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Sample Business Contracts

Member Contracts Agreement - The Advisory Board Co. and The Corporate Advisory Board Co.

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                           MEMBER CONTRACTS AGREEMENT

     THIS MEMBER CONTRACTS AGREEMENT, dated as of October 31, 1997 (the
"Agreement"), is made by and between THE ADVISORY BOARD COMPANY, a Maryland
corporation ("ABC") and THE CORPORATE ADVISORY BOARD COMPANY, a Delaware
corporation ("New AB").

                                    RECITALS
                                    --------

     A.  ABC and New AB have entered into a Distribution Agreement dated as of
October 31, 1997 (the "Distribution Agreement"), providing for the contribution
by ABC of the Transferred Business (as defined therein) to New AB (including
specifically assignment of the Member Contracts to New AB).

     B.  Following the Contribution, subject to the conditions set forth in the
Distribution Agreement, all issued and outstanding shares of capital stock of
New AB will be distributed (the "Distribution") to the Sole Stockholder.

     C.  In the interest of an orderly transition with respect to the transfer
of the Transferred Business to New AB and the continued administration of the
Member Contracts during the Pre-Renewal Period (as defined herein), New AB
desires to appoint ABC as its agent as hereinafter specifically provided for
certain purposes in connection with the Member Contracts and to receive certain
related services from ABC.

     The parties agree as follows:

     1.  Definitions. Unless the context otherwise requires, capitalized terms
         -----------
not otherwise defined herein shall have the respective meanings given to them in
the Distribution Agreement.

     2.  Agency.  New AB hereby appoints ABC as its agent to provide such
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administrative and accounting-related services and take all administrative and
accounting-related actions on behalf of New AB in connection with the Member
Contracts during the Term as may be necessary or advisable, including without
limitation, provision of such administrative services relating to the Member
Contracts as may be necessary or advisable (including processing of new Member
Contracts and renewals of existing Member Contracts), collection of payments
relating to Member Contracts and transmittal of such payments to New AB
(collectively, the "Agency Services").  ABC hereby accepts its appointment as
agent of New AB and agrees to provide the Agency Services as provided herein.
ABC shall provide each of the Agency Services with respect to the Member
Contracts in the manner and to the same general extent as such services have
been provided by ABC in connection with the Member Contracts before the
Contribution, except that all new Member Contracts and renewals of existing
Member Contracts shall processed in the name of New AB.

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<PAGE>

     3.  Term. Except with respect to Section 12, the term of this Agreement
         ----      
shall commence on the date hereof and terminate upon the earlier of (a) the last
date of the renewal or expiration of each Member Contract existing on the date
hereof or (b) at the end of the Transition Period. In addition, New AB shall
have the right to terminate an Agency Service or Agency Services upon sixty (60)
days prior written notice to ABC. Termination of one or more Agency Services by
New AB shall not affect the obligation of ABC to furnish all other Agency
Services for the remainder of the Term.

     4.  Cost.  Unless otherwise expressly agreed in writing executed by a duly
         ----                                                                 
authorized officer of ABC and New AB, the Agency Services shall be provided to
New AB at the costs specified for such services on Attachment 1 of the
Management Services Agreement.

     5.  Delegation. ABC may retain the services of such third parties, either
         ---------- 
by oral or written contract, as ABC may, from time to time, deem necessary or
appropriate to facilitate the expeditious discharge of ABC's responsibilities
hereunder.

     6.  Independence. All employees and representatives of ABC providing Agency
         ------------ 
Services to New AB will be deemed for purposes of all compensation and employee
benefits to be employees of ABC and not employees of New AB.  In performing such
Agency Services, such employees or representatives will be under the direction,
control and supervision of ABC (and not New AB) and ABC will have the sole right
to exercise all authority with respect to the employment (including termination
of employment), assignment and compensation of such employees and
representatives.  ABC shall be solely responsible for the payment of all payroll
and withholding taxes relating to its employees for services provided to New AB
during the Term.

     7.  Impracticability.  ABC shall not be required to provide any Agency
         ---------------- 
Service to the extent the performance or the provision of such Agency Service
becomes impracticable as a result of a cause or causes outside of the reasonable
control of ABC, or to the extent the performance of such Agency Service would
require ABC to violate applicable laws, rules or regulations or result in the
breach of any license, permit or applicable contract.

     8.  Additional Resources.  In providing the Agency Services, ABC shall not
         --------------------   
be obligated to: (i) hire any additional employees, (ii) maintain the employment
of any specific employee, or (iii) purchase, lease or license any additional
equipment or software.

     9.  Force Majeure. The obligations of ABC under this Agreement are subject
         -------------  
to conditions of force majeure, including an act of God, strike or walkout or
other labor dispute, act of a public enemy, war, revolution, riot, fire, storm,
flood, earthquake, embargo and any other cause which is not reasonably within
the control of the party affected thereby.

    10.  Nondisclosure.  In the event that, during the Term and in connection
         ------------- 
with a party's performance of its obligations hereunder, either party shall
receive information concerning the other party hereto which the receiving party
knows, or has reason to believe, is confidential or proprietary to the party to
whom such information relates, the party receiving such information shall take
all reasonable steps to (a) protect and hold such information in confidence and
prevent

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<PAGE>

its disclosure to third parties unless such third parties are under a duty of
confidentiality to the party to which such information relates; and (b) restrict
its use to those purposes consent to in writing by the party to whom such
information relates; provided, however, that the party receiving such
information shall not be required to protect or hold in confidence any
information or data which (i) is or becomes available to the public without the
fault of the receiving party, (ii) is independently developed by the receiving
party, (iii) is disclosed to the receiving party by a third party known to the
receiving party not to be under any duty of confidentiality to the party to whom
such information relates with respect to such information or (iv) except as may
otherwise be required by law. This Section 10 shall not limit the obligation of
the parties under the Distribution Agreement to provide access to records after
the date hereof.

