EXHIBIT 10.21


 


TOWNSEND ANALYTICS ASSISTANCE AGREEMENT


 


This Townsend Analytics Assistance Agreement (the “Agreement”) is made
and entered into this 7th day of January 1999 by and between Archipelago
Holdings, L.L.C., a Delaware limited liability company (the “Company”), and
Townsend Analtyics Ltd., an Illinois corporation (“Townsend Analytics”).


 


R  E  C  I
T  A  L  S


 


WHEREAS, the Company owns all of the limited liability company
interests of Archipelago, L.L.C., an Illinois limited liability company
(“Archipelago”), and Archipelago Services, L.L.C., a Delaware limited liability
company (“Services II” and, together with Archipelago, the “Subsidiaries”), and
will, directly or indirectly, own and operate an “electronic communications
network” as defined under Rules 11Ac1-1 and 11Ac1-4 under the Securities
Exchange Act of 1934, as amended.


 


WHEREAS, the Company desires to engage Townsend Analytics to provide
certain Assistance (as defined below) and Townsend Analytics desires to provide
such Assistance directly to the Company; and


 


WHEREAS, the Company and Townsend Analytics desire to set forth the
scope of the Assistance to be provided by Townsend Analytics to the Company,
the fees to be paid by the Company for such Assistance and certain other
matters;


 


NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties agree as follows:


 


ARTICLE I.


 


TERMS


 


1.1.
Subject to Article VI, this Agreement shall continue in force for six (6)
months from the date of the closing (the “Closing”) of the purchase by GS
Archipelago Investment, L.L.C. (“GS”) of a 24.528302% limited liability company
interest in the Company as contemplated by the Contribution Agreement, dated as
of the date hereof (the


 


“Contribution Agreement”), by and among the Company, GS, E*TRADE
Archipelago Holdings, L.L.C., GDP, Inc., Virago Enterprises, L.L.C., Gerald D.
Putnam, MarrGwen Townsend and Stuart Townsend, and the Purchase Agreement (as
defined in the Contribution Agreement) (the “Initial Term”), and for successive
six month periods thereafter unless either party gives written notice to the
other party of its intention not to renew this Agreement at least thirty days
prior to the expiration of any such six-month period.


 

















 


ARTICLE II.


 


ASSISTANCE


 


2.1.
Subject to the terms and conditions of this Agreement, Townsend Analytics shall
use its commercially reasonable efforts to provide to the Company and its
Subsidiaries in accordance with commercially reasonable standards such
assistance as is described on Schedule 2.1 hereto which the Company or its
Subsidiaries may from time to time reasonably request (the “Assistance”).


 


ARTICLE III.


 


FEES AND EXPENSES


 


3.1.
Payment for Assistance. (a) In consideration of the Assistance to be provided
to the Company by Townsend Analytics pursuant to this Agreement, the Company
will reimburse Townsend Analytics its actual out-of-pocket cost in providing
the Assistance each month during the Initial Term, with the first payment being
made on the date of this Agreement and each subsequent payment being made on or
before the tenth (10th) day of each subsequent month (a “Payment Date”). In the
event of any early termination of this Agreement by mutual agreement of the
parties or pursuant to Article VI hereof on a date that is not the last day
of a month, Townsend Analytics shall return to the Company a pro rata portion
of the fee paid with respect to the final month of this Agreement, based on the
number of days during such month in which this Agreement remains in effect and
the actual number of days in such month.


 


(b) In the event that this Agreement continues in effect beyond the
Initial Term, the parties shall negotiate in good faith (beginning sixty (60)
days prior to the commencement of each subsequent six month term) the fees to
be paid hereunder in order to compensate Townsend Analytics for Assistance to
be provided during each such subsequent term.\


 


3.2.
Expenses. In addition to the fees payable pursuant to Section 3.1 of this
Agreement, the Company shall reimburse Townsend Analytics for all reasonable
out-of-pocket expenses incurred by Townsend Analytics in connection with
Townsend Analytics’s provision of the Assistance hereunder, including, but not
limited to, travel expenses (including meals and lodging) of Townsend Analytics
personnel or outside consultants in connection with the provision of the
Assistance. The Company shall pay to Townsend Analytics the amount of any
reimbursable expenses within thirty (30) days of the Company’s receipt of an
invoice requesting payment for such expenses from Townsend Analytics.


