to a Limited Partner or a tax penalty to a Limited
Partner, in which event, upon receipt by the General Partner of notice to such
effect, such Limited Partner may designate a different entity to receive the
distribution, or designate, subject to the approval of the General Partner, an
alternative distribution procedure or (ii) in a distribution of fractional
shares. Each such Security shall be valued at fair market value in accordance
with Paragraph 9.2 as of the date of distribution and shall be subject to
reasonable conditions and restrictions necessary or advisable in order to
preserve the value of the assets distributed, or for legal reasons.

                      (c)  The General Partner (or other liquidator) shall in
its sole discretion determine the most advantageous time for the Partnership 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 Partnership and distributed to the Partners in the
following order:

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

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

               In the discretion of the General Partner, a pro rata portion of
the distributions that would otherwise be made to the Partners pursuant to this
Paragraph 8.1 may be withheld to provide a reasonable reserve for Partnership
liabilities (contingent or otherwise) and to reflect the unrealized portion of
any installment obligations owed to the Partnership, provided that such withheld
amounts (to the extent not used to pay partnership liabilities) shall be
distributed to the Partners as soon as practicable.

                                      26.
<PAGE>

               (e)  If the General Partner's Capital Account has a deficit
balance (after giving effect to all contributions, distributions and allocations
for all taxable years, including the year during which such liquidation occurs),
then except as otherwise required pursuant to Paragraph 8.2, the General Partner
shall have no obligation at any time to repay or restore to the Partnership all
or any part of any distribution made to it from the Partnership or make any
contribution to the capital of the Partnership with respect to such deficit. If
any Limited Partner has a deficit balance in his Capital Account (after giving
effect to all contributions, distributions and allocations for all taxable
years, including the year during which such liquidation occurs), then other than
required by law or Paragraph 10.14, such Limited Partner shall have no
obligation to repay or restore to the Partnership any distribution made to it
from the Partnership or make any contribution to the capital of the Partnership
with respect to such deficit, and such deficit shall not be considered a debt
owed to the Partnership or to any other person for any purpose whatsoever.

          8.2. Liability of General Partner to Return Excess Distributions. If
               -----------------------------------------------------------
after effecting the distributions provided for in this Article VIII the Excess
Distribution Amount is greater than zero, then the General Partner shall
forthwith contribute to the capital of the Partnership cash or Marketable
Securities (with any such contributed Marketable Securities being valued
pursuant to Paragraph 9.2 on the date of contribution) in an amount equal to the
lesser of (i) the Excess Distribution Amount, or (ii) the After-Tax Distribution
Amount. Such contribution shall be distributed to the Partners to the extent of
and in proportion to their positive Capital Account balances.

          For purposes of this Paragraph 8.2:

               (a)  The "After-Tax Distribution Amount" shall be equal to the
                         -----------------------------
General Partner Distributions less all federal, state and other jurisdictional
(including non-United States taxes) actual marginal tax liabilities that the
members of the General Partner have incurred by reason of having been members of
the General Partner, but only to the extent attributable to (i) items of taxable
income, gain, loss, deduction and credit allocated to the General Partner by the
Partnership and (ii) net capital gains realized by the General Partner or by
such members (offset by any capital losses realized by the General partner or by
such members) upon the sale or exchange of Securities distributed by the
Partnership to the General Partner (with such net capital gains being limited to
an amount based on the value as of the distribution date of the Securities
distributed). The After-Tax Distribution amount shall be increased by all
federal, state or other jurisdictional tax benefits actually realized by the
General Partner's members in the year of a contribution required by this
Paragraph 8.2 as a result of such contribution.

               (b)  The "Excess Distribution Amount" shall equal the lesser of
                         --------------------------
(i) the amount by which the General Partner Distributions exceed the sum of the
Total General Partner Net Gain or Loss plus the aggregate contributions made to
the Partnership by the General Partner or (ii) the amount of the General Partner
Distributions.

