EXHIBIT 10.11


 


Archipelago Holdings L.L.C


100 South Wacker Drive


20th Floor


Chicago, Illinois 60606


 


 


January 17, 2002


 


Spear, Leeds
& Kellogg, L.P.


120 Broadway


New York, New
York 10271


Attn:  General Counsel


 


Dear Sirs:


 


Reference is
made to the Clearing Agreement, dated as of January 7, 2002 (the “REDI Clearing
Agreement”), between REDIBook ECN LLC (“REDI”) and Spear, Leeds & Kellogg,
L.P. (“SLK”), and the Clearing Agreement, dated as of January 7, 2002, between
Archipelago, L.L.C. (“Archipelago ECN”) and SLK (the “Archipelago Clearing
Agreement,” and together with the REDI Clearing Agreement, the “Clearing
Agreements”).


 


Archipelago
ECN currently acts as an “electronic communications network” as that term is
defined in the rules under the Securities Exchange Act of 1934 (the “ECN”) and
also provides various order routing services (the “Routing Services”).  In addition, the Archipelago ECN acts as an
introducing broker (the “Introducing Activities”) with respect to transactions
executed on the ECN and through the Routing Services.  In connection with the Introducing Activities, SLK will provide
clearing broker services to Archipelago ECN under the Archipelago Clearing
Agreement with respect to Equity Securities (as defined in the Archipelago
Clearing Agreement).


 


Each of
Archipelago Holdings, L.L.C. (the “Company”) and SLK (i) acknowledge that the
facts set forth in the previous paragraph are true, (ii) agree that if, after
the date hereof, (A) any subsidiary or subsidiaries of the Company (other than
REDI or Archipelago ECN) performs any of the Introducing Activities in respect
of Equity Securities with respect to transactions executed on the ECN or
through the Routing Services, or (B) any subsidiary or subsidiaries of the
Company (other than REDI or Archipelago ECN) engages in any of the Introducing
Activities in respect of Equity Securities with respect to transactions
executed on a national securities exchange or any facility thereof, then, SLK
and each subsidiary of the Company performing any of these -Introducing
Activities in respect of Equity Securities shall enter into a


 

















 


clearing agreement with the other upon substantially the same terms and
conditions set forth in the Archipelago Clearing Agreement so long as at such
time the Archipelago Clearing Agreement is in effect and has not been
terminated and neither party thereto has provided notice to the other of
termination thereof; and provided  further (i) the change in
arrangements shall not subject SLK to any material additional expenses or
difficulties and (ii) the change in arrangements shall not subject SLK to
increased reputational or credit concerns. SLK shall provide the Company with
evidence of such additional expenses or difficulties, and shall explain the
reasons for any increased reputational or credit concerns.


 


The Company
agrees that so long as the Archipelago Clearing Agreement is in effect and has
not been terminated, it shall, and shall cause any of its subsidiaries
performing Introducing Activities in respect of Equity Securities, however
traded, to, clear such Equity Securities through SLK pursuant to, and subject
to the terms of, a clearing agreement substantially similar to the Archipelago
Clearing Agreement:  provided
that for purposes of this sentence only, the term “Equity Securities” shall
exclude transactions, or agreements to the extent they address transactions, in
Equity Securities with direct institutional customers who use Archipelago ECN
or any other subsidiary of Archipelago Holdings, L.L.C. as their sponsoring
introducing broker and who either (i) settle on a DVP (delivery vs. payment)
basis or (ii) have a prime brokerage arrangement.


 


SLK agrees
that Section 13 of each of the Clearing Agreements shall not limit the
application of Section 3.2(d) of the Eighth Amended and Restated Limited
Liability Company Agreement of the Company, dated as of the date hereof, among
SLK and the other parties thereto to SLK, The Goldman Sachs Group, Inc. and
their respective subsidiaries and affiliates.


 


This letter
agreement in all respects shall be interpreted, construed and governed by and
in accordance with the laws of the State of New York without regard to the
conflict of law principles thereof.


 


If any
provision or condition of this letter agreement shall be held to be invalid or
unenforceable by any court or regulatory or self-regulatory agency or body,
such invalidity or unenforceability shall attach only to such provision or
condition.  The validity of the
remaining provisions and conditions shall not be affected thereby, and this letter
agreement shall be carried out as if any such invalid or unenforceable
provisions or conditions were not contained herein.


 


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


 


2

















 


If the foregoing is acceptable
to you, please execute a copy of this agreement in the space below, at which
time this instrument will constitute a binding agreement between us.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  ARCHIPELAGO HOLDINGS, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerald D. Putnam

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Gerald D. Putnam

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACCEPTED AND AGREED as of

  	
   

  
	
  the date first above written:

  	
   

  
	
   

  	
   

  
	
  SPEAR, LEEDS & KELLOGG, LP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Duncan Niederauer

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Duncan Niederauer

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  
								



 


3