Exhibit
10.9


 




 





 


INDEMNIFICATION AGREEMENT


by and among


SOCIÉTÉ GÉNÉRALE,


SG AMERICAS SECURITIES
HOLDINGS, INC.,


COWEN AND COMPANY, LLC


and


COWEN GROUP, INC.


 


Dated as of                         ,
2006


 




 





 

















 


TABLE OF
CONTENTS


 


	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  I

  	
  DEFINITIONS

  	
   

  	
  1

  
	
  SECTION 1.01.

  	
  Definitions

  	
   

  	
  1

  
	
  ARTICLE II

  	
  MUTUAL RELEASES

  	
   

  	
  13

  
	
  SECTION 2.01.

  	
  Cowen Release of SG

  	
   

  	
  13

  
	
  SECTION 2.02.

  	
  SG Release of Cowen Inc

  	
   

  	
  13

  
	
  SECTION 2.03.

  	
  SG Obligations Not Affected

  	
   

  	
  14

  
	
  SECTION 2.04.

  	
  No Cowen Inc. Claims

  	
   

  	
  14

  
	
  SECTION 2.05.

  	
  No SG Claims

  	
   

  	
  14

  
	
  SECTION 2.06.

  	
  Subsidiary Releases

  	
   

  	
  14

  
	
  ARTICLE III

  	
   

  	
  INDEMNIFICATION

  	
   

  	
  14

  
	
  SECTION 3.01.

  	
  Indemnification by Cowen Inc

  	
   

  	
  14

  
	
  SECTION 3.02.

  	
  Indemnification by SG

  	
   

  	
  15

  
	
  SECTION 3.03.

  	
  Clarification of Intent

  	
   

  	
  16

  
	
  SECTION 3.04.

  	
  Indemnification Obligations Net of Insurance
  Proceeds and Other Amounts

  	
   

  	
  17

  
	
  SECTION 3.05.

  	
  Procedures for Indemnification of Third Party Claims

  	
   

  	
  17

  
	
  ARTICLE IV

  	
  CERTAIN OTHER MATTERS

  	
   

  	
  19

  
	
  SECTION 4.01.

  	
  Additional Matters

  	
   

  	
  19

  
	
  SECTION 4.02.

  	
  Right of Contribution.

  	
   

  	
  20

  
	
  SECTION 4.03.

  	
  Covenant Not to Sue

  	
   

  	
  20

  
	
  SECTION 4.04.

  	
  Remedies Cumulative

  	
   

  	
  20

  
	
  SECTION 4.05.

  	
  Inducement

  	
   

  	
  21

  
	
  SECTION 4.06.

  	
  Post-Separation Date Conduct

  	
   

  	
  21

  
	
  SECTION 4.07.

  	
  Late Payments

  	
   

  	
  21

  
	
  ARTICLE V

  	
  COOPERATION; CONFIDENTIALITY

  	
   

  	
  21

  
	
  SECTION 5.01.

  	
  Other Agreements Providing for Exchange of
  Information

  	
   

  	
  21

  
	
  SECTION 5.02.

  	
  Production of Witnesses; Records; Cooperation

  	
   

  	
  21

  
	
  SECTION 5.03.

  	
  Confidentiality.

  	
   

  	
  23

  
	
  SECTION 5.04.

  	
  Protective Arrangements

  	
   

  	
  23

  



 


i

















 


	
  ARTICLE
  VI

  	
  DISPUTE
  RESOLUTION

  	
   

  	
  24

  
	
  SECTION 6.01.

  	
  Disputes

  	
   

  	
  24

  
	
  ARTICLE VII

  	
  TERMINATION

  	
   

  	
  25

  
	
  SECTION 7.01.

  	
  Termination

  	
   

  	
  25

  
	
  ARTICLE VIII

  	
  MISCELLANEOUS

  	
   

  	
  25

  
	
  SECTION 8.01.

  	
  Counterparts; Entire Agreement; Facsimile Signatures

  	
   

  	
  25

  
	
  SECTION 8.02.

  	
  Governing Law

  	
   

  	
  25

  
	
  SECTION 8.03.

  	
  Assignability

  	
   

  	
  26

  
	
  SECTION 8.04.

  	
  Third Party Beneficiaries

  	
   

  	
  26

  
	
  SECTION 8.05.

  	
  Notices

  	
   

  	
  26

  
	
  SECTION 8.06.

  	
  Severability

  	
   

  	
  27

  
	
  SECTION 8.07.

  	
  Force Majeure

  	
   

  	
  27

  
	
  SECTION 8.08.

  	
  Headings

  	
   

  	
  27

  
	
  SECTION 8.09.

  	
  Survival of Covenants

  	
   

  	
  27

  
	
  SECTION 8.10.

  	
  Subsidiaries

  	
   

  	
  28

  
	
  SECTION 8.11.

  	
  Waivers

  	
   

  	
  28

  
	
  SECTION 8.12.

  	
  Amendments

  	
   

  	
  28

  
	
  SECTION 8.13.

  	
  Interpretation

  	
   

  	
  28

  
	
  SECTION 8.14.

  	
  Mutual Drafting

  	
   

  	
  28

  
	
  SECTION 8.15.

  	
  No Right to Set-Off

  	
   

  	
  29

  
	
  SECTION 8.16.

  	
  Enforcement Costs

  	
   

  	
  29

  
	
  SECTION 8.17.

  	
  Remedies

  	
   

  	
  29

  
					



 


ii

















 


THIS INDEMNIFICATION AGREEMENT, dated as of                             ,
2006, is by and among SOCIÉTÉ GÉNÉRALE, a French banking corporation (“SocGen”),
SG AMERICAS
SECURITIES HOLDINGS, INC., a Delaware corporation (“SGASH” and, together
with SocGen, “SG”), COWEN AND COMPANY, LLC, a Delaware limited
liability company (“Cowen LLC”) and COWEN GROUP, INC., a Delaware
corporation (“Cowen Inc.” and, together
with Cowen LLC, “Cowen”).


R E C I T A L S:


WHEREAS, SG and Cowen are parties to that certain
Separation Agreement, dated as of the date hereof, by and among SG, SGAI, and
Cowen (the “Separation Agreement”);


WHEREAS, SG and SGAI have determined that it is
appropriate and advisable to separate the Cowen Business from the SG Business
(the “Separation”); and


WHEREAS, each of the Parties has determined that
it is necessary and advisable to enter into this Agreement in connection with
the Separation.


NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained in this Agreement, the Parties hereby agree
as follows:


ARTICLE I


DEFINITIONS


SECTION 1.01.  Definitions.  Reference is made to Section 8.13
regarding the interpretation of certain words and phrases used in this
Agreement.  For the purpose of this Agreement,
the following terms shall have the meanings set forth below.  Capitalized terms used but not otherwise
defined herein shall have the meaning given to them in the Separation
Agreement.


“AAA” has the
meaning set forth in Section 6.01(b).


“Agreement” means
this Indemnification Agreement.


“Assets” means
assets, rights, claims and properties of all kinds, real and personal,
tangible, intangible and contingent, including rights and benefits pursuant to
any contract, license, permit, indenture, note, bond, mortgage, agreement,
concession, franchise, instrument, undertaking, commitment, understanding or
other arrangement and any rights or benefits pursuant to any Proceeding.


“Business Day”
means any day other than (i) a Saturday or Sunday or (ii) a day on which banks
are required or authorized to close in New York, New York.


“Business Entity”
means any corporation, general or limited partnership, trust, joint venture,
unincorporated organization, limited liability entity or other entity.


 

















 


“By-Laws” means
the amended and restated By-Laws of Cowen Inc., substantially in the form of Exhibit
A to the Separation Agreement.


“Certificate of
Incorporation” means the amended and restated Certificate of Incorporation
of Cowen Inc., substantially in the form of Exhibit B to the Separation
Agreement.


“Conveyance and
Assumption Instruments” means, collectively, such deeds, bills of sale,
Asset transfer agreements, endorsements, assignments, assumptions (including
Liability assumption agreements), leases, subleases, affidavits and other
instruments of sale, conveyance, contribution, distribution, lease, transfer
and assignment between SG or, where applicable, any SG Subsidiary, on the one
hand, and Cowen Inc. or, where applicable, any Cowen Subsidiary or designee of
Cowen Inc., on the other hand, as may be necessary or advisable under the laws
of the relevant jurisdictions to effect the Separation.


“Cowen” has the
meaning set forth in the Preamble.


“Cowen Assets” means only the following Assets
of the Parties or their respective Subsidiaries, but excluding any Excluded
Assets:


(A)  the outstanding membership interests of Cowen
LLC;


(B)  the outstanding capital shares of Cowen UK;


(C)  the Assets included on the Cowen Balance
Sheet after completion of the transactions contemplated by the Separation
Agreement and the Transaction Documents or any notes or subledger thereto that
are owned by any Party or any of their respective Subsidiaries as of the IPO
Date;


(D)  the Assets of any Party or any of their
respective Subsidiaries as of the Separation Date that are of a nature or type
that would have resulted in such Assets being included as Assets on a pro forma
combined statement of financial condition of Cowen Inc. or the notes or
subledgers thereto as of the IPO Date (were such statement of financial
condition, notes and subledgers to be prepared) on a basis consistent with the
determination of the Assets included on the Cowen Balance Sheet or any
subledger thereto;


(E)  the Assets expressly allocated to Cowen Inc.
or any Cowen Subsidiary under the Separation Agreement or any of the Principal
Transaction Documents;


(F)  the Assets used or held by Cowen Inc. or any
Cowen Subsidiary for use in the Cowen Business and the rights to the Cowen
Business;


(G)  all right, title and interest to the trade
name, trademark and service mark “Cowen”, together with the goodwill associated
therewith;


(H)  the trade secrets, know-how, proprietary
information (including any clinical study data and product registrations), any
other rights or intellectual property and any other rights, claims or
properties, in each case:  (A) as of the
Separation Date; (B) to the 


 


2

















 


extent primarily related
to the Cowen Business; and (C) that are not otherwise specifically addressed
under any other subsection of this definition; and


(I)  the Assets identified on Schedule
2.02(a)(i) to the Separation Agreement.


“Cowen Balance Sheet”
means the audited combined statement of financial condition of Cowen Inc.,
Cowen LLC and the other Cowen Subsidiaries, including the notes thereto, as of
December 31, 2005, included in the Prospectus.