 


3.3.
Taxes. Amounts specified in Section 3.1 are exclusive of all


 


2

















 


federal, state, municipal and other government excise, sales, use,
customs, gross receipts, value added, goods and services, consumption or other
similar taxes imposed on or obligations of the Company, now in force or enacted
in the future. In the event Townsend Analytics is required by law at any time
to collect or pay any such tax, Townsend Analytics shall charge the Company
such amount and the Company will promptly reimburse Townsend Analytics
therefor, including any additions, penalties or interest applicable thereto. In
lieu of such payment, the Company may provide Townsend Analytics with an exemption
certificate or other document acceptable to any applicable taxing authority,
provided such document is sufficient to cancel the relevant tax liability. This
Section 3.3 shall survive the termination of this Agreement.


 


ARTICLE IV.


 


REPRESENTATIONS AND WARRANTIES


 


The Company hereby represents and warrants to Townsend Analytics, and
Townsend Analytics hereby represents and warrants to the Company, as follows:


 


4.1.
Due Formation and Authority. It is duly formed, validly existing and in good
standing under the laws of the jurisdiction of its organization, having full
right, power and authority to enter into this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.


 


4.2.
Authorization and Validity of Agreement. It has taken all action necessary in
order to authorize, execute and deliver this Agreement and for it to consummate
the transactions contemplated hereby and to perform the acts contemplated on
its part hereunder. This Agreement is a valid and binding agreement of it
enforceable against it in accordance with its terms.


 


ARTICLE V.


 


LIMITATION OF LIABILITY


 


5.1.
Limitation of Liability; Remedies; Indemnification. (a) The Company
understands, acknowledges and agrees that neither Townsend Analytics or any of
its Affiliates, nor any partner, shareholder, member, officer, director,
manager, employee or agent of Townsend Analytics (collectively, the “Townsend
Analytics Persons”) shall have any liability arising out of or related to the
provision by Townsend Analytics of the Assistance, the Company’s use of the
Assistance or the results achieved by the Company from such use of the
Assistance, nor shall any such persons have any liability for any loss of
profit, loss of business or other damage whatsoever arising or resulting
directly


 


3

















 


or indirectly from the Assistance or the performance or non-performance
by Townsend Analytics of its duties under this Agreement or resulting directly
or indirectly from any failure of or inadequacy or error made by Townsend
Analytics, except to the extent caused by or resulting from the gross
negligence, willful misconduct or unlawful acts of Townsend Analytics or its
partners, shareholders, members, managers, directors, officers, employees or
agents. In no event shall Townsend Analytics have liability to the Company for
any loss or damage whatsoever resulting from any action taken by Townsend
Analytics at the express direction of any manager, member, director, officer,
employee or agent of the Company (it being understood that any such manager,
member, director, officer, employee or agent that is also a Townsend Analytics
Person or a manager of the Company designated by Virago Enterprises, L.L.C.,
Townsend Analytics or a Townsend Analytics Person shall not be deemed to be
providing any direction as a manager, member, director, officer, employee or
agent of the Company). The Company agrees that Townsend Analytics’s liability
for damages, if any, shall not in any event exceed the charges paid to Townsend
Analytics by the Company under this Agreement. No action, regardless of form,
arising out of any transaction under this Agreement may be brought by the
Company more than one year after the Company has knowledge or should reasonably
have had knowledge of the occurrence or omission that would give rise to the
cause of such action. For purposes of this Agreement, “Affiliate” shall mean
with respect to any Person (i) any other Person that directly or indirectly
through one or more intermediaries controls or is controlled by or is under
common control with such Person or (ii) any other Person owning or controlling
25% or more of the outstanding voting securities of or other ownership
interests in such Person.


 


(b) Notwithstanding any other provision of this Agreement, in no event
shall Townsend Analytics or any of its Affiliates, or any Townsend Analytics
Person, be liable for any special, incidental, indirect, consequential or
punitive damages of any kind, whether in tort (including negligence), contract
or otherwise, whether or not Townsend Analytics or any of its Affiliates, or
any Townsend Analytics Person, shall have been advised of or otherwise might
have anticipated the possibility of such damages, and the Company agrees not to
seek such damages.


 


(c) In any threatened, pending or completed action, suit or proceeding,
Townsend Analytics and each Townsend Analytics Person shall be fully protected
and indemnified and held harmless by the Company against all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
proceedings, costs, expenses and disbursements of any kind or nature whatsoever
(including, without limitation, reasonable attorneys’ fees, costs of
investigation, fines, judgments and amounts paid in settlement, actually
incurred by Townsend Analytics or a Townsend Analytics Person in connection
with such action, suit or proceeding) arising out of or related to the
provision of the Assistance provided for under this Agreement, or with respect
to any action or omission taken or suffered in good faith, other than
liabilities and losses resulting from the gross negligence, willful misconduct
or unlawful acts of Townsend Analytics or a Townsend Analytics Person.