                                      27.
<PAGE>

               (c)  "Total General Partner Net Gain or Loss" shall be calculated
                     --------------------------------------
as follows:

                    (1)  First, the Partnership's aggregate Capital Transaction
     Gain for all accounting periods shall be netted against the Partnership's
     aggregate Capital Transaction Loss for all accounting periods and the
     result shall be multiplied by the sum of (x) twenty percent (20%) plus (y)
     eighty percent (80%) of the General Partner's Partnership Percentage. The
     resulting product shall be considered a positive number if such aggregate
     Capital Transaction Gain exceeded aggregate Capital Transaction Loss and a
     negative number if such aggregate Capital Transaction Loss exceeded
     aggregate Capital Transaction Gain;

                    (2)  Second, the Partnership's aggregate Net Income for all
     accounting periods shall be netted against the Partnership's aggregate Net
     Loss for all accounting periods and the result shall be multiplied by the
     General Partner's Partnership Percentage. The result shall be considered a
     positive number if such aggregate Net Income exceeded such aggregate Net
     Loss and a negative number if such aggregate Net Loss exceeded such
     aggregate Net Income;

                    (3)  Third, the amount computed in clause (2) shall be added
     to the amount computed in clause (1). If the result of such computation is
     a positive number it shall be considered Total General Partner Net Gain and
     if the result of such computation is a negative number it shall be
     considered Total General Partner Net Loss.

               (d)  "General Partner Distributions" shall equal the sum of all
                     -----------------------------
distributions received by the General Partner pursuant to Article VI and this
Article VIII.

               (e)  All in-kind distributions shall be valued as provided in
Paragraph 9.2 as of the date of the distribution.

               (f)  Only allocations and distributions made to the General
Partner in its capacity as general partner of the Partnership (including
allocations and distributions resulting from the General Partner's Capital
Contributions made in such capacity) shall be considered for purposes of the
foregoing computations (such distributions shall, however, in no way be
construed so as to include amounts paid or otherwise received by the General
Partner pursuant to Article V hereof).

               (g)  Each of the members of the General Partner shall be
severally, but not jointly, liable to the Partnership for any unpaid liability
of the General Partner determined pursuant to this Paragraph 8.2, based on their
relative distributions received from the General Partner. The Principals hereby
agree to obtain the written agreement of each member of the General Partner as
to the liability to the Partnership described in the preceding sentence.

          8.3. Liquidating Trust. In the discretion of the General Partner, any
               -----------------
Nonmarketable Securities and other assets that would otherwise be distributed to
the Partners pursuant to this Article VIII may be distributed to a trust
established for the benefit of the Partners for the purposes of holding and
liquidating such Nonmarketable Securities (and any other Partnership assets),
collecting amounts owed to the Partnership, and paying any contingent

                                      28.
<PAGE>

or unforeseen liabilities or obligations of the Partnership. The trustee of such
trust shall be the General Partner or other person appointed by a Two-Thirds in
Interest of the Limited Partners. During the term of the trust, any
Nonmarketable Securities held in the trust shall continue to be held until they
become Marketable Securities except to the extent otherwise determined by the
General Partner. Subject to the foregoing, the net assets of the trust shall be
distributed to the Partners from time to time, in the discretion of the General
Partner (or other trustee), in the same proportions as such assets would have
been distributed if they had continued to be held (and disposed of) by the
Partnership. The term of the trust shall be for no more than two years, subject
to two one-year extensions with the approval of Two-Thirds in Interest of the
Limited Partners.

                                  ARTICLE IX
                       FINANCIAL ACCOUNTING AND REPORTS

          9.1. Financial and Tax Accounting and Reports. The General Partner
               ----------------------------------------
shall cause the Partnership's tax returns and IRS Form 1065, Schedule K-1's, to
be prepared and delivered in a timely manner to the Limited Partners. The
General Partner shall use its best efforts to cause the Schedule K-1's for each
Fiscal Year to be delivered to the Limited Partners within ninety (90) days
after the end of the Fiscal Year. The books and records of the Partnership and
the General Partner shall be kept in accordance with the provisions of this
Agreement and otherwise in accordance with generally accepted accounting
principles consistently applied. The Partnership's financial statements for each
Fiscal Year shall be prepared in accordance with such principles consistently
applied and shall be audited at the end of each Fiscal Year by an independent
certified public accounting firm of recognized national standing selected by the
General Partner. The General Partner shall transmit to each Limited Partner as
soon as practicable after the close of each of the Partnership's Fiscal Years
(but in no event later than ninety (90) days after the end of each Fiscal Year),
beginning with the Fiscal Year ending December 31, 1999, the audited financial
statements of the Partnership accompanied by a report from the General Partner
to the Limited Partners, which shall include a status report on investments then
held, a valuation of each such investment, and a brief statement on the affairs
of the Partnership during the Fiscal Year then ended. In addition, the General
Partner shall, within a reasonable time following the completion of the report
referred to above and following reasonable notice to each Partner, hold an
annual meeting of the Partners at which the General Partner shall present the
affairs of the partnership and provide the Limited Partners with the opportunity
to ask questions and discuss the Partnership's affairs.