“Cowen Benefit Plans”
means, collectively, the plans and arrangements set forth on Schedule
1.01(a) to the Separation Agreement and any other benefit plans maintained,
sponsored or adopted by Cowen LLC, Cowen Inc. or the Cowen Subsidiaries,
whether before or after the Separation Date.


“Cowen Business”
means the businesses and operations conducted prior to the Separation Date by
Cowen LLC and the Transferred Entities, excluding the Transferred Businesses.


“Cowen Common Stock”
means the outstanding shares of common stock, par value $0.01, of Cowen Inc.


“Cowen Contracts”
means any contract, agreement or instrument (other than this Agreement and any
other Transaction Document) to which Cowen LLC, Cowen Inc. or any Cowen
Subsidiary is a party or by which any of their respective assets are bound.


“Cowen Employee
Ownership Plan” means the 2006 Equity and Incentive Plan adopted by Cowen
Inc. as of the Separation Date, substantially in the form attached as Exhibit
C to the Separation Agreement.


“Cowen Inc.” has
the meaning set forth in the Preamble.


“Cowen Indemnitees”
means Cowen Inc. and each Cowen Subsidiary and each of their respective
successors and assigns.


“Cowen Indemnity Obligations”  has the meaning set forth in Section
3.01.


“Cowen Liabilities”
means all of the following Liabilities of the Parties or their respective
Subsidiaries:


(i)  all Liabilities included on the Cowen Balance
Sheet or any subledger thereto that remain outstanding as of the Separation
Date after completion of the transactions contemplated by this Agreement and
the Transaction Documents;


(ii)  all other Liabilities that are incurred or
accrued by any Party or any of their respective Subsidiaries from the date of
the Cowen Balance Sheet to the Separation Date that are of a nature or type
that would have resulted in such Liabilities being included as Liabilities on a
pro forma combined statement of financial condition of Cowen Inc. and the notes
or subledgers thereto as of the Separation Date (were such statement of
financial condition, notes or subledgers to be prepared) on a basis consistent
with the 


 


3

















 


determination of the Liabilities included on the Cowen
Balance Sheet or any subledger thereto;


(iii)  all Liabilities expressly allocated to Cowen
Inc. or any Cowen Subsidiary pursuant to this Agreement or any Transaction
Document, and all agreements, obligations and Liabilities of Cowen Inc. and any
Cowen Subsidiaries under this Agreement or any Transaction Document;


(iv)  all Liabilities relating to, arising out of
or resulting from investment decisions or the management of portfolio companies
relating to SG Cowen Ventures (including all
claims by limited partners of SG Cowen Ventures and other Third Parties); provided,
however, that Liabilities relating to, arising out of or resulting from
the administration of SG Cowen Ventures, including the accuracy or correctness
of disbursements and the distribution of materials by or on behalf of the
general partner of SG Cowen Ventures to limited partners of SG Cowen Ventures
shall be deemed “SG Liabilities” as contemplated in Section 2.02(b) of
the Separation Agreement;


(v)  all Liabilities relating to, arising out of
or resulting from investment decisions or the management of portfolio companies
of or relating to the Merchant Banking Fund on or after January 1, 2004
(including all claims by limited partners of the Merchant Banking Fund and other
Third Parties); provided, however, that Liabilities relating to,
arising out of or resulting from (w) the sale and transfer of partnership
interests in the Merchant Banking Fund to the MBF Purchaser (except that any
rights of SG or any SG Subsidiaries in respect of the representations and
warranties made to the MBF Purchaser in the sale and transfer documents shall
not be deemed to have been waived pursuant to this clause (w)), (x) the
administration of the Merchant Banking Fund, including the accuracy or
correctness of disbursements and the distribution of materials by or on behalf
of the Merchant Banking Fund  to the
partners of the Merchant Banking Fund or participants in the Merchant Banking
Co-investment Plan and (y) any claim by former partners of the Merchant Banking
Fund that do not relate to investment decisions or management of the Merchant
Banking Fund after January 1, 2004 shall be deemed “SG Liabilities” as
contemplated in Section 2.02(b) of the Separation Agreement;


(vi)  all Liabilities relating to, arising out of
or resulting from any business or operations conducted at any time prior to, on
or after the IPO Date by the employees of SG’s London Branch whose employment
was primarily associated with the Cowen Business (including but not limited to
those employees who are “Transferred Employees” as defined in the Cowen UK
Purchase Agreement); provided, however, that any such Liabilities
relating to, arising out of or resulting from claims pending as of the IPO Date
shall be added to Schedule 1.01(b) and shall be deemed “SG Liabilities”
as contemplated in Section 2.02(b) of the Separation Agreement;


(vii)  all Liabilities relating to, arising out of
or resulting from any claim in respect of any period prior to the IPO Date by
an employee of Cowen Inc. or any Cowen Subsidiary who does not execute an
Executive Award Agreement and a release satisfactory to SG and Cowen Inc.; provided,
however, that the foregoing shall exclude any such claim by any employee
of Cowen Inc. or any Cowen Subsidiary who did 


 


4

















 


execute an Executive Award Agreement and release
satisfactory to SG and Cowen Inc. and the Parties acknowledge and agree that
each of SG and the SG Subsidiaries, on the one hand, and Cowen Inc. and the
Cowen Subsidiaries, on the other, shall be responsible for any Liabilities
arising from claims against it (or its Subsidiaries) in respect of any period
prior to the IPO Date by an employee who executed an Executive Award Agreement
and release satisfactory to SG and Cowen Inc;


(viii)  all Liabilities relating to, arising out of
or resulting from the Cowen Benefit Plans;


(ix)  all Liabilities relating to, arising out of
or resulting from (1) Cowen Inc.’s adoption of the Cowen Employee Ownership
Plan, (2) Cowen Inc.’s adoption of any directed share program, and (3) any
employment agreements, retention agreements, guaranteed bonuses, bonus plans or
payments, deferred compensation plans and any other agreements, arrangements or
understandings between Cowen LLC, Cowen Inc. or the Cowen Subsidiaries and
their respective directors, officers and employees; provided, however,
that Liabilities pertaining to deferred compensation plans (other than the
SG-USA Fidelity Bonus Plan) maintained by SG for any SG Subsidiary and Cowen
LLC prior to the IPO shall be deemed “SG Liabilities” as contemplated in Section
2.02(b) of the Separation Agreement;


(x)  Cowen Inc.’s portion, determined in
accordance with Section 2.12 of the Separation Agreement, of Liabilities
associated with Mixed Contracts and Mixed Accounts;


(xi)  all Liabilities relating to, arising out of
or resulting from Cowen Inc.’s, Cowen LLC’s or any of their respective
Subsidiaries’ breach of or failure to perform any Cowen Contract;


(xii)  those specific Liabilities set forth on Schedule
1.01(a) as of the Separation Date (which schedule shall be updated from
time to time as mutually agreed in good faith by Cowen Inc. and SG up to the
IPO Date), in each case subject to the limitations set forth in such schedule;
and


(xiii)  except to the extent expressly excluded from
the Cowen Liabilities above, all other known and unknown Liabilities relating
to, arising out of or resulting from the Cowen Business, the Cowen Assets, the
other Cowen Liabilities or any business or operations conducted by Cowen Inc.,
Cowen LLC or any of their respective Subsidiaries, at any time prior to, on or
after the Separation Date (whether or not such Liabilities cease being
contingent, mature, become known, are asserted or foreseen, or accrue, in each
case, before, on or after the Separation Date) that are not expressly retained
or assumed by SG or the SG Subsidiaries pursuant to this Agreement or any
Transaction Document.


Notwithstanding anything to the contrary in this
Agreement or any Transaction Document, Cowen Liabilities shall in no event
include any Liabilities (a) relating to, arising out of or resulting from the
Excluded Assets, (b) for which SG or any of its Affiliates has responsibility
pursuant to applicable provisions of any Service Level 


 


5

















Agreements in connection with the provision of
services to Cowen Inc. or any Cowen Subsidiary thereunder or (c) expressly
allocated to or retained by SG or any SG Subsidiary pursuant to clauses (i)
through (v) or (ix) through (xiii) of the definition of “SG
Liabilities” herein.


“Cowen LLC” has the meaning set forth in the
Preamble.


“Cowen Subsidiary”
means any Subsidiary of Cowen LLC prior to the Separation (including Cowen UK
and any other Transferred Entities) and any Subsidiary of Cowen Inc. following
the Separation (including Cowen LLC and Cowen UK).


“Cowen UK” means
Cowen International Limited, a private limited company organized in England and
Wales.


“Cowen UK Purchase
Agreement” means the Intra-Group Asset Sale and Purchase Agreement, dated
as of May 1, 2006, by and between SG London Branch and Cowen UK.


“Employee Matters
Agreement” means the Employee Matters Agreement entered into on or prior to
the Separation Date among SG, SGAI, SGASH, Cowen LLC and Cowen Inc.,
substantially in the form attached as Exhibit D to the Separation
Agreement.


“Employment Tax”
means withholding, payroll, social security, workers compensation,
unemployment, disability and any similar tax imposed by any Tax Authority, and
any interest, penalties, additions to tax or additional amounts with respect to
the foregoing imposed on any taxpayer or consolidated, combined or unitary
group of taxpayers.


“Escrow Agent”
means JPMorgan Chase Bank, N.A., or such other financial institution as
mutually agreed upon by the Parties, in its capacity as escrow agent under the
Escrow Agreement.


“Escrow Agreement”
means the Escrow Agreement entered into on or prior to the Separation Date
among SGASH, Cowen LLC, Cowen Inc. and the Escrow Agent.


“Exchange Act”
means the Securities Exchange Act of 1934, as amended, together with the rules
and regulations promulgated thereunder.


“Excluded Assets”
means all of the following assets of the Parties or their respective
Subsidiaries:


(i)  all Assets of the Parties or their respective
Subsidiaries to the extent such Assets relate to, arise out of or result from
the SG Business;


(ii)  all cash and cash equivalents as of the
Separation Date of SG, each SG Subsidiary, Cowen LLC and each Cowen Subsidiary,
except (x) any cash and cash equivalents included in the Initial Capital
retained by Cowen LLC pursuant to Section 2.05(a) of the Separation
Agreement and (y) any cash or cash equivalents held for customers pursuant to
Rule 15c3-3 promulgated under the Exchange Act;


 


6

















 


(iii)  subject to Section 2.13 of the
Separation Agreement, all Assets that are expressly contemplated by the
Separation Agreement or any Principal Transaction Document to be Assets
retained by or transferred to SG or any SG Subsidiary; and


(iv)  all other Assets listed or described on Schedule
1.01(c) to the Separation Agreement.