     11.  Limitation on Liability. ABC's liability to New AB in connection with
          ----------------------- 
this Agreement and the Agency Services to be provided by ABC shall be limited to
actual damages arising from ABC's gross negligence or willful misconduct in the
performance of its duties and responsibilities hereunder; provided, however,
that, in no event shall ABC be liable for any incidental or consequential
damages.

     12.  Indemnity.
          ---------

          (a) ABC agrees to defend, indemnify and hold New AB and its officers,
directors, employees and agents harmless from and against all liabilities,
losses, claims, damages and expenses of any nature, including reasonable
attorneys' fees, that are reasonably incurred by New AB arising out of the
performance of the Agency Services hereunder, except where such liability, loss,
claim, damage or expense shall have been caused by New AB's gross negligence or
willful misconduct in the performance of its duties and responsibilities
hereunder.

          (b) New AB agrees to defend, indemnify and hold ABC and its officers,
directors, employees and agents harmless from and against all liabilities,
losses, claims, damages and expenses of any nature, including reasonable
attorneys' fees, that are reasonably incurred by ABC arising out of the
performance of the Agency Services hereunder, except where such liability, loss,
claim, damage or expense shall have been caused by ABC's gross negligence or
willful misconduct in the performance of its duties and responsibilities
hereunder.

     13.  Mutual Cooperation. ABC and New AB will provide each other with
          ------------------
information and assistance reasonably necessary to investigate, defend or
prosecute any claims, suits, charges, including but not limited to equal
employment opportunity, workers compensation, insurance and similar claims
brought by or against ABC or New AB relating to either of their businesses. This
provision shall survive termination of this Agreement.

     14.  Third Party Rights.  Nothing in this Agreement, express or implied, is
          ------------------                                                   
intended to confer upon any person (including, without limitation, employees),
other than the parties hereto and their respective successors and assigns, any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.

     15. Successor and Assigns. This Agreement shall inure to the benefit of and
         ---------------------
and be binding upon the respective successors and assigns of the parties hereto,
provided that

  

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<PAGE>
this Agreement may not be assigned by either of the parties hereto
without the prior written consent of the other.

     16.  Notices.  All notices and other communications required or permitted
          -------
to be given under this Agreement shall be in writing and shall be deemed to have
been duly given if delivered by hand or mailed, postage prepaid or by certified
or registered mail, and addressed to the applicable party at the respective
addresses set forth in the Distribution Agreement (or at such other address for
a party as shall be specified by a like notice).

     17.  Governing Law.  The validity, enforceability and performance of this
          -------------                                                      
Agreement shall be governed by and construed in accordance with the laws of the
State of Maryland (excluding its choice of law rules).

     18.  Entire Agreement. The parties intend that the terms of this Agreement,
          ----------------                                                 
including the attached schedules, shall be the final expression of their
agreement with respect to the subject matter hereof and may not be contradicted
by evidence of any prior or contemporaneous agreement.  The parties further
intend that this Agreement shall constitute the complete and exclusive statement
of its terms and that no extrinsic evidence whatsoever may be introduced in any
judicial, administrative or other legal proceedings involving this Agreement.

     19.  Counterparts.  This Agreement may be executed in counterparts, each
          ------------
of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.

     20.  Headings. The headings used in this Agreement are inserted for
          --------
convenience of reference only and shall not affect the meaning or interpretation
of any provision of this Agreement.

     21.  Amendments and Waivers.  This Agreement may not be amended except
          ----------------------
upon the written consent of all of the parties. By an instrument in writing, any
party may waive compliance by any other party with any term or provision of this
Agreement that such other party was or is obligated to comply with or perform,
provided, however, that such waiver shall not operate as a waiver of, or
estoppel with respect to, any other or subsequent failure. No failure to
exercise and no delay in exercising any right, remedy, or power hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, or power hereunder preclude any other or further exercise thereof
or the exercise of any other right remedy, or power provided herein or by law or
in equity. The waiver by any party of the time for performance of any act or
condition hereunder does not constitute a waiver of the act or condition itself.

     22.  Expenses. Whether or not the transactions contemplated in this
          --------                                                  
Agreement are consummated, unless specifically provided otherwise in this
Agreement (including all Schedules hereto), each party shall bear and pay all
expenses incurred by it or on its behalf in connection with the preparation of
this Agreement and consummation of the transactions described herein.

     23.  Severability.  If any provision of this Agreement, or the application
          ------------
thereof to any person, place or circumstance, shall be held by a court of
competent jurisdiction to be void,

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<PAGE>

invalid or unenforceable, the remainder of this Agreement and such provisions as
applied to other persons, places or circumstances shall remain in full force and
effect.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.


                              THE ADVISORY BOARD COMPANY,
                              a Maryland corporation
                                   
                              By:
                                   -----------------------------------

                              Its:
                                   -----------------------------------

                              THE CORPORATE ADVISORY BOARD COMPANY,
                              a Delaware corporation


                              By: 
                                   -----------------------------------

                              Its:
                                   -----------------------------------    

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