Exhibit
10.6


 


 


FORM OF INDEMNIFICATION AGREEMENT


 


 


THIS INDEMNIFICATION
AGREEMENT (this “Agreement”) is made and entered into as of the 10th day of
February 2004, by and between Archipelago Holdings, L.L.C., a Delaware
limited liability company (“Archipelago LLC”) and each of the Indemnitees
listed on the signature pages to this agreement (each, an “Indemnitee”, and
collectively, the “Indemnitees”) as such signature pages may be amended and
supplemented from time to time.


 


RECITALS


 


WHEREAS, the Board of Managers
(the “Board”) of Archipelago LLC has determined that conditions are favorable
for Archipelago LLC to make an initial public offering (the “IPO”) and that, to
facilitate such IPO, Archipelago LLC should be reorganized as a Delaware
corporation;


 


WHEREAS, the Board of
Archipelago LLC has determined that Archipelago LLC should be converted (the
“Conversion”) into a Delaware corporation (the “Successor Corporation”)
pursuant to Section 18-216 of the Delaware Limited Liability Company Act
and Section 265 of the Delaware General Corporation Law by filing a
Certificate of Conversion and a Certificate of Incorporation of Archipelago
Holdings, Inc. (“Archipelago Inc.”, also referred to herein as the Successor
Corporation) with the Secretary of State of the State of Delaware and, as part
of the formation of the Successor Corporation, that GAP Archa Holdings, Inc.
should merge (the “Merger”) with and into Archipelago Inc. (the Conversion and
the Merger, collectively referred to herein as the “Reorganization”);


 


WHEREAS, Archipelago LLC
proposes to file registration statements (the “Registration Statements”) with
the Securities and Exchange Commission for the public offering and sale of
shares of common stock of the Successor Corporation (including shares issuable in
connection with employee benefit plans);


 


WHEREAS, Archipelago LLC
has requested and Archipelago LLC and the Successor Corporation will request
certain of the Indemnitees to execute the Registration Statements in the
capacity or capacities listed and to be listed in such Registration Statements;


 


WHEREAS, each Indemnitee
(i) is an officer or a manager of Archipelago LLC; (ii) will be an officer or
director of Archipelago Inc. and/or (iii) is or will be a person requested or
authorized by the board of managers of Archipelago LLC or by the board of
directors of Archipelago Inc. to take actions on behalf of Archipelago LLC or
Archipelago Inc., as the case may be, in connection with the Registration
Statements or the Reorganization; and


 

















 


WHEREAS, the parties
hereto intend that, upon the Conversion, the Successor Corporation will assume
Archipelago LLC’s obligations under this Agreement with respect to matters
occurring both before and following the Conversion and that, upon the
Conversion, each reference herein to Archipelago LLC shall be understood to
refer to the Successor Corporation.


 


AGREEMENT


 


NOW, THEREFORE, in
consideration of each Indemnitee’s acting and agreeing to act in the capacities
referred to above, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties do hereby agree
as follows:


 


1.                                       General.  Archipelago LLC (A) will indemnify and
hold harmless each Indemnitee against any Losses (as hereinafter defined),
joint or several, to which such Indemnitee may become subject, under the
Securities Act of 1933, as amended (the “Act”) or otherwise, insofar as such
Losses (or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statements or any related Rule 462(b) Registration Statements or
any preliminary prospectus or prospectus comprising a part thereof, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, that Archipelago LLC shall not be liable in any such case
to the extent that any such Losses arise out of or are based upon an untrue
statement or alleged untrue statement or omission or alleged omission relating
to such Indemnitee made in any preliminary prospectus, any registration
statement or any prospectus or any amendment or supplement in reliance upon and
in conformity with written information relating to such Indemnitee furnished to
Archipelago LLC by such Indemnitee expressly for use therein; and (B) will
indemnify and hold harmless each Indemnitee against any Losses (or actions in
respect thereof) which otherwise arise out of or are based upon or asserted
against such Indemnitee in connection with such Indemnitees’ acting in the
capacities referred to above in connection with the transactions contemplated
by the Reorganization, except to the extent any such Losses referred to in this
clause (B) arise out of or are based upon the type of conduct for which
(x) a director would not be exempt from liability or (y) the
indemnification of a director would be limited in respect of such Losses, in
the case of (x) and (y), within the meaning of Section 102(b)(7) of the
Delaware General Corporation Law (whether or not such Indemnitee is a director)
or, after the filing of a certificate of incorporation of Archipelago Inc., the
indemnification provision or provisions thereof as the same may be in effect
from time to time.


