EXHIBIT 10.5


 


LICENSE AND DISTRIBUTION AGREEMENT


 


AGREEMENT,
dated as of January 7, 1999 (the “Effective Date”), by and between ARCHIPELAGO
HOLDINGS, L.L.C., a Delaware limited liability company with its principal
offices at 100 South Wacker Drive, Suite 2060, Chicago, IL 60606
(“Archipelago”), and TOWNSEND ANALYTICS, LTD., an Illinois corporation with its
principal offices at 100 South Wacker Drive, Suite 2040, Chicago, Illinois
60606 (“TAL”).


 


WITNESSETH:


 


WHEREAS, TAL
develops, maintains, and supports financial software (“TAL Technology”) that
performs a variety of functions such as: (1) the display of market price
quotations, news, and other information for analysis (marketed by TAL under the
name “RealTick III”) and (2) order entry including initiating and transmitting
of trading orders, position management, etc. (marketed by TAL under the name
“RealTrade”);


 


WHEREAS, TAL
gathers, formats and distributes market data compromised of certain securities
and commodity prices and other data (“TAL Data”) and is licensed either
directly by the various exchanges or by third party providers to distribute
certain portions of that data to TAL subscribers;


 


WHEREAS,
Archipelago, through itself and its subsidiaries, among other things, operates
a NASD broker dealer which is a Qualified Electronic Communications Network as
defined by the 1997 SEC Order handling rules (“ECN”), and a service bureau;


 


WHEREAS,
Archipelago desires to use and to have Archipelago subscribers (“Subscribers”)
use TAL Technology with TAL Data to display market information for the purpose
of submitting trades to Archipelago and its Affiliates and other destinations
that Archipelago desires to make available to its Subscribers;


 


WHEREAS, TAL
is willing to license TAL Technology to Archipelago, on behalf of itself and
its existing and future Affiliates, and Archipelago, on behalf of itself and
its existing and future Affiliates, is willing to accept such license, pursuant
to the terms and subject to the conditions set forth below;


 


WHEREAS, TAL
is willing to license and distribute TAL Data to Archipelago and Archipelago
Subscribers, and Archipelago, on behalf of itself and existing and future
Affiliates, is willing to accept such license, pursuant to the terms and
subject to the conditions set forth below.


 


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


 

















 


ARTICLE I


 


DEFINITIONS


 


1.1           DEFINITIONS.


 


(a) As used in
this Agreement, the below terms have the following respective meanings:


 


“Affiliate” shall mean with respect to any Person (i) any other Person
that directly or indirectly through one or more intermediaries controls or is
controlled by or is under common control with such Person, (ii) any other
Person owning or controlling 25% or more of the outstanding voting securities
of or other ownership interests in such Person or (iii) any officer, director,
manager or partner of such Person.


 


“Agreement” means this License and Distribution Agreement.


 


“Archipelago” means Archipelago Holdings, L.L.C., a Delaware limited
liability company that is the signatory to this Agreement and all Affiliates of
Archipelago Holdings, L.L.C. existing as of the Effective Date or any entity
that shall in the future become an Affiliate of Archipelago Holdings, L.L.C.


 


“Archipelago Network” means any network, system or method (whether
broadcast, electronic, digital or other) operated or used by Archipelago at any
time for the distribution of Archipelago products and services to Subscribers.


 


“Archipelago Property” means the Intellectual Property Rights and other
proprietary and property rights in or embodied in any product, feature, package
or service that is the property of or licensed (with the exception of such
rights as are licensed hereunder) to Archipelago.


 


“Archipelago Subscriber” means any Person who is subscribing or will
subscribe to the Services, as defined below, of Archipelago on the Effective
Date of this License Agreement or thereafter.


 


“Business Day” means any day other than a Saturday, a Sunday or a day
on which banking institutions in Chicago, Illinois are authorized or obligated
by law, regulation or executive order to be closed.


 


“Calendar Month” means each calendar month occurring during the Term (as
defined in Section 7.1) or after the Term while Archipelago royalty payment
obligations pursuant to Section 4.1 are still in effect.


 


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“Effective
Date” means the date of this Agreement set forth above.


 


“Governmental Body” means any supranational body or organization,
country or government (federal, state, local, or foreign), any governmental or
regulatory body thereof, any political subdivision thereof, any agency,
instrumentality or authority thereof, any self-regulatory organization the
rules and regulations of which are enforceable by law (including any such
securities, futures or commodity exchange), or any court of competent
jurisdiction.