“Governmental
Authority” means any supranational, international, national, federal,
state, or local court, government, department, commission, board, bureau,
agency, official or other regulatory, self-regulatory, administrative or
governmental authority, including the NASD, the NYSE and any similar regulatory
or self-regulatory body under applicable securities laws or regulations.


“Greenwich Capital
Partners” means SG Cowen/Greenwich Street Capital Partners II, L.P., a
Delaware limited partnership.


“Indemnifying Party” has the meaning set forth
in Section 3.04.


“Indemnitee” means
any Cowen Indemnitee or any SG Indemnitee, as appropriate.


“Indemnity Payment”
has the meaning set forth in Section 3.04.


“Information”
means information, whether or not patentable or copyrightable, in written,
oral, electronic or other tangible or intangible forms, including studies,
reports, records, books, contracts, instruments, surveys, discoveries, ideas,
concepts, know-how, techniques, designs, specifications, drawings, blueprints,
diagrams, models, prototypes, samples, flow charts, data, computer data, disks,
diskettes, tapes, computer programs or other software, marketing plans,
customer names, communications by or to attorneys (including attorney-client
privileged communications), memos and other materials prepared by attorneys or
under their direction (including attorney work product), and other technical,
financial, employee or business information or data.


“Initial Capital”
has the meaning set forth in Section 2.05(a) of the Separation
Agreement.


“IPO” means the
initial public offering of shares of Cowen Common Stock pursuant to the
Registration Statement.


“IPO Date” means
the date of the closing of the IPO.


“Leases” means the
real property leases and subleases entered into by Cowen LLC or any of the
Cowen Subsidiaries prior to the date hereof, each of which is listed on Schedule
1.01(d) to the Separation Agreement.


“Liabilities”
means all debts, liabilities, obligations, responsibilities, response actions,
losses, damages (other than punitive, consequential, treble or other similar
damages, except to the extent that the same are paid to Third Parties), fines,
penalties and sanctions, absolute or contingent, matured or unmatured,
liquidated or unliquidated, foreseen or unforeseen, joint, 


 


7

















 


several or individual,
asserted or unasserted, accrued or unaccrued, known or unknown, whenever
arising, including those arising under or in connection with any law, statute,
ordinance, regulation, rule or other pronouncements of Governmental Authorities
having the effect of law, Proceeding, threatened Proceeding, order or consent
decree of any Governmental Authority or any award of any arbitration tribunal,
those arising under any contract, guarantee, commitment or undertaking, whether
sought to be imposed by a Governmental Authority, private party, or Party, whether
based in contract, tort, implied or express warranty, strict liability,
criminal or civil statute, or otherwise, and those, in respect of Cowen Inc. or
any Cowen Subsidiary and SG and any SG Subsidiary, pursuant to indemnification
or contribution arrangements with their respective directors, officers,
employees and agents, and including any costs, expenses, interest, attorneys’
fees, disbursements and expense of counsel, expert and consulting fees and
costs related thereto (including allocated costs of in-house counsel and other
personnel) or to the investigation, preparation or defense thereof.


“MBF Purchaser”
means the purchaser of the partnership interests in the Merchant Banking Fund
identified on Schedule              .


“Merchant Banking Fund”
means SG Merchant Banking Fund L.P., a Delaware limited partnership.


“Mixed Accounts”
means any accounts receivable or accounts payable relating to both the SG
Business and the Cowen.


“Mixed Contract”
means any agreement to which SG, Cowen Inc., Cowen LLC or any of their
respective Subsidiaries is a party prior to the Separation Date that inures to
the benefit or burden of each of the SG Business and the Cowen Business.


“NASD” means the
National Association of Securities Dealers, Inc.


“NYSE” means the
New York Stock Exchange, Inc.


“Notice” has the
meaning set forth in Section 3.05(a).


“Parties” means
the parties to this Agreement.


“Person” means
any:  (i) individual; (ii) Business
Entity; or (iii) Governmental Authority.


“Prime Rate” means
the rate which SG (or its successor or another major money center commercial
bank agreed to by the Parties) announces as its prime lending rate, as in
effect from time to time.


“Principal Transaction
Documents” means:  (i) the Separation
Agreement, (ii) the Employee Matters Agreement; (iii) the Escrow Agreement;
(iv) the Stockholders Agreement; (v) the Tax Matters Agreement; (vi) the
Transition Services Agreement; and (vii) any and all Leases.


“Proceeding”
means:  (i) any past, present or future
suit, countersuit, action, arbitration, mediation, alternative dispute
resolution process, claim, counterclaim, demand, proceeding; (ii) any
inquiry, proceeding or investigation by or before any Governmental Authority;
or 


 


8

















 


(iii) any arbitration
or mediation tribunal, in each case involving SG, any SG Subsidiary, any SG
Indemnitee (but only if in a capacity entitling such Person to the rights of an
SG Indemnitee), Cowen LLC, Cowen Inc., any Cowen Subsidiary or any Cowen
Indemnitee (but only if in a capacity entitling such Person to the rights of a
Cowen Indemnitee).


“Prospectus” means
the prospectus forming a part of the Registration Statement as the same may be
amended or supplemented from time to time.


“Registration
Statement” means the registration statement on Form S-1 (File No.
333-132602) filed under the Exchange Act on March 21, 2006, pursuant to which
the Cowen Common Stock to be sold in the IPO has been registered, together with
all amendments and supplements thereto.


“SEC” means the
Securities and Exchange Commission.


“Separation” has
the meaning set forth in the Recitals.


“Separation Agreement”
has the meaning set forth in the Recitals.


“Service Level
Agreements” has the meaning set forth in the Transition Services Agreement.


“SG” has the
meaning set forth in the Preamble.


“SGAI” means SG
Americas, Inc.


“SGASH” has the
meaning set forth in the Preamble.


“SG Business”
means all businesses and operations conducted prior to the Separation Date by
SG and any of the SG Subsidiaries, in each case that are not included in the
Cowen Business.  For purposes of this
Agreement and the other Transaction Documents only, the SG Business shall also
be deemed to include the Transferred Businesses.


“SG Contracts”
means any contract, agreement or instrument (other than this Agreement and any
other Transaction Document) to which SG or any of the SG Subsidiaries is a
party or by which SG or any SG Subsidiaries, or any of their respective assets,
are bound.


“SG Cowen Ventures”
means SG Cowen Ventures I, L.P., a Delaware limited partnership.


“SG Indemnitees”
means SG and each SG Subsidiary and each of their respective successors and
assigns.


“SG Indemnity Obligations” has the meaning set
forth in Section 3.02.


“SG Liabilities”
means all of the following Liabilities of the Parties or their respective
Subsidiaries:


 


9

















 


(i)  all Liabilities expressly allocated to SG or
any SG Subsidiaries pursuant to this Agreement or any Transaction Document, and
all agreements, obligations and Liabilities of SG and any SG Subsidiaries under
this Agreement or any Transaction Document;


(ii)  all Liabilities relating to, arising out of
or resulting from the administration of SG Cowen Ventures, including the
accuracy or correctness of disbursements and the distribution of materials by
or on behalf of the general partner of SG Cowen Ventures to limited partners of
SG Cowen Ventures; provided, however, that Liabilities relating
to, arising out of or resulting from investment decisions or the management of
portfolio companies relating to SG Cowen Ventures (including all claims by
limited partners of SG Cowen Ventures and other Third Parties) shall be deemed “Cowen
Liabilities” as contemplated by Section 2.02(a)(ii) of the Separation Agreement;


(iii)  all Liabilities relating to, arising out of
or resulting from (x) the administration of the Merchant Banking Fund,
including the accuracy or correctness of disbursements and the distribution of
materials by or on behalf of the Merchant Banking Fund to the partners of the
Merchant Banking Fund or participants in the Merchant Banking Co-investment
Plan and (y) investment decisions or the management of portfolio companies of
or relating to the Merchant Banking Fund prior to January 1, 2004; provided,
however, that Liabilities relating to, arising out of or resulting from
investment decisions or the management of portfolio companies of or relating to
the Merchant Banking Fund on or after January 1, 2004 (including all claims by
limited partners of the Merchant Banking Fund and other Third Parties) shall be
deemed “Cowen Liabilities” as contemplated by Section 2.02(a)(ii) of the
Separation Agreement;


(iv)  all Liabilities relating to, arising out of
or resulting from the sale and transfer of partnership interests in the
Merchant Banking Fund to the MBF Purchaser (except that any rights of SG or any
SG Subsidiaries in respect of the representations and warranties set forth in
the sale and transfer documents shall not be deemed to have been waived hereby);


(v)  all Liabilities for expenses payable by SG as
provided in Section 9.08 of the Separation Agreement;


(vi)  SG’s portion, determined in accordance with Section
2.12 of the Separation Agreement, of Liabilities associated with Mixed
Contracts and Mixed Accounts;


(vii)  all Liabilities relating to, arising out of
or resulting from SG’s or any SG Subsidiary’s breach of or failure to perform
any SG Contract;


(viii)  except to the extent expressly excluded from
the SG Liabilities or included as Cowen Liabilities, all Liabilities relating
to, arising out of or resulting from any business conducted by SG or any SG
Subsidiary at any time prior to, on or after the Separation Date;


(ix)  all Liabilities relating to, arising out of
or resulting from the Discontinued or Transferred Businesses whether conducted
prior to, on or after the Separation Date;


 


10

















 


(x)  all Liabilities relating to, arising out of
or resulting from employee-related claims made by any current or former
employees of SG or any SG Subsidiary that are asserted by such current or
former employees against Cowen Inc. or any Cowen Subsidiaries in respect of any
period prior to the IPO Date;


(xi)  all Liabilities (other than Cowen
Liabilities) to the extent such Liabilities 
relate to, arise out of or result from a claim by any Third Party,
including any Governmental Authority, against Cowen Inc. or any Cowen
Subsidiaries that relate primarily to the terms, amount or procurement of
insurance with respect to the Cowen Business prior to the Separation Date; provided,
however, that the term “SG Liabilities” shall not include and SG shall
have no indemnity obligation in respect of Liabilities relating to, arising out
of or resulting from a claim (including but not limited to a claim by a Third
Party) under or relating to the insurance policies listed on Schedule 4.01 to
the Separation Agreement;


(xii)  those specific contingent Liabilities set
forth on Schedule 1.01(b) as of the Separation Date (which schedule
shall be updated from time to time as mutually agreed in good faith by Cowen
Inc. and SG up to the IPO Date), in each case solely to the extent that payment
in respect of such Liabilities has not been made out of the escrow therefor
pursuant to Section 2.05(b) of the Separation Agreement; provided,
however, that, unless otherwise specifically identified on Schedule
1.01(b), any suit, inquiry, proceeding or investigation (including but not
limited to any such suit, inquiry, proceeding or investigation that relates to,
arises out of or results from the litigation and regulatory matters set forth
on Schedule 1.01(b)) that is not known to SG as of  the IPO Date shall not be deemed an “SG
Liability” for purposes of this Agreement; and


(xiii)  all Liabilities relating to, arising out of
or resulting from the Excluded Assets.