          9.2. Valuation of Securities and Other Assets Owned by the
               -----------------------------------------------------
Partnership.
-----------

               (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, as determined by the General Partner in its
discretion. In determining the value of the interest of any Partner or in any
accounting between the Partners, no value shall be placed on the goodwill or the
name of the Partnership.

                                      29.
<PAGE>

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

                    (1)  Securities not subject to legal or contractual
     restrictions on free marketability:

                         (A)  If traded on one (1) or more securities exchanges
          or on NASDAQ, the value of each Security shall be deemed to be the
          average closing price of such Security for the five (5) trading days
          immediately preceding the valuation date 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 for the five (5) trading days immediately preceding the
          valuation date.

                         (C)  If there is no active public market, the General
          Partner shall make a determination of the fair market value on the
          valuation date, taking into consideration the tax basis of the
          Securities, developments concerning the issuing company subsequent to
          the acquisition of the 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 General Partner and
          such other factor or factors as the General Partner 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 9.2(b)(1) above shall be made to
     reflect the effect of the restrictions on transfer.

                    (3)  If the General Partner in good faith determines that,
     because of special circumstances, the valuation methods set forth in this
     paragraph do not fairly determine the value of a Security, the General
     Partner shall make such adjustments or use such alternative valuation
     method as it deems appropriate.

          9.3. Supervision; Inspection of Books. Proper and complete books of
               --------------------------------
account of the affairs of the Partnership shall be kept under the supervision of
the General Partner at the principal office of the Partnership. Such books shall
be open to inspection by a Limited Partner, at any reasonable time, upon
reasonable notice, during normal business hours. A copy of a current list of
Partners, with telephone numbers, shall be provided to any Partner upon request.
The General Partner shall provide any Limited Partner with information
reasonably requested by such Limited Partner for any purpose reasonably related
to such Limited Partner's interest as a partner in the Partnership.

          9.4. Quarterly Reports. Beginning with the first Fiscal Quarter
               -----------------
commencing after the date of this Agreement, the General Partner shall transmit
to each Limited Partner within forty-five (45) days after the close of each of
the first three (3) Fiscal Quarters of each Fiscal Year, financial statements of
the Partnership prepared in accordance with the terms of this

                                      30.
<PAGE>

Agreement and otherwise in accordance with generally accepted accounting
principles from its books without audit and subject to year-end adjustments, a
valuation of each of the Partnership's investments, a valuation of the
Partnership interest of the Limited Partner (based upon the interest of the
Limited Partner in the Partnership's assets), the amount of each Partner's
Capital Account and a list of investments then held with a brief description of
each Portfolio Company.

          9.5.  Confidentiality. Each Limited Partner agrees to maintain the
                ---------------
confidentiality of the Partnership's records and affairs, agrees not to provide
to any other person copies of any financial statements, tax returns or other
records or reports provided or made available to such Limited Partner, and
agrees not to disclose to any other person any information contained therein
(including, without limitation, information respecting Portfolio Companies),
without the express prior written consent of the General Partner; provided, that
any Limited Partner may make disclosure and may provide financial statements,
tax returns and other records (i) to its accountants, internal and external
auditors, legal counsel, financial advisors and other fiduciaries and
representatives as long as it instructs such persons to maintain the
confidentiality thereof and not to disclose to any other person any information
contained therein, (ii) to potential transferees of such Limited Partner's
Partnership interest who agree in writing, for the benefit of the Partnership,
to maintain the confidentiality thereof, but only after reasonable advance
notice to the Partnership, (iii) if, and to the extent, required by law,
including judicial or administrative order (provided, that, to the extent
possible, the Partnership is given prior notice to enable it to seek a
protective order or similar relief), (iv) in order to enforce rights under this
Agreement, (v) to any regulatory body having jurisdiction over the Limited
Partner and such of its advisors as need to or customarily have access to such
information, and (vi) to any of its equity holders, provided that it shall use
all commercially reasonable efforts to cause such persons to observe the
provisions of this Paragraph 9.5.