 


Notwithstanding the
foregoing provision of this Section 1, Archipelago LLC and each Indemnitee
agree that insofar as indemnification for liabilities arising under the Act may
be permitted under this Agreement to an Indemnitee who is a director, officer
or controlling person of Archipelago LLC, in the event that a claim for
indemnification 


 


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against such liabilities
is made by such an Indemnitee (other than the payment by Archipelago LLC of
expenses incurred or paid by such Indemnitee in the successful defense of any
action, suit or proceeding) in connection with a Registration Statement,
Archipelago LLC will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act, and Archipelago LLC and such Indemnitee will be governed
by the final adjudication of such question.


 


2.                                       Losses.  As used in this Agreement, the term “Losses”
shall include, without limitation, damages, losses, claims, judgments,
liabilities, fines, penalties, excise taxes, settlements, and costs, attorneys’
fees, accountants’ fees, and disbursements and costs of attachment or similar
bonds, investigation costs, defense preparation costs, costs of preparing for
and presenting evidence or testimony, and any expenses of establishing a right
to indemnification under this Agreement. 
The term “Losses” shall not include taxes except to the extent taxes are
imposed in respect of payments otherwise made pursuant to this Agreement, in
which case such Indemnitee’s Losses shall include an amount not greater than
the net taxes payable (taking into account any deductions or other tax benefits
available to such Indemnitee as a result of the Losses in respect of which such
payment is made).


 


3.                                       Enforcement.  Subject to the provisions of the second
paragraph of Section 1 hereof, if a claim or request by an Indemnitee
under this Agreement is not paid by Archipelago LLC or on its behalf, within
thirty (30) days after a written claim or request has been received by
Archipelago LLC and, if applicable, the affirmation in Section 5 hereof
has been received by Archipelago LLC, such Indemnitee may at any time
thereafter commence an arbitration proceeding in accordance with Section 9
hereof against Archipelago LLC to recover the unpaid amount of the claim or
request, and if successful in whole or in part, such Indemnitee shall be
entitled to be paid also the expense of prosecuting such proceeding.  It shall be a defense to any such proceeding
(other than a proceeding commenced to enforce a claim for expenses incurred in
defending any actual or threatened proceeding in advance of its final
disposition where the required affirmation and undertaking, if any is required,
have been tendered to Archipelago LLC) that such Indemnitee has not met the
standards of conduct for Archipelago LLC to indemnify such Indemnitee herein
for the amount claimed, but the burden of proving such defense shall be on
Archipelago LLC.  Neither the failure of
Archipelago LLC (including its Board, legal counsel or shareholders) to have
made a determination prior to the commencement of such proceeding that
indemnification of such Indemnitee is proper in the circumstances because such
Indemnitee has met the applicable standard of conduct set forth herein, nor an
actual determination by Archipelago LLC (including its Board, legal counsel or
shareholders) that such Indemnitee has not met such applicable standard of
conduct, shall be a defense to the proceeding or create a presumption that such
Indemnitee has not met the applicable standard of conduct.


 


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4.                                       Partial
Indemnification.  If an Indemnitee
is entitled under any provision of this Agreement to indemnification by
Archipelago LLC for some or a portion of any Losses, but not for the total
amount thereof, Archipelago LLC shall nevertheless indemnify such Indemnitee
for the portion of such Losses to which such Indemnitee is entitled.