“SG Subsidiary”
means any Subsidiary of SG other than Cowen LLC, Cowen Inc. and any Cowen
Subsidiary.


“SocGen” has the
meaning set forth in the Preamble.


“Stockholders
Agreement” means the Stockholders Agreement entered into as of the
Separation Date among Cowen Inc. and certain of its stockholders, including
SGASH, substantially in the form attached as Exhibit F to the Separation
Agreement.


“Subsidiary” of
any Person means another Business Entity that is directly or indirectly
controlled by such Person.  As used
herein, “control” means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Business
Entity, whether through ownership of voting securities or other interests, by
contract or otherwise.  For the avoidance
of doubt, Cowen Inc. and the Cowen Subsidiaries are not Subsidiaries of SG as
that term is used in this Agreement.


“Tax” means:  (i) any income, net income, gross income,
gross receipts, profits, capital stock, franchise, property, ad valorem, stamp,
excise, severance, occupation, service, sales, use, license, lease, transfer,
import, export, customs duties, value added, alternative minimum, 


 


11

















 


estimated or other
similar tax (including any fee, assessment, or other charge in the nature of or
in lieu of any tax) imposed by any Tax Authority, and any interest, penalties,
additions to tax or additional amounts with respect to the foregoing imposed on
any taxpayer or consolidated, combined or unitary group of taxpayers; and (ii)
any Employment Tax.


“Tax Authority”
means, with respect to any Tax, the Governmental Authority or political
subdivision thereof that imposes such Tax, and the agency (if any) charged with
the collection of such Tax for such entity or subdivision.


“Tax Matters Agreement”
means the Tax Matters Agreement entered into on or prior to the Separation Date
among SGAI, SGASH, Cowen LLC and Cowen Inc., substantially in the form attached
as Exhibit G to the Separation Agreement.


“Third Party”
means any Person other than SG, any SG Subsidiary, Cowen Inc. and any Cowen
Subsidiary.


“Third Party Claim”
has the meaning set forth in Section 3.05(a).


“Transaction Documents”
means all written agreements, instruments, understandings, assignments or other
arrangements (other than this Agreement) entered into by the Parties or any of
their respective Subsidiaries in connection with the Separation and the other
transactions contemplated by this Agreement, including the following:  (i) the Separation Agreement, (ii) the
Conveyance and Assumption Instruments; (iii) the Employee Matters Agreement;
(iv) the Escrow Agreement; (v) the Stockholders Agreement; (vi) the Tax Matters
Agreement; (vii) the Transition Services Agreement; (viii) any and all
Leases; and (ix) any other agreements which the Parties determine are necessary
or advisable in connection with the Separation and the other transactions
contemplated by this Agreement and the Transaction Documents.


“Transferred
Businesses” means (i) the Private Client Group division sold by SG Cowen
Securities Corporation to Lehman Brothers Holdings Inc. in October 2000, (ii)
the bond brokerage business sold by SG Cowen Securities Corporation to Fimat
Futures, USA, Inc. in 2000, (iii) the correspondent clearing operations sold by
SG Cowen Securities Corporation to BNY Clearing Services LLC in January 2000
and (iv) the SG Cowen Asset Management Business.


“Transferred Entities”
means the entities set forth on Schedule 1.01(f) to the Separation
Agreement.


“Transition Services
Agreement” means the Transition Services Agreement entered into on or prior
to the Separation Date among SG, SGAI, SGASH, Cowen LLC and Cowen Inc.,
substantially in the form attached as Exhibit H to the Separation
Agreement.


“U.S.” or “United
States” means the United States of America, including each of the 50 states
thereof, the District of Columbia and Puerto Rico, but excluding all other
territories and possessions.


 


12

















 


ARTICLE II


MUTUAL RELEASES


SECTION 2.01.  Cowen Release of SG.  Except as provided in Section 2.03 and
in the provisos to this Section 2.01, effective as of the Separation
Date, Cowen Inc. does hereby, for itself, each Cowen Subsidiary, and their
respective successors and assigns, relinquish, release and forever discharge:
(1) SG, each SG Subsidiary, and their respective successors and assigns; and
(2) all Persons who at any time are or have been shareholders, directors,
officers, agents, representatives, counsel or employees of SG or any SG
Subsidiary (in each case, in their respective capacities as such), and their
respective heirs, executors, administrators, successors and assigns (except
where such Cowen Liability is caused by or related to any willful misconduct or
fraud attributable to any such Person, or such Person’s violation of regulatory
rules or regulations or applicable law to which SG, Cowen Inc. or any of their
respective Subsidiaries is subject), in each such case from all Cowen
Liabilities; provided, however, that nothing in this Section
2.01 shall relieve the Persons released in this Section 2.01
from:  (x) any Liability expressly
allocated to SG or any SG Subsidiary in this Agreement (including the
indemnification obligations in Section 3.02 and the contribution
obligations in Section 4.02), any Principal Transaction Document or
any other agreement, arrangement, commitment or understanding to the extent
expressly preserved pursuant to Section 2.09(b) of the Separation
Agreement; (y) any Liability the release of which would result in the release
of any Person other than the Persons released in this Section 2.01; or
(z) any Liability incurred by SG or any SG Subsidiary pursuant to the terms and
conditions of the Service Level Agreements and relating to any period prior to
the IPO, and, provided  further, that nothing in this Section 2.01
shall relieve any Person released in this Section 2.01 who, after the
Separation Date, is a director, officer or employee of Cowen Inc. or any of the
Cowen Subsidiaries and is no longer a director, officer or employee of SG or
any of the SG Subsidiaries from Liabilities arising out of, relating to or
resulting from his or her service as a director, officer or employee of Cowen
Inc. or any of the Cowen Subsidiaries after the Separation Date.


SECTION 2.02.  SG Release of Cowen Inc.  Except as provided in Section 2.03
and in the proviso to this Section 2.02, effective as of the
Separation Date, SG does hereby, for itself, each SG Subsidiary, and their
respective successors and assigns, relinquish, release and forever discharge:
(1) Cowen Inc., Cowen LLC and each Cowen Subsidiary and their respective
successors and assigns; and (2) all Persons, other than the Persons identified
on Schedule 2.02, who at any time are or have been shareholders,
directors, officers, agents, representatives, counsel or employees of Cowen
Inc. or any Cowen Subsidiary (in each case, in their respective capacities as
such), and their respective heirs, executors, administrators, successors and
assigns (except where such SG Liability is caused by or related to any willful
misconduct or fraud attributable to any such Person, or such Person’s violation
of regulatory rules or regulations or applicable law to which SG, Cowen Inc. or
any of their respective Subsidiaries is subject), in each such case from all SG
Liabilities; provided, however, that nothing in this Section 2.02
shall relieve the Persons released in this Section 2.02 from:  (x) any Liability expressly allocated to
Cowen Inc. or any Cowen Subsidiary in this Agreement (including the
indemnification obligations in Section 3.01 and the contribution
obligations in Section 4.02), any Principal Transaction Document or any
other agreement, arrangement, commitment or understanding to the extent
expressly preserved pursuant to Section 2.09(b) of the Separation
Agreement; (y) any 


 


13

















 


Liability the release of which would result in the
release of any Person other than the Persons released in this Section 2.02
or (z) any Liability incurred by Cowen or any Cowen Subsidiary pursuant to the
terms and conditions of the Service Level Agreements and relating to any period
prior to the IPO.


SECTION 2.03.  SG Obligations Not Affected.  Nothing contained in this Article II
shall release SG or any SG Subsidiary from honoring existing obligations, if
any:  (i) to indemnify any director,
officer or employee of Cowen Inc. or any of its Subsidiaries who was a
director, officer or employee of SG or any SG Subsidiary on or prior to the
Separation Date, to the extent such director, officer or employee was entitled
to such indemnification pursuant to then existing obligations; or (ii) to
provide any employment, post-employment or retirement benefits to any director,
officer or employee of Cowen Inc. or any of its Subsidiaries who was a
director, officer or employee of SG or any SG Subsidiary on or prior to the
Separation Date, to the extent such director, officer or employee was entitled
to such benefits pursuant to then existing obligations, except as otherwise
provided in the Employee Matters Agreement.


SECTION 2.04.  No Cowen Inc. Claims.  Cowen Inc. shall not make, and shall not
permit any Cowen Subsidiary to make, any claim or demand, or commence any
Proceeding asserting any claim or demand, including any claim of contribution
or indemnification, against SG or any SG Subsidiary or any other Person
released pursuant to Section 2.01, with respect to any Liabilities
released pursuant to Section 2.01.


SECTION 2.05.  No SG Claims.  SG shall not make, and shall not permit any
SG Subsidiary to make, any claim or demand, or commence any Proceeding
asserting any claim or demand, including any claim of contribution or
indemnification, against Cowen Inc. or any Cowen Subsidiary or any other Person
released pursuant to Section 2.02, with respect to any Liabilities
released pursuant to Section 2.02.


SECTION 2.06.  Subsidiary Releases.  At any time, at the request of any Party, the
other Party shall cause its Subsidiaries to execute and deliver releases
reflecting the provisions hereof.