                                   ARTICLE X
                               OTHER PROVISIONS

          10.1. Execution and Filing of Documents. The General Partner shall
                ---------------------------------
execute and file a Certificate of Limited Partnership conforming to the
requirements of the Delaware 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.

          10.2. Other Instruments and Acts.  The Partners agree to execute any
                --------------------------
other instruments or perform any other acts that are or may be necessary to
effectuate and carry on the partnership created by this Agreement.

          10.3. Binding Agreement.  This Agreement shall be binding upon the
                -----------------
transferees, successors, assigns, and legal representatives of the Partners.

          10.4. 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.

          10.5. Notices. Any notice or other communication that a Partner
                -------
desires to give to another Partner shall be in writing, and shall be deemed
effectively given upon personal

                                      31.
<PAGE>

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 Partner at the address shown on Exhibit A or at such
other address as a Partner may designate by fifteen (15) days' advance written
notice to the other Partners.

          10.6.  Power of Attorney. By signing this Agreement, each Limited
                 -----------------
Partner designates and appoints the General Partner 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 Partnership by the laws of the United States of America, the laws of the
State of Delaware, or any other state in which the Partnership shall conduct its
investment activities in order to qualify or otherwise enable the Partnership to
conduct its affairs in such jurisdictions; provided, however, that in no event
shall the General Partner be deemed to have the authority under this Paragraph
10.6 to take any action that would result in any Limited Partner losing the
limitation on liability afforded hereunder. Such attorney is not hereby granted
any authority on behalf of the Limited Partner to amend this Agreement except
that as attorney for each Limited Partner, the General Partner shall have the
authority to amend this Agreement and the Certificate of Limited Partnership as
may be required to effect:

                 (a) Admissions of additional partners pursuant to Paragraph 7.6
or 7.7 above; or

                 (b) Transfers of Limited Partnership interests pursuant to
Paragraph 7.7 above.

          10.7.  Amendment. This Agreement (and any exhibits to this Agreement)
                 ---------
may be amended only with the written consent of the General Partner and Majority
in Interest of the Limited Partners. No amendment shall, however, (i) increase
the Capital Commitment of a Limited Partner or modify the allocation of Capital
Transaction Gain or Loss or Net Income or Loss or the distributions allocable to
any Limited Partner without the written consent of such Limited Partner, (ii)
increase the Management Fee or alter or waive the terms of Paragraph 8.2 without
the unanimous consent of the Limited Partners, (iii) alter or waive the terms of
this Paragraph 10.7(a), or (iv) alter or waive the terms of Paragraphs 7.6,
10.14, or 10.17 without the written consent of each affected Limited Partner.
Any proposed amendment that would change the requisite percentage of Limited
Partner interests required to take any action shall require the approval of such
existing requisite percentage. The General Partner shall promptly furnish copies
of all amendments to this Agreement and the Partnership's Certificate of Limited
Partnership to all Partners.

          10.8.  Effective Date. The Limited Partnership Agreement shall be
                 --------------
effective on the date set forth in the first paragraph of this Agreement.

          10.9.  Entire Agreement.  This Agreement constitutes the entire
                 ----------------
agreement of the Partners and supersedes all prior agreements between the
Partners with respect to the Partnership.

          10.10. 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.

                                      32.
<PAGE>

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

               10.12. Exculpation. Neither the General Partner, nor its members,
                      -----------
employees or affiliates shall be liable to a Limited Partner or the Partnership
for honest mistakes of judgment, or 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 Partnership, or for losses due to such mistakes, action, or
inaction, or to the negligence or dishonesty of any employee, broker, or other
agent of the Partnership or the General Partner, provided that such employee,
broker, or agent was selected, engaged or retained and supervised with
reasonable care. This Paragraph 10.12 shall not extend to any action which
constitutes fraud, willful misconduct or gross negligence. The General Partner
may consult with counsel and accountants in respect of Partnership 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 10.12 and of
Paragraph 10.13 hereof shall not be construed so as to relieve (or attempt to
relieve) any person of any liability by reason of recklessness or intentional
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 10.12 and of Paragraph 10.13
to the fullest extent permitted by law.