 


5.                                       Expenses.  Expenses incurred by an Indemnitee in
connection with any proceeding shall be paid by Archipelago LLC upon request of
such Indemnitee that Archipelago LLC pay such expenses, but only upon receipt
by Archipelago LLC of (i) a written affirmation of such Indemnitee’s good faith
belief that the applicable standard of conduct necessary for indemnification by
Archipelago LLC has been met, (ii) a written undertaking by or on behalf of
such Indemnitee to reimburse Archipelago LLC for expenses if and to the extent
that it is ultimately determined that the applicable standard of conduct has
not been met and (iii) satisfactory evidence of the amount of such expenses.


 


6.                                       Notice
of Claim.  Each Indemnitee shall
promptly notify Archipelago LLC in writing of any claim against such Indemnitee
for which indemnification will or could be sought under this Agreement.  In addition, each Indemnitee shall give
Archipelago LLC such information and cooperation as it may reasonably require
and as shall be within such Indemnitee’s power and at such times and places as
are not unduly burdensome for such Indemnitee.


 


7.                                       Defense
of Claim.  With respect to any
proceeding as to which an Indemnitee notifies Archipelago LLC of the
commencement thereof:


 


(a)                                  Archipelago
LLC will be entitled to participate at its own expense;


 


(b)                                 subject
to Section 7(c) hereof, Archipelago LLC shall not, in connection with any
proceeding or related proceedings in the same jurisdiction against any
Indemnitee and any other Indemnitees, be liable to such Indemnitee and such
other Indemnitees for the fees and expenses of more than one separate law firm
(in addition to a single firm of local counsel);


 


(c)                                  except
as otherwise provided below, to the extent that it may wish, Archipelago LLC
will be entitled to assume the defense thereof, with counsel reasonably
satisfactory to such Indemnitee, which in Archipelago LLC’s sole discretion may
be regular counsel to Archipelago LLC and may be counsel to other
Indemnitees.  The Indemnitees also shall
have the right to employ one separate counsel for such Indemnitees in such
action, suit or proceeding if such Indemnitees reasonably conclude that if they
did not there would be a conflict of interest between Archipelago LLC and such
Indemnitees, and under such circumstances the fees and expenses of such counsel
shall be paid by Archipelago LLC; and


 


(d)                                 Archipelago
LLC shall not be liable to indemnify an Indemnitee under this Agreement for any
amounts paid in settlement of any action or claim effected 


 


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without Archipelago LLC’s written consent.  Archipelago LLC shall not settle any action
or claim in any manner which would impose any cost or limitation on an
Indemnitee without such Indemnitee’s written consent.  Neither Archipelago LLC nor an Indemnitee will unreasonably
withhold or delay its consent to any proposed settlement.


 


8.                                       Non-exclusivity.  The right to indemnification and the payment
of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Agreement shall not be exclusive of or affected
in any way by any other right which an Indemnitee may have or hereafter may
acquire under any statute, certificate of incorporation, by-laws, agreement,
arrangement, resolution or instrument providing indemnification or expense
payment, except that any payments otherwise required to be made by Archipelago
LLC hereunder shall be offset by any and all amounts received by an Indemnitee
from any other Indemnitor or under one or more liability insurance policies
maintained by an Indemnitor or otherwise and shall not be duplicative of any
other payments received by an Indemnitee from Archipelago LLC in respect of the
matter giving rise to the indemnity hereunder. 
When an Indemnitee is entitled to indemnification, expense advancement
or reimbursement under this Agreement and any other agreement, arrangement,
resolution or instrument of Archipelago LLC, the Indemnitee may choose to
pursue it rights under one or more, but less than all, of such applicable
agreements, arrangements, resolutions or instruments, in which case such
Indemnitee need only comply with the standards and procedures of the
agreements, arrangements, resolutions or instruments under which it chooses to
pursue it rights.