 


4

















 


(d) The provisions of this Section 5.1 shall survive any
termination of this Agreement.


 


5.2.
Force Majeure. Neither Townsend Analytics nor any of its Affiliates, or any
Townsend Analytics Person, or the Company shall be liable or deemed to be in
default under any provision of this Agreement for any delay or failure to
perform under this Agreement or other interruption of the Assistance, or any
error or inaccuracy made by Townsend Analytics or any of its Affiliates, or any
Townsend Analytics Person, in connection with its provision of the Assistance
hereunder resulting directly or indirectly from any cause beyond the reasonable
control of Townsend Analytics, any Affiliates of Townsend Analytics, any
Townsend Analytics Person or the Company (as the case may be), including,
without limitation, Acts of God, war, fire, electrical failure, explosion,
earthquake, flood, elements, governmental order or regulation, acts of public
enemy, labor disputes, strikes, lockouts and failures or delays or failures
caused by third parties (including third party providers of services used in
connection with the Assistance).


 


ARTICLE VI.


 


TERMINATION


 


6.1.
The occurrence of the events listed below will create rights to terminate this
Agreement, without the need for any judicial or extrajudicial notification:


 


(i) if one party fails to comply with the contractual obligations
established herein, and fails to cure such breach within a period of thirty
(30) days from the date on which the breaching party receives written notice
from the non-breaching party regarding such breach, the non-breaching party
shall have the right to terminate this Agreement;


 


(ii) if one party enters judicial or extrajudicial liquidation,
reorganization proceedings, or files for bankruptcy, the other party shall have
the right to terminate this Agreement;


 


(iii) if one party transfers its rights or obligations under this
Agreement, in whole or in part in violation of Section 7.3, the other
party shall have the right to terminate this Agreement;


 


(iv) if the parties cannot agree on a fee as provided in
Section 3.1(b) of this Agreement for any term


 


5

















 


beyond the Initial Term, either party shall have the right to terminate
this Agreement from and after the end of such term;


 


(v) if the obligations under this Agreement are suspended due to an act
or event of force majeure as described in Section 5.2 of this Agreement
for a period of more than ninety (90) days, either party shall have the right
to terminate this Agreement;


 


(vi) if the Closing shall not have occurred on or prior to the date
that is 90 days from the date hereof; and


 


(vii) upon mutual agreement of the parties to this Agreement, this
Agreement will terminate.


 


ARTICLE VII.


 


MISCELLANEOUS


 


7.1.
Notices. Unless otherwise specified in this Agreement, all notices, demands,
elections, requests or other communications that any party to this Agreement
may desire or be required to give hereunder shall be in writing and shall be
given by hand, by facsimile or by a recognized overnight courier service
providing confirmation of delivery, addressed as follows:


 


(a)          to
the Company:


 


Archipelago Holdings, L.L.C.


100 South Wacker Drive


20th Floor


Chicago, Illinois 60606


Telecopy:  (312) 621-0487


Attn: Gerald D. Putnam


 


(b)         to
Townsend Analytics:


 


Townsend Analytics, Ltd.


100 South Wacker Drive


Suite 2040


Chicago, Illinois 60606


Telecopy:  (312) 960-1369


Attn:  Stuart or MarrGwen
Townsend


 


All notices given pursuant to this Section 7.1 shall be deemed to
have been given (i) if delivered by hand on the date of delivery or on the date
delivery was refused by the addressee or (ii) if delivered by facsimile, when
transmitted to the applicable number so specified in (or pursuant to) this
Section 7.1 and an appropriate answerback is received or (iii) if
delivered by overnight courier, on the date of delivery as established by the
courier service


 


6

















 


confirmation (or the date on which the return receipt or courier
service confirms that acceptance of delivery was refused by the addressee).


 


7.2.
Independent Contractor Status. Nothing contained herein shall be deemed or
understood to create a partnership, association, or joint venture relationship
between the Company and Townsend Analytics or any of its Affiliates. For all
purposes hereunder, the parties intend that Townsend Analytics shall be deemed
to be an independent contractor, performing the specific Assistance provided
hereunder.