               10.13. Indemnification. The Partnership agrees to indemnify, out
                      ---------------
of the assets of the Partnership only, the General Partner, the members of the
General Partner and their agents, employees and affiliates (and each such
person's heirs and legal and personal representatives) 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 claims, actions, or demands against the General Partner, the members of
the General Partner, the Partnership, or their agents or affiliates to the
extent that they arise out of or in any way relate to the Partnership, 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 (if recommended by attorneys
for the Partnership) of any such claim, action or demand; provided, however,
that this indemnity shall not extend to any action which constitutes fraud,
willful misconduct or gross negligence. Any person receiving an advance with
respect to expenses shall be required to agree to return such advance to the
Partnership 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 Partnership has an investment, as the case may be. No payment or
advance may be made to any person under this Paragraph 10.13 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 Partnership.

               10.14. Limitation of Liability of the Limited Partners. No
                      -----------------------------------------------
Limited Partner shall be bound by, nor be personally liable for, the expenses,
liabilities, or obligations of the Partnership in excess of the balance of such
Partner's Capital Commitment to the Partnership.

                                      33.
<PAGE>

               10.15. Arbitration. Any controversy or claim arising out of or
                      -----------
relating to this Agreement, or the breach hereof, 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.

               10.16. Tax Matters Partner. The General Partner shall be the
                      -------------------
Partnership's Tax Matters Partner ("TMP"). The TMP may be removed by Two-Thirds
                                    ---
in Interest of the Limited Partners. Upon the removal, dissolution or Bankruptcy
of the TMP, a successor TMP shall be elected by Two-Thirds in Interest of the
Limited Partners. The TMP shall employ experienced tax counsel to represent the
Partnership in connection with any audit or investigation of the Partnership 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 incurred by the TMP in serving as the TMP shall be Partnership expenses
pursuant to Paragraph 5.2 and shall be paid by the Partnership. Notwithstanding
the foregoing, it shall be the responsibility of the General Partner and of each
Limited Partner, 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
Partners, then the TMP may, in its sole discretion, seek reimbursement from or
charge such fees and expenses to the Capital Accounts of those Partners on whose
behalf such fees and expenses were incurred. The TMP shall keep the Limited
Partners 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 Limited Partner, except
such notices or communications as are sent directly to such Partner by the IRS.
The relationship of the TMP to the Limited Partners is that of a fiduciary, and
the TMP has a fiduciary obligation to perform its duties as TMP in such manner
as will serve the best interests of the Partnership and all of the Partnership's
partners. To the fullest extent permitted by law, the Partnership agrees to
indemnify the TMP and its 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 General Partner
or the Partnership that arise out of or in any way relate to the TMP's status as
TMP for the Partnership, 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 determined (i) not to have been undertaken in good
faith to promote the best interests of the Partnership or (ii) to have
constituted recklessness, fraud, gross negligence or intentional wrongdoing by
the TMP.

               10.17. Taxation as Partnership. The General Partner, while
                      -----------------------
serving as such, agrees to use its best efforts to avoid taking any action that
would cause the Partnership to be classified as other than a partnership or to
be taxable as a corporation for federal income tax purposes. In the event the
Partnership should ever be taxable as a corporation, any resulting tax imposed
on the Partnership shall be treated as a reduction in Net Income or an increase
in Net Loss.

               10.18. Deliveries of Opinions. In the event that any opinion is
                      ----------------------
required hereunder from a Limited Partner, the General Partner will reasonably
cooperate with such Limited Partner's counsel to provide factual information in
the possession of the General Partner which

                                      34.
<PAGE>

information is necessary to allow such counsel to provide the opinion. Any
expense related thereto shall be borne by such Limited Partner.