 


9.                                       Arbitration.  (a) 
Subject to the provisions of the second paragraph of Section 1 and
Section 9(b) hereof, any dispute, controversy or claim between an
Indemnitee and Archipelago LLC arising out of or relating to or concerning the
provisions of this Agreement shall be finally settled by arbitration in
Chicago, Illinois before, and in accordance with the rules then obtaining of
the American Arbitration Association (the “AAA”) in accordance with the
commercial arbitration rules of the AAA.


 


(b)                                 Notwithstanding
the provision of Section 9(a) and in addition to its right to submit any
dispute or controversy to arbitration, Archipelago LLC may bring an action or
special proceeding in a state or federal court of competent jurisdiction
sitting in the State of Illinois, whether or not an arbitration proceeding has
theretofore been or is ever initiated, for the purpose of temporarily, preliminarily
or permanently enforcing the provisions of this Agreement or to enforce an
arbitration award, and, for the purposes of this Section 9(b), each
Indemnitee (i) expressly consents to the application of Section 9(c)
hereof to any such action or proceeding, (ii) agrees that proof shall not
be required that monetary damages for breach of the provisions of this
Agreement would be difficult to calculate and that remedies at law would be
inadequate and (iii) irrevocably appoints the General Counsel of
Archipelago LLC, c/o Corporation Service Company, 2711 Centerville Road, Suite
400, Wilmington, Delaware 19808 as such Indemnitee’s agent for service of
process in connection with any such action or proceeding, who shall promptly
advise such Indemnitee of any such service of process.


 


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(c)                                  (i)                                     Each
Indemnitee hereby irrevocably submits to the exclusive jurisdiction of any
state or federal court located in the State of Illinois over any suit, action
or proceeding arising out of or relating to or concerning this Agreement that
is not otherwise arbitrated according to the provisions of Section 9(a)
hereof.  This includes any
suit, action or proceeding to compel arbitration or to enforce an arbitration
award.  The parties acknowledge that the
forum designated by this Section 9(c) has a reasonable relation to this
Agreement, and to the parties’ relationship with one another.  Notwithstanding the foregoing, nothing
herein shall preclude Archipelago LLC from bringing any action or proceeding in
any other court for the purpose of enforcing the provisions of this
Section 9.


 


(ii)                                  The
agreement of an Indemnitee as to forum is independent of the law that may be
applied in the action, and each Indemnitee agrees to this forum even if the
forum may under applicable law choose to apply non-forum law.  Each Indemnitee hereby waives, to the
fullest extent permitted by applicable law, any objection which such Indemnitee
now or hereafter may have to personal jurisdiction or to the laying of venue of
any such suit, action or proceeding in any court referred to in
Section 9(c)(i).  The parties
undertake not to commence any action arising out of or relating to this
Agreement in any forum other than the forum described in this
Section 9(c).  The parties agree
that, to the fullest extent permitted by applicable law, a final and
non-appealable judgment in any such suit, action or proceeding in any such
court shall be conclusive and binding upon the parties.


 


10.                                 Binding
Effect.  This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns (including any direct or
indirect successor by merger or consolidation), heirs, executors and
administrators, including without limitation the Successor Corporation.  It is expressly acknowledged and understood
by the parties hereto that, upon the Conversion, the Successor Corporation will
assume this Agreement and Archipelago LLC’s obligations under this Agreement
with respect to matters occurring both before and following the Conversion and
each reference herein to Archipelago LLC shall be understood to refer to the
Successor Corporation.


 


11.                                 Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
without regard to conflict of law provisions thereof.