 


7.3.
Successors and Assigns. This Agreement shall be binding on the parties hereto
and their respective successors and assigns. No assignment or transfer of this
Agreement or any rights or responsibilities hereunder by either party is
permitted without the express written consent of the other party and any purported
assignment without such consent shall be void.


 


7.4.
Headings and Captions. All headings and captions contained in this Agreement
and the table of contents hereto are inserted for convenience only and shall
not be deemed a part of this Agreement.


 


7.5.
Variance of Pronouns. All pronouns and all variations thereof shall be deemed
to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person or entity may require.


 


7.6.
Counterparts. This Agreement may be executed in two or more separate
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one Agreement.


 


7.7.
Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.


 


7.8.
Binding Effect; Benefit. This Agreement shall inure to the benefit of and be
binding upon Townsend Analytics and the Company and their respective heirs,
executors, administrators, successors, legal representatives and permitted
assigns. Nothing in this Agreement, expressed or implied, is intended to confer
on any Person other than Townsend Analytics and the Company and their
respective heirs, executors, administrators, successors, legal representatives
and permitted assigns, any rights, remedies, obligations or liabilities under
or by reason of this Agreement.


 


7.9.
Amendment; Waiver. No provision of this Agreement may be amended, waived or
otherwise modified except by an instrument in writing executed by Townsend
Analytics and the Company.


 


7.10.
Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder


 


7

















 


of this Agreement. If a provision of this Agreement is held to be
invalid and the rest of this Agreement is not invalidated, each party shall use
all reasonable efforts to effect as far as practicable and valid under
applicable law a new provision to achieve the purpose of such invalidated
provision.


 


7.11.
Expenses. Without prejudice to its ability to recover for any losses, damages
or liabilities relating to any dispute, controversy or claim arising out of or
relating to this Agreement and except as provided in Section 3.2 of this
Agreement, each of Townsend Analytics and the Company shall pay its own
expenses in connection with this Agreement and any amendments, consents or
waivers (whether or not the same become effective) under or in respect of this
Agreement.


 


7.12.
Survival of Representations and Warranties. The representations and warranties
of the parties contained in this Agreement shall survive the execution and
delivery of this Agreement until the expiration of the applicable statutes of
limitation. The covenants, undertakings and agreements contained in this
Agreement shall survive without limitation.


 


7.13.
Entire Agreement. This Agreement together with all Schedules to this Agreement
supersede all prior agreements among the parties with respect to the subject
matter hereof and contain the entire Agreement among the parties with respect
to such subject matter.


 


7.14.
ARBITRATION. (a) In the event that a party (the “Complaining Party”) has a
dispute or disagreement with any other party relating to this Agreement which
it believes may constitute a breach by such other party of a provision of this
Agreement, such Complaining Party shall provide written notice to the other of
the foregoing and request a meeting to discuss such dispute or disagreement.
The parties shall thereafter meet and discuss such dispute or disagreement in
good faith, without obligation but with the objective of seeking an amicable
resolution satisfactory to each of the parties. If such dispute or disagreement
cannot be resolved after the good faith efforts of the applicable parties, then
any such party may deliver notice to initiate arbitration in accordance with
this Section 7.14; provided, however, that no party to this Agreement
shall initiate arbitration in respect of such dispute or disagreement (but only
with respect to such dispute or disagreement) until thirty (30) days have
passed from the date that such written notice is first given unless such party
believes, in good faith, that any delay in initiating such arbitration may
cause it irreparable harm. Thereafter, any unresolved controversy or claim
arising out of or relating to this Agreement, or the breach thereof, shall be
settled by arbitration. Each of the parties agrees to follow the procedures,
and abide by the requirements, set forth in this Section 7.14.


 


(b) Arbitration shall be final and binding on the parties. The parties
acknowledge that pre-arbitration discovery is generally more limited than and
different from court proceedings, the arbitrators’ award is not required to
include factual findings or legal reasoning and any party’s right to appeal or


 


8

















 


to seek modification of rulings by the arbitrators is strictly limited.
The panel of arbitrators shall include arbitrators who were or are affiliated
with the securities industry.