ARTICLE III


INDEMNIFICATION


SECTION 3.01.  Indemnification
by Cowen Inc.  Except as otherwise
specifically set forth in any provision of this Agreement (including but not
limited to the penultimate paragraph of this Section 3.01) or of any
Principal Transaction Document, Cowen Inc. shall, to the fullest extent
permitted by law, indemnify, defend and hold harmless each of the SG
Indemnitees from and against all Liabilities to the extent such Liabilities
relate to, arise out of or result from any of the following items
(collectively, the “Cowen Indemnity Obligations”):


(a)  any failure
of Cowen Inc. or any Cowen Subsidiary to pay, perform or otherwise promptly discharge
any Cowen Liabilities in accordance with their terms and the terms of this
Agreement and any Transaction Document, whether prior to, on or after the
Separation Date;


 


14

















 


(b)  any breach
by Cowen Inc. or any Cowen Subsidiary of this Agreement or any of the
Transaction Documents (including any Liabilities relating to, arising out of or
resulting from such breach and payable pursuant to Section 8.16 of this
Agreement but excluding any Liabilities relating to, arising out of or
resulting from a breach of the representation and warranty in Section
2.01(f)(i) of the Separation Agreement), or any action by Cowen Inc. or any
Cowen Subsidiary in contravention of the Certificate of Incorporation or
By-Laws; and


(c)  any untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, with respect to all information contained in the
Registration Statement, the Prospectus or any other document filed with the SEC
by Cowen Inc. in connection with the IPO pursuant to the Securities Act or the
Exchange Act (excluding the sections titled “Use of Proceeds”, “Certain
Relationships and Related Transactions”, “Business—Regulation” and “Business—Legal
Proceedings”, the Selling Stockholder Information in the section titled “Principal
and Selling Stockholders”, the combined statements of financial condition and
all other information which specifically relates to SG, SGASH or any other SG
Subsidiary or any of their respective employees which has been furnished in
writing by or on behalf of SGASH expressly for use therein).


Notwithstanding the
foregoing provisions of this Section 3.01, the indemnity in this Section 3.01
for Cowen Indemnity Obligations shall not extend to a SG Indemnitee to the
extent such Person is a natural person and was (a) engaged in willful
misconduct, (b) engaged in fraud or (c) in violation of regulatory rules or
regulations or applicable law to which SG, Cowen Inc. or any of their
respective Subsidiaries is subject, in each such case in connection with the
Cowen Indemnity Obligations for which indemnification is sought.


Any indemnification by Cowen
Inc. of the SG Indemnitees in respect of Liabilities for Taxes shall be as set
forth in the Tax Matters Agreement.


SECTION 3.02.  Indemnification
by SG.  Except as otherwise
specifically set forth in any provision of this Agreement (including but not
limited to the penultimate paragraph of this Section 3.02) or of any
Principal Transaction Document, SG shall, to the fullest extent permitted by
law, indemnify, defend and hold harmless each of the Cowen Indemnitees from and
against all Liabilities to the extent such Liabilities relate to, arise out of
or result from any of the following items (collectively, the “SG Indemnity
Obligations”):


(a)  all
Liabilities (other than Cowen Liabilities) to the extent such Liabilities
relate to, arise out of or result from any failure of SG or any SG Subsidiary
to pay, perform or otherwise promptly discharge any SG Liabilities in
accordance with their terms and the terms of this Agreement and any Transaction
Documents, whether prior to, on or after the Separation Date; and


(b)  all
Liabilities (other than Cowen Liabilities) to the extent such Liabilities
relate to, arise out of or result from any breach by SG or any SG Subsidiary of
this Agreement or any of the Transaction Documents (including any Liabilities
relating to, arising out of or resulting from such breach and payable pursuant
to Section 8.16 of this Agreement but 


 


15

















 


excluding any Liabilities relating to, arising out of or resulting from
a breach of the representation and warranty in Section 2.01(f)(ii) of
the Separation Agreement) ; and


(c)  all
Liabilities (other than Cowen Liabilities) to the extent such Liabilities
relate to, arise out of or result from any untrue statement or alleged untrue
statement of a material fact made in the Registration Statement or the
Prospectus, or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, in
each case to the extent, and only to the extent, that such untrue statement or
omission or alleged untrue statement or omission was contained in or omitted
from (i) the section of the Prospectus titled “Use of Proceeds”, (ii)
information relating solely to SG Americas Securities Holdings, Inc. (and not
to Cowen Inc., any of Cowen Inc.’s officers, directors or senior employees or
the beneficial ownership of Cowen Inc. following the IPO) in the section of the
Prospectus titled “Principal and Selling Stockholders” (the “Selling
Stockholder Information”), and (iii) information relating solely to Messrs.
Kaplan and Ogier in the sections of the Prospectus titled “Management—Directors
and Executive Officers”, “—Executive Compensation”, “—Option Exercises Table”
and “—Security Ownership of Management and Directors.


Notwithstanding the foregoing provisions of this Section 3.01,
the indemnity in this Section 3.02 for SG Indemnity Obligations
shall not extend to a Cowen Indemnitee to the extent such Person is a natural
person and was (a) engaged in willful misconduct, (b) engaged in fraud or (c)
in violation of regulatory rules or regulations or applicable law to which SG,
Cowen Inc. or any of their respective Subsidiaries is subject, in each such
case in connection with the SG Indemnity Obligations for which indemnification
is sought.


Any indemnification by SG of the Cowen Indemnitees in respect of
Liabilities for Taxes shall be as set forth in the Tax Matters Agreement.


SECTION 3.03.  Clarification of Intent.


(a)  The
provisions of Sections 3.01(c), 3.02(c) and 3.03(b) are
solely intended to allocate responsibility for any statements and omissions in
the Registration Statement and the Prospectus between SG and the SG
Subsidiaries, on the one hand, and Cowen Inc., Cowen LLC and the other Cowen
Subsidiaries, on the other hand, as agreed by the Parties.  Nothing in Section 3.01(c), 3.02(c)
or 3.03(b) shall operate to modify the other provisions of this Agreement
or the Principal Transaction Documents, including the Parties’ allocation of
Cowen Assets, Cowen Liabilities and SG Liabilities hereunder and thereunder.


(b)  For the
avoidance of doubt, (i) neither SG nor Cowen Inc. shall indemnify, defend or
hold harmless the Cowen Indemnitees or SG Indemnitees, as the case may be, in
respect of the section of the Prospectus titled “Certain Relationships and
Related Transactions” or in respect of the combined statements of financial
condition contained in the Registration Statement, the Prospectus or any other
document filed with the SEC by Cowen Inc. in connection with the IPO pursuant
to the Securities Act or the Exchange Act and (ii) other than in respect of the
Selling Stockholder Information as required by Section 3.02(c), SG shall
not indemnify, defend or hold harmless the Cowen Indemnitees for any portion of
the Registration 


 


16

















 


Statement, the Prospectus or any other document filed with the SEC by
Cowen Inc. in connection with the IPO pursuant to the Securities Act or the
Exchange Act.


SECTION 3.04.  Indemnification Obligations Net of
Insurance Proceeds and Other Amounts. 
The Parties intend that any Liability subject to indemnification or
contribution pursuant to this Agreement or any Transaction Document:  (i) shall be reduced by any Insurance
Proceeds or other amounts recovered (net of any out-of-pocket costs or expenses
incurred in the collection thereof) from any Person by or on behalf of the
Indemnitee in respect of any indemnifiable Liability; (ii) shall not be
increased to take into account any Tax costs incurred by the Indemnitee arising
from any Indemnity Payments received from the Indemnifying Party (as defined
below); and (iii) shall not be reduced to take into account any Tax
benefit received by the Indemnitee arising from the incurrence or payment of
any Indemnity Payment.  Accordingly, the
amount which any Party against whom a claim is made for indemnification under
this Agreement (an “Indemnifying Party”) is required to pay to any
Indemnitee shall be reduced by any Insurance Proceeds or any other amounts
theretofore recovered (net of any out-of-pocket costs or expenses incurred in
the collection thereof) by or on behalf of the Indemnitee in respect of the
related Liability.  If an Indemnitee
receives a payment (an “Indemnity Payment”) required by this Agreement
from an Indemnifying Party in respect of any Liability and subsequently
receives Insurance Proceeds or any other amounts in respect of the related
Liability, then the Indemnitee shall pay to the Indemnifying Party an amount
equal to the excess of the Indemnity Payment received over the amount of the
Indemnity Payment that would have been due if the Insurance Proceeds or such
other amounts (net of any out-of-pocket costs or expenses incurred in the
collection thereof) had been received, realized or recovered before the
Indemnity Payment was made.


SECTION 3.05.  Procedures for Indemnification of Third
Party Claims.


(a)  Notice
of Claims.  If, at or following the
date hereof, an Indemnitee receives notice or otherwise learns of the assertion
or commencement by a Third Party of any Proceeding against the Indemnitee with
respect to which the Indemnitee believes that Cowen Inc. (in the case of an SG
Indemnitee) or SG (in the case of a Cowen Indemnitee) is obligated to provide
indemnification to such Indemnitee pursuant to this Agreement or any
Transaction Document (collectively, a “Third Party Claim”), such
Indemnitee shall give such Indemnifying Party written notice thereof (the “Notice”)
within 20 days after becoming aware of such Third Party Claim.  The Notice must describe the Third Party
Claim in reasonable detail. 
Notwithstanding the foregoing, the failure of any Indemnitee to give the
Notice as provided in this subsection (a) shall not relieve the
related Indemnifying Party of its obligations under this Article III,
except to the extent that such Indemnifying Party is actually materially
prejudiced by such failure to give the Notice.


(b)  Control
of Defense.  The Indemnifying Party
shall have the right to conduct and control the defense of any Third Party
Claim; provided, however, that: 
(i) a Cowen Indemnitee may conduct and control the defense of any
Third Party Claim in which no SG Indemnitee is a named party and a Cowen
Indemnitee is a named party unless and until Cowen Inc. asserts that such Third
Party Claim reasonably may involve SG Indemnity Obligations; (ii) in connection
with any Third Party Claim with respect to which an SG Indemnitee is seeking
indemnification under this Agreement, if within 20 days after receipt of the
Notice Cowen Inc. 