 


12.                                 Amendment.  Each party understands that from time to
time certain other persons may become Indemnitees and certain Indemnitees will
cease to be Indemnitees to the extent provided in this Section 12.  Accordingly, this Agreement may be amended
by action of Archipelago LLC from time to time to add additional Indemnitees,
without the approval of any other person other than such proposed Indemnitees,
each of whom shall execute a counterpart of the signature page of this
Agreement.  This Agreement may also 


 


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be amended by
action of Archipelago LLC and without the approval of any other person to
remove an Indemnitee; provided that such amendment shall not be
effective unless Archipelago LLC has provided 30 days prior written notice to
the Indemnitee and, in any event, such amendment shall not affect any rights of
such Indemnitee to be indemnified in respect of Losses associated with the
acts, omissions or status of such Indemnitee through the effective date of such
termination (including the right to subsequent indemnification and expense
advancement and reimbursement relating to such acts, omissions or status).


 


13.                                 Waiver
of Breach.  The failure or delay of
a party at any time to require performance by any other party of any provision
of this Agreement, even if known, shall not affect the right of such party to
require performance of that provision or to exercise any right, power, or
remedy hereunder, and any waiver by any party of any breach of any provision of
this Agreement shall not be construed as a waiver of any continuing or
succeeding breach of such provision, a waiver of the provision itself, or a
waiver of any right, power, or remedy under this Agreement.  No notice to or demand on any party in any
case shall, of itself, entitle such party to other or further notice or demand
in similar or other circumstances.


 


14.                                 Severability.  Archipelago LLC and each Indemnitee agree
that the agreements and provisions contained in this Agreement are severable
and divisible, that each such agreement and provision does not depend upon any
other provision or agreement for it enforceability, and that each such
agreement and provision set forth herein constitutes an enforceable obligation
between Archipelago LLC and such Indemnitee. 
Consequently, Archipelago LLC and each Indemnitee hereto agrees that
neither the invalidity nor the unenforceability of any provision of this
Agreement shall affect the other provisions hereof, and this Agreement shall
remain in full force and effect and be construed in all respects as if such
invalid or unenforceable provision were omitted.


 


15.                                 No
Presumption.  The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that an Indemnitee did not meet the applicable standard of conduct
for indemnification under this Agreement.


 


16.                                 Notices.  Any communication, demand or notice to be
given hereunder will be duly given when delivered in writing by hand or first
class mail to Archipelago LLC at its principal executive office or to an
Indemnitee at its last address appearing in the business records of Archipelago
LLC (or to such other addresses as a party may designate by written notice to
Archipelago LLC).


 


17.                                 No
Assignments.  No Indemnitee may
assign its rights or obligations under this Agreement without the prior written
consent of Archipelago LLC.


 


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18.                                 No
Third Party Rights.  Nothing
expressed or referred to in this Agreement will be construed to give any person
other than the parties to this Agreement any legal or equitable right, remedy
or claim under or with respect to this Agreement or any provision of this
Agreement.  This Agreement and all of
its provisions are for the sole and exclusive benefit of the parties to this
Agreement and their successors and permitted assigns, including without
limitation the Successor Corporation.


 


19.                                 Counterparts.  This Agreement may be executed (including by
facsimile transmission) in any number of counterparts, each of which shall be
deemed an original, but all such counterparts shall together constitute but one
and the same instrument.


 


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IN WITNESS WHEREOF, the
parties hereto have entered into this Agreement as of the date first written
above.


 


	
   

  	
  ARCHIPELAGO HOLDINGS,
  L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Kevin J. P.
  O’Hara

  
	
   

  	
   

  	
  Title: Authorized
  Person

  



 

















 


	
  Indemnitees:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Gerald D. Putnam

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Stuart Townsend

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Philip D. Defeo

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Duncan Niederauer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Joseph Barra

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Lawrence Leibowitz

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Craig Messinger

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Alan Freudenstein

  	
   

  



 

















 


	
   

  	
   

  
	
  Onuoha Odim

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Jeffrey Wecker

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  William Cruger

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  William E. Ford

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Michael Cormack

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Nelson Chai

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Kevin J.P. O’Hara

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Steven Rubinow

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  MarrGwen Townsend