 


(c) Any arbitration shall be conducted only before the New York Stock
Exchange, Inc., the American Stock Exchange, Inc., the National Association of
Securities Dealers, Inc., or any other self-regulatory organization of which
Archipelago is a member. The complaining party seeking arbitration shall have
the right to elect one of the foregoing organizations, but if such party fails
to make such election by certified letter addressed to the other party to such
dispute, at the address set forth in Section 7.1 of this Agreement, within
ten days of delivery of the notice to initiate arbitration, then such other
party may make such election. Nothing in this Agreement shall be construed as
consent by any party to an award of punitive damages. The award of the
arbitrators, or the majority of them, shall be final, and judgment upon the
award rendered may be entered in any court, state or federal, having
jurisdiction.


 


(d) Nothing in this Section 7.14 shall be construed to preclude
any party to this Agreement from seeking injunctive or other relief in a court
of law where absent such relief such party would suffer irreparable harm.


 


IN WITNESS WHEREOF, the parties hereto have hereto set their hands as
of the day and year first written above.


 


	
   

  	
  TOWNSEND ANALYTICS, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/Stuart Townsend

  
	
   

  	
   

  	
  Name:

  	
  Stuart Townsend

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ARCHIPELAGO HOLDINGS, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Gerald D. Putnam

  
	
   

  	
   

  	
  Name:

  	
    Gerald D. Putnam

  
	
   

  	
   

  	
  Title:

  	
    Chief Executive Officer

  



 


9

















 


 


Schedule 2.1


 


Townsend Analytics will provide the following services to the Company
and its Subsidiaries:


1.               Computer and router cabinet space,  power (with UPS), air  conditioning and security.


2.               Network infrastructure including
cabling,  switches, hubs, patch panels
and core router services.


3.               Software  installation and maintenance 
including  installing and
upgrading operating systems and Townsend Analytics software.


4.               Monitoring  systems.  All  Archipelago 
computers  will be  included in the Townsend Analytics inventory
and monitoring system. The inventory system is Microsoft  SMS. Two 
monitoring  systems are
used,  SMTPc and a proprietary system
developed by Townsend Analytics.


5.               Telecommunication  facilities such as rack space,  conduit and interconnect boards will be
provided. Shared access to the Townsend Analytics Sonet ring node will be
provided at cost.


6.               Qualified  personnel  will be
provided to  facilitate  all of the 
services described above.


 

















 


TABLE OF CONTENTS


 


	
  ARTICLE I.

  
	
   

  	
   

  	
   

  
	
  TERMS

  
	
   

  	
   

  	
   

  
	
  1.1

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II.

  
	
   

  	
   

  	
   

  
	
  ASSISTANCE

  
	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
   

  
	
  ARTICLE III.

  
	
   

  	
   

  	
   

  
	
  FEES AND EXPENSES

  
	
   

  	
   

  	
   

  
	
  3.1.

  	
  Payment
  for Assistance

  	
   

  
	
  3.2.

  	
  Expenses

  	
   

  
	
  3.3.

  	
  Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV.

  
	
   

  	
   

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES

  
	
   

  	
   

  	
   

  
	
  4.1.

  	
  Due
  Formation and Authority

  	
   

  
	
  4.2.

  	
  Authorization
  and Validity of Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V.

  
	
   

  	
   

  	
   

  
	
  LIMITATION OF LIABILITY

  
	
   

  	
   

  	
   

  
	
  5.1.

  	
  Limitation
  of Liability; Remedies; Indemnification

  	
   

  
	
  5.2.

  	
  Force
  Majeure

  	
   

  
	
   

  	
   

  	
   

  



 


(i)

















 


	
  ARTICLE VI.

  
	
   

  	
   

  	
   

  
	
  TERMINATION

  
	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII.

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
  7.1.

  	
  Notices

  	
   

  
	
  7.2.

  	
  Independent
  Contractor Status

  	
   

  
	
  7.3.

  	
  Successors
  and Assigns

  	
   

  
	
  7.4.

  	
  Headings
  and Captions

  	
   

  
	
  7.5.

  	
  Variance
  of Pronouns

  	
   

  
	
  7.6.

  	
  Counterparts

  	
   

  
	
  7.7.

  	
  Governing
  Law

  	
   

  
	
  7.8.

  	
  Binding
  Effect; Benefit

  	
   

  
	
  7.9.

  	
  Amendment;
  Waiver

  	
   

  
	
  7.10.

  	
  Severability

  	
   

  
	
  7.11.

  	
  Expenses

  	
   

  
	
  7.12.

  	
  Survival
  of Representations and Warranties

  	
   

  
	
  7.13.

  	
  Entire
  Agreement

  	
   

  
	
  7.14.

  	
  ARBITRATION

  	
   

  



 


(ii)