                                  ARTICLE XI

                    MISCELLANEOUS TAX COMPLIANCE PROVISIONS

               11.1.  Substantial Economic Effect. The provisions of Article IV
                      ---------------------------
and the other provisions of this Agreement relating to the maintenance of
Capital Accounts and procedures upon liquidation of the Partnership are intended
to comply generally with the provisions of Treasury Regulation Section 1.704-1,
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 General Partner shall
determine that such incorporation will result in economic consequences
inconsistent with the economic arrangement among the Partners as expressed in
this Agreement. In the event the General Partner 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 Partnership (or any
Partner's interest therein) are effected in order to comply with such
Regulations and other applicable tax laws, or to assure that the Partnership is
treated as a partnership for tax purposes, or to achieve the economic
arrangement of the Partners as expressed in this Agreement, then notwithstanding
Paragraph 10.7 hereof, the General Partner may make such modification, provided
that it is not likely to have more than an insignificant detrimental effect on
the tax consequences and total amounts distributable to any Limited Partner
pursuant to Articles VI and VIII as applied without giving effect to such
modification. The General Partner shall also (i) make any adjustments that are
necessary or appropriate to maintain equality between the Capital Accounts of
the Partners and the amount of Partnership capital reflected on the
Partnership'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 modifications 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 General Partner determines that such
adjustments or modifications shall not result in economic consequences
inconsistent with the economic arrangement among the Partners as expressed in
this Agreement.

               11.2.  Other Allocations. Notwithstanding the provisions of
                      -----------------
Article IV, the allocations provided therein shall be subject to the following
exceptions:

                      (a)  In the event any Partner's Capital Account has an
Unadjusted Excess Negative Balance (as defined in subparagraph (f)) at the end
of any Fiscal Year, such Partner will be reallocated items of Capital
Transaction Gain and Net Income for such Fiscal Year (and, if necessary, future
Fiscal Years) in the amount necessary to eliminate such Unadjusted Excess
Negative Balance as quickly as possible.

                      (b)  In the event any Partner unexpectedly receives any
adjustments, allocations or distributions described in Treasury Regulations
Sections 1.704-1(b)(2)(ii)(d)(4) through (d)(6), items of Capital Transaction
Gain and Net Income shall be specially allocated to

                                      35.
<PAGE>

such Partner's Capital Account in an amount and manner sufficient to eliminate,
to the extent required by Treasury Regulations Section 1.704-1(b)(2)(ii)(d), the
Excess Negative Balance (as defined in subparagraph (e)) in such Partner's
Capital Account created by such adjustments, allocations or distributions as
quickly as possible. This subparagraph (b) is intended to and shall in all
events be interpreted so as to constitute a "qualified income offset" within the
                                             -----------------------
meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(d).

                      (c)  A Partner's Capital Account shall not be allocated
any item of Capital Transaction Loss or Net Loss to the extent such allocation
would cause such Capital Account to have an Excess Negative Balance (as defined
in subparagraph (e)).

                      (d)  Any special allocations pursuant to this Paragraph
11.2 shall be taken into account as soon as possible in computing subsequent
allocations, so that over the term of the Partnership the net amount of any
items so allocated and the profit, gain, loss, income and expense and all other
items allocated to each Partner shall, to the extent possible, be equal to the
net amount that would have been allocated to each such Partner if such original
allocations pursuant to this Paragraph 11.2 had not occurred.

                      (e)  For purposes of this Paragraph 11.2, "Excess Negative
                                                                 ---------------
Balance" shall mean the excess of the negative balance in a Partner's Capital
-------
Account (computed with any adjustments which are required for purposes of
Treasury Regulations Section 1.704-1(b)(2)(ii)(d)) over the amount such Partner
is obligated to restore to the Partnership (computed under the principles of
Treasury Regulations Section 1.704-1(b)(2)(ii)(c)) inclusive of any addition to
such restoration obligation pursuant to application of the provisions of
Treasury Regulations Sections 1.704-2), or any successor provisions thereto.

                      (f)  For purposes of this Paragraph 11.2 "Unadjusted
                                                                ----------
Excess Negative Balance" shall have the same meaning as Excess Negative Balance,
-----------------------
except that the Unadjusted Excess Negative Balance of a Partner shall be
computed without effecting the reductions to such Partner's Capital Account
which are described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d).

               11.3.  Income Tax Allocations.
                      ----------------------

                      (a)  Except as otherwise provided in this Paragraph 11.3
or as otherwise required by the Code and the rules and Treasury Regulations
promulgated thereunder, Partnership income, gain, loss, deduction, or credit 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 Partnership shall, solely for tax
purposes, be allocated between the Partners so as to take account of any
variation between the adjusted basis of such property to the Partnership for
federal income tax purposes and its initial Book Value.

