Sample Business Contracts


Management Contract - CMG @ Ventures III LLC and @Ventures Management LLC

Management Forms


                             CMG @ VENTURES III, LLC

                               MANAGEMENT CONTRACT

          THIS MANAGEMENT CONTRACT, between CMG @ Ventures III, LLC., a limited
liability company organized under the laws of the State of Delaware (the "LLC"),
and @Ventures Management, LLC, a limited liability company organized under the
laws of the State of Delaware (the "Company"), is dated as of September 4, 1998.
Capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to them in the Limited Liability Company Agreement
of the LLC (the "Limited Liability Company Agreement").

          WHEREAS, the LLC has been formed pursuant to the Limited Liability
Company Agreement for the purpose of making investments in Portfolio Companies;
and

          WHEREAS, the LLC wishes to engage the Company to provide certain
services to further the objectives and purposes of the LLC, and the Company is
willing to provide such services.

          NOW THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

          1. Services to be Rendered by the Company to the LLC. The Company will
provide the LLC with investment opportunities in Portfolio Securities meeting
the requirements of the Limited Liability Company Agreement. The Company shall
provide such assistance as the LLC may reasonably request in identifying,
evaluating, structuring, consummating, monitoring and disposing of potential
investments by the LLC. All investment decisions shall be made by the Managing
Member of the LLC on behalf of the LLC, and nothing in this contract shall be
construed to constitute the Company an agent of the LLC.

          2. Other Activities. It is understood and agreed that the Company may
have management, consulting, service or other contracts with other entities,
including companies in which the LLC invests. The LLC agrees that the Company
shall be free to pursue such opportunities~ and that the LLC shall have no
interest therein.

          3. Payment of Expenses. The Company, so long as this Contract is in
effect, shall be responsible for and shall pay all of its out-of-pocket expenses
and those of the Managing Member, including expenses which relate to salaries,
office space supplies and other facilities of their businesses. It is expected
that in the case of consummated investments, the Company will use its reasonable
best efforts to ensure that all the fees and expenses incurred by the LLC in
connection with identifying, evaluating, structuring and consummating such
investments will be paid by the Portfolio Company in which the investment was
made.

          4. The Management Fee. As full compensation for the services rendered
to the LLC hereunder and the expenses borne by the Company hereunder, during
the period ending four (4)




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years after the date hereof (the "Initial Payment Period"), the LLC shall pay
the Company a management fee equal to 2% per annum of the aggregate Capital
Commitments of all Members (such Capital Commitments being in the aggregate
amount of $55,762,673). The management fee shall be paid semi-annually in
advance commencing on the date hereof and continuing on the first days of each
February and August thereafter until termination of this Contract. Subsequent to
the end of the Initial Payment Period, the management fee will be equal to 1%
per annum of the aggregate Capital Commitments of all Members. The management
fee will be reduced by one-half during any period in which the Domestic Fund is
in a Continuity Mode as provided in Section 6.4 of the Domestic Fund Agreement
and to the extent that the Domestic Fund is placed in a Continuity Mode during
any period with respect to which the management fee has already been paid, such
reduction shall be reflected as a credit against the management fee to be paid
in the following semi-annual period.

          5. Set-Offs Against Management Fee. The Company, the Managing Member
and their respective Affiliates may receive management, directors', consulting
and other similar fees and compensation from companies in which the LLC invests,
provided that the amount of such fees and other compensation is reasonable in
relation to the work performed by the Company and bear a reasonable relation to
fees and compensation charged for similar work by third parties. One-half of
such fees and other compensation (referred to herein as "Shared Portfolio
Company Fees") shall be credited against the management fee payable by the LLC
and the Funds in proportion to their respective aggregate capital commitments.
In addition, any Break-up Fee paid to the LLC, the Managing Member, the Company
or their respective Affiliates shall be paid as follows: An amount equal to the
aggregate unreimbursed fees and expenses paid by the LLC, the Managing Member,
the Company or their Affiliates which were specific to the transaction giving
rise to such Break-Up Fee shall be paid to each such entity in proportion to the
fees and expenses incurred by it. The balance of any such Break-Up Fee shall be
paid to the Company; provided that one-half of the remaining Break-Up Fee shall
be credited against the management fee payable by the LLC and the Funds in
proportion to their respective aggregate capital commitments. To the extent that
the sum of such Shared Portfolio Company Fees and Break-up Fees exceed the
management fee payable to the Company for any period, such excess shall be
credited against the management fee payable by the LLC and the Funds (in
proportion to their respective aggregate capital commitments) in subsequent
periods. In the event that such amounts exceed total future installments of the
management fee, they shall be paid to the LLC and the Funds (in proportion to
their respective aggregate capital commitments) and included as operating
receipts. A determination of the amount of the management fee set-off, if any,
shall be made semi-annually as of June 30 and January 31 of each calendar year
and any such amount shall be credited against the next installment of the
management fee otherwise payable.

          6. Term and Termination. This Contract shall become effective on the
date hereof and shall remain in full force and effect continuously thereafter
until the earlier to occur of (i) the date the LLC is wound up, its assets are
liquidated and it is dissolved, and (ii) the removal of @Ventures Partners III,
LLC as the general partner of the Domestic Fund. This Contract shall
automatically terminate, without the payment of any penalty, in the event of its
assignment by the Company without the consent of the LLC.

          7. Liability and Indemnification. The Company shall not be liable to
the LLC or any



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<PAGE>

Member for any act or omission taken or suffered by the Company in good faith
and in the belief that such act or omission is in or is not opposed to the best
interests of the LLC; provided that such act or omission is not in violation of
this Contract and does not constitute negligence, misconduct, fraud or a willful
violation of the law by the Company. The LLC agrees to indemnify, hold harmless
and release the Company and its respective agents, officers, employees,
directors and affiliates to the same extent that such indemnification is
provided to the Managing Member under Section 6.03 of the Limited Liability
Company Agreement.

          IN WITNESS WHEREOF, CMG@Ventures III, LLC and @Ventures Management,
LLC have caused this Contract to be executed, in one or more counterparts as of
the date first above written.

                            CMG @ VENTURES III, LLC

                            By: @Ventures Partners III, LLC, its Managing Member


                                By: /s/ Andrew J. Hajducky III
                                    --------------------------
                                    Name: Andrew J. Hajducky III
                                    Title: Managing Member

                            @VENTURES MANAGEMENT, LLC

                                By: /s/ Andrew J. Hajducky III
                                    --------------------------
                                Name: Andrew J. Hajducky III
                                Title: Managing Member

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