 


17

















 


irrevocably acknowledges and agrees in writing with SG and any SG
Indemnitee that all Liabilities relating to, arising out of or resulting from
the Third Party Claim are and shall remain solely Cowen Liabilities, then Cowen
Inc. shall thereafter have the right to conduct and control the defense of such
Third Party Claim at Cowen Inc.’s sole cost and expense; and (iii) in
connection with any Third Party Claim with respect to which a Cowen Indemnitee
is seeking indemnification under this Agreement, if within 20 days after
receipt of the Notice SG irrevocably acknowledges and agrees with Cowen Inc.
and any Cowen Indemnitee that all Liabilities relating to, arising out of or
resulting from such Third Party Claim are and shall remain solely SG
Liabilities, then SG shall thereafter have the right to conduct and control the
defense of such Third Party Claim at SG’s sole cost and expense.  If the Party otherwise entitled to conduct
and control the defense of any Third Party Claim hereunder nevertheless fails
to assume the defense of such Third Party Claim within 20 days, then the
Indemnitee that is the subject of such Third Party Claim shall be entitled to
conduct and control the defense of such Third Party Claim.


(c)  Allocation
of Defense Costs.  Except as
otherwise provided herein, the costs and expenses of the defense of any Third
Party Claim shall be borne by the Indemnifying Party.


(d)  Right to
Monitor and Participate.  An
Indemnitee or Indemnifying Party that is not entitled to conduct and control
the defense of any Third Party Claim nevertheless shall have the right to
employ separate counsel of its own choosing to monitor and participate in the
defense of any Third Party Claim for which it is a potential Indemnitee or
Indemnifying Party, but the fees and expenses of such counsel shall be at the
expense of such Indemnitee or Indemnifying Party, as the case may be, and shall
not be subject to subsection (c) above; provided, however,
that if there is a conflict of interest between Cowen or any Cowen Subsidiary,
on the one hand, and SG or any SG Subsidiary, on the other hand, then the
Indemnitee shall be entitled to employ separate counsel of its own choosing and
at the reasonable expense of the Indemnifying Party.


(e)  No
Settlement.  No Party may settle or
compromise any Third Party Claim for which it is seeking to be indemnified
hereunder without the prior written consent of the Party from which such
indemnification is sought, which consent may not be unreasonably delayed or
withheld.  No Indemnifying Party may
settle or compromise any Third Party Claim without the prior written consent of
the Indemnitee, except where such settlement or compromise (i) is solely for
monetary damages as to which the Indemnitee is fully indemnified, (ii) includes
an unconditional release of the Indemnitee and (iii) does not include any
admission of wrongdoing by the Indemnitee.


(f)  Pending
Third Party Claims.  The provisions
of this Article III shall apply to Third Party Claims that are already
pending or asserted, including those set forth on Schedules 1.01(a) and 1.01(b),
as well as Third Party Claims brought or asserted after the date hereof.  There shall be no requirement to give a
Notice with respect to pending Third Party Claims as such claims exist as of
the Separation Date.


(g)  Cross-Claims.  Except as set forth in Section 4.01(a),
neither SG nor Cowen Inc. shall, nor shall they permit their respective
Subsidiaries to, file claims or cross-claims 


 


18

















 


against each other or each other’s Subsidiaries in a Proceeding in
which a Third Party Claim is being resolved.


ARTICLE IV


CERTAIN OTHER MATTERS


SECTION
4.01.  Additional Matters.


(a)  Notice of Claims.  Any claim for indemnity under this Agreement
or any Transaction Document which does not result from a Third Party Claim must
be asserted by written notice given by the Indemnitee to the applicable
Indemnifying Party; provided, that the failure by an Indemnitee to so
assert any such claim shall not prejudice the ability of the Indemnitee to do
so at a later time except to the extent (if any) that the Indemnifying Party
would be materially prejudiced thereby. 
Such Indemnifying Party shall have a period of 30 days after the receipt
of such notice within which to respond thereto. 
If such Indemnifying Party does not respond within such 30-day period,
such Indemnifying Party shall be deemed to have accepted responsibility to make
payment.  If such Indemnifying Party does
not respond within such 30-day period or rejects such claim in whole or in
part, such Indemnitee shall be free to pursue such remedies as may be available
to such Party as contemplated by this Agreement and the Principal Transaction
Documents, as applicable, including, without limitation, filing third party
claims or cross-claims against such Indemnifying Party in the relevant
Proceeding.


(b)  Subrogation.  In the event of payment by or on behalf of an
Indemnifying Party to an Indemnitee in connection with any Third Party Claim,
such Indemnifying Party shall be subrogated to and shall stand in the place of
such Indemnitee as to any events or circumstances in respect of which such
Indemnitee may have any right, defense or claim relating to such Third Party
Claim against any claimant or plaintiff asserting such Third Party Claim or
against any other Person.  Such
Indemnitee shall cooperate with the Indemnifying Party in a reasonable manner,
and at the cost and expense of such Indemnifying Party, in prosecuting any
subrogated right, defense or claim.


(c)  Pursuit
of Claims Against Third Parties.  If
(i) a Party incurs any Liability arising out of any Principal Transaction
Document; (ii) an adequate legal or equitable remedy is not available for any
reason against the other Party to satisfy the Liability incurred by the
incurring Party; and (iii) a legal or equitable remedy may be available to the
other Party against a Third Party for such Liability, then the other Party will
use commercially reasonable efforts to cooperate with the incurring Party, at
the incurring Party’s expense, to permit the incurring Party to obtain the
benefits of such legal or equitable remedy against the Third Party.


(d)  Currency
Conversion.  In the event that any
indemnification payment required to be made hereunder or under any Transaction
Document may be denominated in a currency other than U.S. Dollars, the amount
of such payment shall be converted into U.S. Dollars using the foreign exchange
rate for such currency published by the Federal Reserve Bank of New York at or
about 12 noon (New York time) on the day on which the Indemnified Party made
payment to a Third Party with respect to the indemnifiable Liability (or, if
such day is not a Business Day, on the Business Day immediately preceding such
day).


 


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SECTION
4.02.  Right of Contribution.


(a)  Contribution by Cowen Inc.  If any right of indemnification contained in Section 3.01
is held unenforceable or is unavailable for any reason, then Cowen Inc., in
lieu of indemnifying the SG Indemnitees, shall contribute to the amounts paid
or payable by the SG Indemnitees in such proportion as is appropriate to reflect
the relative fault of Cowen Inc. and the Cowen Subsidiaries, on the one hand,
and the SG Indemnitees entitled to contribution, on the other hand.


(b)  Contribution
by SG.  If any right of
indemnification contained in Section 3.02 is held unenforceable or
is unavailable for any reason, then SG, in lieu of indemnifying the Cowen
Indemnitees, shall contribute to the amounts paid or payable by the Cowen
Indemnitees in such proportion as is appropriate to reflect the relative fault
of SG and the SG Subsidiaries, on the one hand, and the Cowen Indemnitees
entitled to contribution, on the other hand.


(c)  Allocation
of Relative Fault.  Solely for
purposes of determining relative fault pursuant to this Section 4.02:  (i) any fault associated with the ownership,
operation or activities of the Cowen Business (other than SG Liabilities) prior
to the Separation Date or in respect of the Cowen Liabilities shall be deemed
to be the fault of Cowen Inc. and the Cowen Subsidiaries and no such fault
shall be deemed to be the fault of SG or the SG Subsidiaries; and (ii) any
fault associated with the ownership, operation or activities of the SG Business
(other than Cowen Liabilities) prior to the Separation Date or in respect of
the SG Liabilities shall be deemed to be the fault of SG and the SG
Subsidiaries and no such fault shall be deemed to be the fault of Cowen Inc. or
the Cowen Subsidiaries, provided, however, that if the foregoing
allocation provided by clauses (i) and (ii) above is not permitted by
applicable law, then, in each case, such allocation shall be adjusted as is
appropriate to reflect not only the fault referred to in clauses (i) and (ii)
above, but also the relative benefits in connection therewith as well as any
other relevant equitable considerations.


(d)  Contribution
Procedures.  The provisions of Sections 3.03
and 3.04 and Sections 4.01 through 4.06 shall govern
any contribution claims.


SECTION 4.03.  Covenant Not to Sue.  Each Party hereby covenants and agrees that
none of it, any of its Subsidiaries or any Person claiming through it shall
bring suit or otherwise assert any claim against any Indemnitee, or assert a
defense against any claim asserted by any Indemnitee, before any court,
arbitrator, mediator or administrative agency anywhere in the world, alleging
that:  (a) the assumption or retention of
any Cowen Liabilities or SG Liabilities pursuant to the Separation is void or
unenforceable for any reason; or (b) the provisions of this Agreement are void
or unenforceable for any reason.  The
covenant in this Section 4.03 shall run with title to the applicable SG
Assets, Cowen Assets, SG Liabilities and Cowen Liabilities, and shall bind any
transferee, assignee or other Person to whom an interest in the applicable
Assets or Liabilities may be transferred or assigned.


SECTION 4.04.  Remedies Cumulative.  The remedies provided in this Agreement shall
be cumulative and, subject to the provisions of Sections 3.04(g)
and 6.01, shall not preclude assertion by any Indemnitee of any other
rights or the seeking of all other remedies against any Indemnifying Party.


 


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SECTION 4.05.  Inducement.  The Parties acknowledge and agree that each
Party’s willingness to cause, effect and consummate the Separation has been conditioned
upon and induced by the Parties’ covenants and agreements in this Agreement and
the Transaction Documents, including the Parties’ assumption and/or retention
of specified Liabilities pursuant to the Separation and the provisions of the
Transaction Documents and the Parties’ covenants and agreements contained in
this Agreement.


SECTION 4.06.  Post-Separation Date Conduct.  The Parties acknowledge that, after the
Separation Date, each Party will be independent of the other Party, with
responsibility for its own actions and inactions and its own Liabilities
relating to, arising out of or resulting from the conduct of its business
following the Separation Date, except as may otherwise be provided in any
Principal Transaction Document, and each Party shall (except as otherwise
provided in this Agreement, including Sections 3.01 and 3.02)
use reasonable best efforts to prevent such Liabilities from being borne
inappropriately by the other Party.


SECTION 4.07.  Late Payments.  Except as provided in any Transaction
Document, any amount not paid when due pursuant to this Agreement or any
Transaction Document (and any amounts billed or otherwise invoiced or demanded
and properly payable that are not paid within 30 days of the date of such bill,
invoice or other demand) shall accrue interest at a rate per annum equal to the
Prime Rate plus 2%.


