Exhibit 10.18


 


EXECUTION COPY




	
   

  






 


INDEMNIFICATION AGREEMENT


 


by and among


 


SOCIÉTÉ GÉNÉRALE,


 


SG AMERICAS SECURITIES HOLDINGS, INC.,


 


COWEN AND COMPANY, LLC


 


and


 


COWEN GROUP, INC.


 


 


Dated as of July 11, 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

  	
  21

  
	
   

  	
  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

  	
  24

  
					



 


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 July 11,
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 Purchasers (except that any rights of SG or any SG Subsidiaries in respect
of the representations and warranties made to the MBF Purchasers 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
Purchasers” means the purchasers of the partnership interests in the
Merchant Banking Fund identified on Schedule 1.01(c).


 


“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 Purchasers (except that any rights of SG or any SG Subsidiaries
in respect of the representations and warranties made to the MBF Purchasers 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, effective as of the Separation Date,
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


 


14

















 


terms
of this Agreement and any Transaction Document, whether prior to, on or after
the Separation Date;


 


(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, effective as of the Separation Date,
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


 


15

















 


(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 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


 


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 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 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


 


17














 


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. 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.


 


18

















 


(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
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


 


19

















 


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).


 


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.


 


20

















 


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.


 


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


 


21

















 


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 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


 


22

















 


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)).


 


(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.


 


23














 


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
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.


 


24

















 


(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.


 


ARTICLE VII


 


TERMINATION


 


SECTION 7.01.      Termination. This Agreement
may not be terminated except 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


 


25

















 


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.


 


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.


 


* * * * *


 


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


 


	
   

  	
  SOCIÉTÉ GÉNÉRALE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jean-Philippe Coulier

  
	
   

  	
   

  	
  Name:

  	
  Jean-Philippe Coulier

  
	
   

  	
   

  	
  Title:

  	
  Chief Operating Officer, Americas

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SG AMERICAS SECURITIES HOLDINGS,

  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jean-Philippe Coulier

  
	
   

  	
   

  	
  Name:

  	
  Jean-Philippe Coulier

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COWEN AND COMPANY, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher A. White

  
	
   

  	
   

  	
  Name:

  	
  Christopher A. White

  
	
   

  	
   

  	
  Title:

  	
  Chief Administrative Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COWEN GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher A. White

  
	
   

  	
   

  	
  Name:

  	
  Christopher A. White

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  



 


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