                      (c)  In the event the Book Value of any Partnership 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

                                      36.
<PAGE>

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.

               11.4.  Withholding. The Partnership shall at all times be
                      -----------
entitled to make payments with respect to any Partner in amounts required to
discharge any obligation of the Partnership to withhold or make payments to any
governmental authority with respect to any federal, state, local or other
jurisdictional tax liability of such Partner arising as a result of such
Partner's interest in the Partnership. Any such withholding payment shall be
charged to the Capital Account of the Partner subject to such withholding and
shall reduce the amounts otherwise distributable to such Partner hereunder.

                [Remainder of This Page Intentionally Left Blank]

                                      37.
<PAGE>

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

GENERAL PARTNER:                           E*TRADE VENTURES I, LLC, a Delaware
                                           limited liability company

                                           By /s/ THOMAS A. BEVILACQUA
                                              __________________________________

                                           Title: Managing Member

ORIGINAL LIMITED PARTNERS:                 E*TRADE GROUP INC.,

                                           By /s/ THOMAS A. BEVILACQUA
                                              __________________________________

                                           Title _______________________________

                                                 /s/ CHRISTOS M. COTSAKOS
                                           _____________________________________
                                                    Christos M. Cotsakos

                                                 /s/ THOMAS A. BEVILACQUA
                                           _____________________________________
                                                    Thomas A. Bevilacqua

ADDITIONAL LIMITED PARTNERS:               E*TRADE VENTURES I, LLC, a Delaware
                                           limited liability company, as their
                                           authorized attorney-in-fact

                                           By  /s/ THOMAS A. BEVILACQUA
                                              __________________________________

                                           Title: Managing Member

                                      38.
<PAGE>

The undersigned members of E*Trade Ventures I, LLC, hereby specifically
acknowledge their obligation pursuant to Paragraph 8.2(g) of the Agreement.

                                           E*TRADE GROUP, INC.

                                           By  /s/ THOMAS A. BEVILACQUA
                                              _________________________________

                                           Title:  _____________________________

                                                /s/ CHRISTOS M. COTSAKOS
                                           _____________________________________
                                                   Christos M. Cotsakos

                                                 /s/ THOMAS A. BEVILACQUA
                                            ____________________________________
                                                    Thomas A. Bevilacqua

                                      39.
<PAGE>

                                   EXHIBIT A

                        PARTNERS' CAPITAL COMMITMENTS;

                            PARTNERSHIP PERCENTAGES

<TABLE>
<CAPTION>
                                                                     Partnership
                                                     Capital         Percentage*
  Name                                            Commitment          (Rounded)
=================================================================================
<S>                                               <C>                <C>
  GENERAL PARTNER:

     E*Trade Ventures I, LLC                      $  350,000               0.35%

  LIMITED PARTNERS:

     E*Trade Group, Inc.                          25,169,800              25.08%

     Cotsakos Venture, LLC                         1,000,000               1.00%

     Thomas A. Bevilacqua                            500,000                .50%

     Other Limited Partners                       73,350,000              73.07%
        (Aggregate Interests)
                                          --------------------------------------

           TOTAL                               $ 100,369,800             100.00%
</TABLE>

__________________________

*  Actual Percentages are based on the relative amounts of the Partners' Capital
   Commitments.

                                      A-1
<PAGE>

                                   EXHIBIT B

                       SECURITIES CONTRIBUTED BY E*TRADE

<TABLE>
<CAPTION>
                                                        Approximate
   Company                   Agreed Fair Value*     Percentage of Company
   ======================================================================
   <S>                       <C>                    <C>
   PlanetRx.com, Inc.               $ 3,419,800             1.4%
   Webvan Group, Inc.                10,000,000             1.4%
   Equinix, Inc.                      3,500,000             1.5%
   LoanCity.com, Inc.                 8,250,000             8.1%
                             ------------------

                                    $25,169,800
</TABLE>

__________________________

* Agreed Fair Value equals E*Trade's cost basis in the listed securities.

                                      B-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00008-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00008-of-00352.parquet"}]]