ARTICLE V


COOPERATION; CONFIDENTIALITY


SECTION 5.01.  Other Agreements Providing for Exchange of
Information.  The rights and
obligations granted under this Article V are subject to any specific
limitations, qualifications or additional provisions on the sharing, exchange,
retention or confidential treatment of Information set forth in the Separation
Agreement or any other Principal Transaction Documents.


SECTION 5.02.  Production of Witnesses; Records;
Cooperation.


(a)  Availability
of Witnesses and Information Generally. 
After the Separation Date, except in the case of an adversarial
Proceeding by one Party or any of its Subsidiaries, officers, directors or
employees against another Party or any of its Subsidiaries, officers, directors
or employees, each Party shall use commercially reasonable efforts to make
available to the other Parties, upon written request, the former, current and
future directors, officers, employees, other personnel and agents of such Party
or its Subsidiaries as witnesses and any books, records or other documents
within its control or which it otherwise has the ability to make available, to
the extent that any such Person (giving consideration to business and personal
demands of such directors, officers, employees, other personnel and agents) or
books, records or other documents may reasonably be required in connection with
any Proceeding (including the creation or establishment of due diligence defenses)
in which the requesting Party may from time to time be involved, regardless of
whether such Proceeding is a matter with respect to which indemnification may
be sought hereunder.  The requesting
Party shall bear all reasonable out of 


 


21

















 


pocket costs and expenses incurred by the other Parties in connection
with their compliance with such request.


(b)  Availability
of Witnesses and Information to Indemnifying Party.  If an Indemnifying Party chooses to defend or
to seek to compromise or settle any Third Party Claim, the other Party shall
use commercially reasonable efforts to make available to such Indemnifying
Party, upon written request, the former, current and future directors,
officers, employees, other personnel and agents of such Party or its
Subsidiaries as witnesses and any books, records or other information within
its control or which it otherwise has the ability to make available, to the
extent that any such Person (giving consideration to business demands of such
directors, officers, employees, other personnel and agents) or books, records
or other information may reasonably be required in connection with such
defense, settlement or compromise, or the prosecution, evaluation or pursuit
thereof, as the case may be, and shall otherwise cooperate in such defense,
settlement or compromise, or such prosecution, evaluation or pursuit, as the
case may be; provided, however, that such other Party, subject to
Section 5.02(f), shall not be obligated to produce any books, records or
other information if such other Party reasonably believes, after consultation
with its counsel, that the production of such books, records or other
information would cause the forfeiture of an attorney-client privilege that is applicable
to such books, records or other information and entering into a joint defense
agreement as contemplated by Section 5.02(f) is not practicable or
appropriate.


(c)  Cooperation
Generally.  Without limiting any
provision of this Section 5.02, the Parties shall cooperate and consult,
and shall cause each of their respective Subsidiaries, officers, employees and
agents to cooperate and consult to the extent necessary or advisable with
respect to any Proceedings (other than a Proceeding by one Party or any of its
Subsidiaries against the other Party or any of its Subsidiaries).


(d)  Infringement
Claims.  Each Party acknowledges, on
its own behalf and on behalf of its Subsidiaries, that it has no basis to
believe that the business or any act, product, technology or service (including
products, technology or services currently under development) of the other
Party infringes, dilutes or misappropriates any intellectual property of a
Third Party or constitutes unfair competition or trade practices under the laws
of any jurisdiction.  Without limiting
any provision of this Section 5.02, each of the Parties agrees to
cooperate, and to cause each of its respective Subsidiaries to cooperate, with
each other in the defense of any infringement or similar claim by a Third Party
with respect to any intellectual property and shall not claim to acknowledge,
or permit any of its respective Subsidiaries to claim to acknowledge, the
validity, enforceability or infringing use of any intellectual property of a
Third Party in a manner that would hamper or undermine the defense by the other
Party or its Subsidiaries of such infringement or similar claim.


(e)  Business
Conflicts to be Disregarded.  The
obligation of the Parties to provide witnesses pursuant to this Section 5.02
is intended to be interpreted in a manner so as to facilitate cooperation and
shall include the obligation to provide as witnesses those officers and
employees designated by the Party seeking such witness, without regard to
whether the witness or the employer of the witness could assert a possible
business conflict (subject to the exception set forth in the first sentence of Section
5.02(a)).


 


22

















 


(f)  Joint
Defense Agreement.  In connection
with any matter contemplated by this Section 5.02, the Parties will
negotiate in good faith to enter into a mutually acceptable joint defense
agreement where appropriate so as to maintain to the extent practicable any
applicable attorney-client privilege, work product immunity or other applicable
privileges or immunities of each of the Parties and their respective
Subsidiaries.


SECTION 5.03.  Confidentiality.


(a)  Confidentiality.  Subject to Section 5.04, SG, on behalf
of itself and each SG Subsidiary, and Cowen Inc., on behalf of itself and each
Cowen Subsidiary, agrees to hold, and to cause its respective directors,
officers, employees, agents, accountants, counsel and other advisors and
representatives to hold, in strict confidence, with at least the same degree of
care that applies to SG’s confidential and proprietary information pursuant to
policies in effect as of the Separation Date, all Information concerning the
other (or its business) and the other’s Subsidiaries (or their respective
businesses) that is either in its possession (including Information in its
possession prior to the Separation Date) or furnished by the other or the other’s
Subsidiaries or their respective directors, officers, employees, agents,
accountants, counsel and other advisors and representatives at any time
pursuant to this Agreement or any Transaction Document, and shall not use any
such Information other than for such purposes as may be expressly permitted
hereunder or thereunder, except, in each case, in connection with the
prosecution of claims for indemnity or to the extent that such Information has
been: (i) in the public domain through no fault of such Party or its
Subsidiaries or any of their respective directors, officers, employees, agents,
accountants, counsel and other advisors and representatives; (ii) later
lawfully acquired from other sources by such Party (or any of its Subsidiaries)
which sources are not themselves bound by a confidentiality obligation; or
(iii) independently generated without reference to any proprietary or confidential
Information of the other Party.


(b)  No
Release; Return or Destruction.  Each
Party agrees not to release or disclose, or permit to be released or disclosed,
any Information addressed in Section 5.03(a) to any other Person, except
its directors, officers, employees, agents, accountants, counsel and other
advisors and representatives who need to know such Information, and except in
compliance with this Section 5.03 and Section 5.04.  Without limiting the foregoing, when any
Information furnished by the other Party after the Separation Date pursuant to
this Agreement or any Transaction Document is no longer needed for the purposes
contemplated by this Agreement or any Transaction Document, each Party shall,
at such Party’s option, promptly after receiving a written request from the
other Party either return to the other Party all such Information in a tangible
form (including all copies thereof and all notes, extracts or summaries based
thereon) or certify to the other Party that it has destroyed such Information
(and such copies thereof and such notes, extracts or summaries based thereon); provided,
however, that each Party may retain copies of such Information if
necessary to satisfy applicable regulatory requirements.


SECTION 5.04.  Protective Arrangements.  In the event that SG or Cowen Inc. or any of
their respective Subsidiaries either determines on the advice of its counsel
that it is required to disclose any Information pursuant to applicable law or
the rules or regulations of any Governmental Authority or receives any demand
under lawful process or from any Governmental Authority to disclose or provide
Information of another Party (or such other 


 


23

















 


Party’s Subsidiaries) that is subject to the confidentiality
provisions hereof, the Party contemplating such disclosure shall notify the
other Party prior to disclosing or providing such Information and shall
cooperate at the expense of the requesting Party in seeking any reasonable
protective arrangements requested by such other Party.  Subject to the foregoing, the Party that
received such request, or its Subsidiaries, may thereafter disclose or provide
Information to the extent required by such law (as so advised by counsel) or by
lawful process or such Governmental Authority.


ARTICLE VI


DISPUTE RESOLUTION


SECTION 6.01.  Disputes.


(a)  Agreement
to Arbitrate Disputes.  The Parties
acknowledge that, from time to time after the Separation Date, a controversy,
dispute or claim may arise relating to a Party’s rights or obligations under
this Agreement.  The Parties agree that
any controversy, dispute or claim (whether arising in contract, tort or
otherwise) arising out of or in connection with the performance or breach of
this Agreement, including any question regarding its enforcement, existence,
validity, interpretation or termination shall be resolved by binding
arbitration.


(b)  Conduct
of the Arbitration.  An arbitration
conducted pursuant to this Article VI shall be administered by and held
before the American Arbitration Association (“AAA”) in accordance with
the laws of the State of New York and the AAA’s then current Commercial
Arbitration Rules.  Notwithstanding the
foregoing, no pre-hearing discovery shall be permitted unless specifically
authorized by the arbitration panel, provided, however, that
unless the Parties agree otherwise, there shall be no pre-hearing depositions
or interrogatories.  Any hearing or
authorized discovery shall take place in New York City, unless the Parties
agree otherwise.


(c)  Composition
and Selection of Panel:  Unless the
Parties agree otherwise, the arbitration panel shall consist of three persons
appointed by the AAA from its National Roster pursuant to Rule R-11 of the AAA’s
Commercial Arbitration Rules.


(d)  Limitations
on Available Relief.  The arbitration
panel shall have no authority or jurisdiction to award consequential, exemplary
or punitive damages.


(e)  Confidentiality.  The Parties agree that any arbitration
commenced pursuant to this Article VI shall be and remain confidential,
and the Parties shall not make any public statements concerning any
arbitration, except to the extent that disclosure of or any statement
concerning any arbitration is, in the opinion of counsel for one of the
Parties, required by law or applicable rules or regulations.


(f)  Final
and Binding Nature of Arbitration Award. 
Any award rendered by the arbitrators shall be final and binding between
the Parties and judgment thereon may be entered in any court of competent
jurisdiction.  If a Party seeks to vacate
or to appeal an award rendered by the arbitration panel and such Party’s motion
to vacate is denied or its appeal is unsuccessful, then that Party shall pay
the costs and expenses, including reasonable attorneys’ fees, of the prevailing
Party.


 


24

















 


ARTICLE VII


TERMINATION


SECTION 7.01.  Termination.  This Agreement and all Transaction Documents
may be terminated or abandoned at any time prior to the Separation Date by and
in the sole discretion of SG without the approval of Cowen Inc.  In the event of such termination, no Party
shall have any Liability of any kind to any other Party.  After the Separation Date, this Agreement may
not be terminated except pursuant to Sections 2.02(f) or 2.15 of
the Separation Agreement or by an agreement in writing signed by all of the
Parties.


ARTICLE VIII


MISCELLANEOUS


SECTION 8.01.  Counterparts; Entire Agreement; Facsimile
Signatures.


(a)  Counterparts.  This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a
signature page to this Agreement by facsimile shall be as effective as delivery
of an executed original of such counterpart to this Agreement.


(b)  Entire
Agreement.  This Agreement, the
Transaction Documents and the exhibits, schedules and annexes hereto and
thereto contain the entire agreement between the Parties with respect to the
subject matter hereof and supersede all previous agreements, negotiations,
discussions, writings, understandings, commitments and conversations with
respect to such subject matter, and there are no agreements or understandings
between the Parties other than those set forth or referred to herein or
therein.  Notwithstanding any other
provisions in this Agreement to the contrary, in the event and to the extent
that there is a conflict between the provisions of this Agreement and the
provisions of any Principal Transaction Document, the provisions of such
Principal Transaction Document shall control.


(c)  Facsimile
Signatures.  Each Party acknowledges
that it and the other Parties may execute this Agreement by facsimile, stamp or
mechanical signature.  Each Party
expressly adopts and confirms each such facsimile, stamp or mechanical
signature made in its respective name as if it were a manual signature, agrees
that it shall not assert that any such signature is not adequate to bind such
Party to the same extent as if it were signed manually and agrees that at the
reasonable request of the other Party at any time it shall as promptly as
reasonably practicable cause this Agreement to be manually executed (any such
execution to be as of the date of the initial date thereof).


SECTION 8.02.  Governing Law.  This Agreement shall be governed by and
construed and interpreted in accordance with the laws of the State of New York,
irrespective of the choice of laws principles of the State of New York, as to all
matters, including matters of validity, construction, effect, enforceability,
performance and remedies.


 


25

















 


SECTION 8.03.  Assignability.  This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their respective successors and
permitted assigns; provided, however, that no Party hereto may
assign its rights or delegate its obligations under this Agreement without the
express prior written consent of the other Parties hereto.  Notwithstanding the foregoing, this Agreement
shall be assignable in whole in connection with a merger or consolidation or
the sale of all or substantially all of the Assets of a Party so long as the
resulting, surviving or transferee Person assumes all the obligations of the
relevant party thereto by operation of law or pursuant to an agreement in form
and substance reasonably satisfactory to the other Party.


SECTION 8.04.  Third Party Beneficiaries.  Except for the indemnification rights under
this Agreement of any SG Indemnitee or Cowen Indemnitee in their respective
capacities as such and for the releases under Article II of any Person
provided therein: (a) the provisions of this Agreement are solely for the
benefit of the Parties and their respective Subsidiaries, after giving effect
to the Separation, and are not intended to confer upon any Person except the
Parties and their respective Subsidiaries, after giving effect to the
Separation, any rights or remedies hereunder; and (b) there are no other Third
Party beneficiaries of this Agreement and this Agreement shall not provide any
other Third Party with any remedy, claim, liability, reimbursement, claim of
action or other right in excess of those existing without reference to this
Agreement.


SECTION 8.05.  Notices.  All notices or other communications under
this Agreement must be in writing and shall be deemed to be duly given: (a)
when delivered in person; (b) upon transmission via confirmed facsimile
transmission, provided that such transmission is followed by delivery of a
physical copy thereof in person, via U.S. first class mail, or via a private
express mail courier; or (c) two days after deposit with a private express mail
courier, in any such case addressed as follows:


If to SG:


Société Générale


1221 Avenue of the Americas

New York, New York 10020

Attn:  General Counsel, SG Americas


Facsimile:  (212) 278-7432


 


With
a copy to:


Mayer, Brown, Rowe & Maw LLP

1675 Broadway

New York, New York  10019

Attn:  James B. Carlson

Facsimile:  (212) 262-1910


 


26

















 


 


If to Cowen:


Cowen Group, Inc.

1221 Avenue of the Americas

New York, New York 10020

Attn:  General Counsel

Facsimile:
 (646) 562-1861


 


With a copy to:


Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY  10036-6522

Attn:                    Lou R. Kling

                                                Thomas W.
Greenberg

Facsimile:  (212) 735-2000


 


Any Party may, by notice
to the other Party, change the address to which such notices are to be given.


SECTION 8.06.  Severability.  If any provision of this Agreement or the
application thereof to any Person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or
circumstances or in jurisdictions other than those as to which it has been held
invalid or unenforceable, shall remain in full force and effect and shall in no
way be affected, impaired or invalidated thereby, so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner adverse to any Party.  Upon such
determination, the Parties shall negotiate in good faith in an effort to agree
upon a suitable and equitable provision to effect the original intent of the
Parties.


SECTION 8.07.  Force Majeure.  No Party shall be deemed in default of this
Agreement to the extent that any delay or failure in the performance of its
obligations under this Agreement results from any cause beyond its reasonable
control and without its fault or negligence, such as acts of God, acts of
Governmental Authority, embargoes, epidemics, war, riots, insurrections, acts
of terrorism, fires, explosions, earthquakes, floods, unusually severe weather
conditions, labor problems or unavailability of parts, or, in the case of
computer systems, any failure in electrical or air conditioning equipment.  In the event of any such excused delay, the
time for performance shall be extended for a period equal to the time lost by
reason of the delay.


SECTION 8.08.  Headings.  The article, section and paragraph headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.


SECTION 8.09.  Survival of Covenants.  Except as expressly set forth in this
Agreement, the covenants, releases, indemnities, representations and warranties
contained in this 


 


27

















 


Agreement, and liability for the breach of any
obligations contained herein, shall survive the Separation Date and shall
remain in full force and effect thereafter.


SECTION 8.10.  Subsidiaries.  SG shall cause to be performed, and hereby
guarantees the performance of, all actions, agreements and obligations set
forth herein to be performed by any SG Subsidiary and Cowen Inc. shall cause to
be performed, and hereby guarantees the performance of, all actions, agreements
and obligations set forth herein to be performed by any Cowen Subsidiary.


SECTION 8.11.  Waivers.  The observance of any term of this Agreement
may be waived (either generally or in a particular instance and either
retroactively or prospectively) by the Party hereto entitled to enforce such
term, but such waiver shall be effective only if it is in a writing signed by
the Party hereto against whom the existence of such waiver is asserted.  Unless otherwise expressly provided in this
Agreement, no delay or omission on the part of any Party hereto in exercising
any right or privilege under this Agreement shall operate as a waiver thereof,
nor shall any waiver on the part of any Party hereto of any right or privilege
under this Agreement operate as a waiver of any other right or privilege under
this Agreement nor shall any single or partial exercise of any right or
privilege preclude any other or further exercise thereof or the exercise of any
other right or privilege under this Agreement. 
No failure by any Party to take any action or assert any right or
privilege hereunder shall be deemed to be a waiver of such right or privilege
in the event of the continuation or repetition of the circumstances giving rise
to such right unless expressly waived in writing by the Party hereto against
whom the existence of such waiver is asserted.


SECTION 8.12.  Amendments.  No provisions of this Agreement shall be
deemed amended, supplemented or modified unless such amendment, supplement or
modification is in writing and signed by an authorized representative of each
of the Parties.


SECTION 8.13.  Interpretation.  Words in the singular shall be deemed to
include the plural and vice versa and words of one gender shall be deemed to
include the other genders as the context requires.  The terms “hereof,” “herein,” and “herewith”
and words of similar import shall, unless otherwise stated, be construed to
refer to this Agreement as a whole and not to any particular provision of this
Agreement.  Article and Section
references are to the Articles and Sections to this Agreement unless otherwise
specified.  Unless otherwise stated, all
references to any agreement shall be deemed to include the exhibits, schedules
and annexes to such agreement.  The word “including”
and words of similar import when used in this Agreement shall mean “including,
without limitation,” unless the context otherwise requires or unless otherwise
specified.  The word “or” shall not be
exclusive.  Unless otherwise specified in
a particular case, the word “days” refers to calendar days.  References herein to this Agreement or any
Transaction Document shall be deemed to refer to this Agreement or such Transaction
Document as of the Separation Date and as it may be amended thereafter, unless
otherwise specified.  References to the
performance, discharge or fulfillment of any Liability in accordance with its
terms shall have meaning only to the extent such Liability has terms; if the
Liability does not have terms, the reference shall mean performance, discharge
or fulfillment of such Liability.


SECTION 8.14.  Mutual Drafting.  This Agreement and the Transaction Documents
shall be deemed to be the joint work product of the Parties and any rule of 


 


28

















 


construction that a document shall be interpreted or
construed against a drafter of such document shall not be applicable.


SECTION 8.15.  No Right to Set-Off.  Each Party shall pay the full amount of any
payments, costs and disbursements required under this Agreement, and shall not
set off, counterclaim or otherwise withheld any other amount owed by such Party
to other Persons on account of any obligation owed by other Persons to such
Party.


SECTION 8.16.  Enforcement Costs.  In the event that a Party breaches any
provision of this Agreement, such Party agrees to reimburse the non-breaching
Parties for all expenses related to the enforcement by the non-breaching Parties
of their respective legal rights under this Agreement, including but not
limited to the non-breaching Parties’ respective attorneys’ fees, court costs,
administrative fees and all other costs, fees and expenses incurred by the
non-breaching Parties that are associated with enforcing their respective legal
rights hereunder.


SECTION 8.17.  Remedies.  In the event of a breach by a Party of its
obligations under this Agreement, each other Party, in addition to being
entitled to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this
Agreement.  Each Party agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of any provision of this Agreement and hereby further
agrees that, in the event of any action for specific performance in respect of
such breach, it will waive the defense that a remedy at law would be adequate.


* * * *
*


 


29

















 


IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives.


	
   

  	
  SOCIÉTÉ
  GÉNÉRALE

   

   

  
	
   

  	
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  SG
  AMERICAS SECURITIES HOLDINGS, INC.

   

   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

   

  COWEN
  AND COMPANY, LLC

   

   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

   

  COWEN
  GROUP, INC.

   

   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title

  



 


 


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