 


“Intellectual Property Right” means any patent, copyright, trademark,
service mark (and any application or registration in respect of any of the
foregoing), trade secret, know-how and other intellectual property right of any
type.


 


“Person” means an individual, corporation (including any non-profit
corporation), association, general or limited partnership, organization,
business, firm, limited liability company, joint venture, trust, estate, or
other entity, association or organization, whether constituting a separate
legal entity or not.


 


“Permission Server” means that component of the Server Technology that
(x) controls access by Subscribers to various features of the TAL Technology,
other components of the Server Technology and various data types and (y)
enables other components of the Server Technology.


 


“RealNet” means the RealTick III and RealTrade software combined with
TAL Data distributed over wide area networks such as frame relay or the public
Internet.


 


“RealTick III” means the TAL client software application used to
display market data and news consisting of, for example, quote screens, tables,
charts, and Level 2 displays including any modifications, enhancements,
upgrades, new versions or new releases thereof.


 


“RealTrade” means the TAL client software application RealTick III with
order entry and position management features including any modifications,
enhancements, upgrades, new versions or new releases thereof.


 


“Server Technology” means the software server applications, including
the Permission Server, that provides real-time and historical market prices and
news to the client applications such as RealTick III and RealTrade.


 


“Services” means the services (marketed by TAL as “RealNet”) to be
provided to Archipelago Subscribers consisting of the RealTick III to display
market data and news and RealTrade to enter trades and


 


3

















 


manage
positions (referred to as TAL Technology herein) and market data (referred to
as TAL Data herein).


 


“Subscriber” shall mean an Archipelago Subscriber.


 


“TAL Data” shall mean market information consisting of securities and
commodity prices and other data which is gathered from various stock exchanges,
commodity exchanges, news and other information sources either directly from
the sources to TAL or through third party providers and the structure, sequence
and organization of which is formatted by TAL.


 


“TAL Property” means the TAL Technology and TAL Data including the
Intellectual Property Rights and other proprietary and property rights therein
or embodied therein except those owned by third parties.


 


“TAL Subscriber Agreement” means the written agreement between TAL and
a Subscriber which licenses TAL Technology and TAL Data to the Subscriber. The
current version of agreement used by TAL for its customers in general is
attached to this Agreement as Schedule B.


 


“TAL Technology” means the software client application heretofore
marketed by TAL under the trade names “RealTick III(TM)”, “RealTick(TM)”, and
“RealTrade(TM)”, together with any modifications, upgrades, enhancements, new versions,
or new releases made thereto by TAL pursuant to the terms herein.


 


“TAL Toolkit” means TAL’s proprietary Application Programmer Interface
for TAL Trading Tools, consisting of documentation, software libraries and
sample code intended to permit development by independent software developers
of applications using data and services provided by TAL.


 


“Third Party Technology” means any component of the TAL Technology with
respect to which TAL does not own all Intellectual Property Rights and other
proprietary and property rights.


 


“Trade Server” means that component of the TAL Technology that among
other things contains databases of executed orders.


 


(b)           Each of the following terms is
defined in the Section indicated:


 


	
  Term

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Archipelago
  Permits

  	
   

  	
  6.1(d)

  
	
  Assertion

  	
   

  	
  8.1(d)

  
	
  Audited
  Party

  	
   

  	
  4.3(c)

  
	
  Auditing
  Party

  	
   

  	
  4.3(c)

  
	
  Claims
  Notice

  	
   

  	
  8.1(d)

  
	
  Confidential
  Information

  	
   

  	
  5.3(a)

  
	
  Damages

  	
   

  	
  8.1(a)

  
	
  Disclosing
  Party

  	
   

  	
  5.3(a)

  
	
  Indemnitee

  	
   

  	
  8.1(d)

  
	
  Indemnitor

  	
   

  	
  8.1(d)

  
	
  License Fee

  	
   

  	
  4.1(a)(i)

  
	
  New Releases

  	
   

  	
  2.1.3

  
	
  Other Party

  	
   

  	
  7.2(a)

  
	
  Qualifying
  Revenue

  	
   

  	
  4.1(a)(i)

  
	
  Receiving
  Party

  	
   

  	
  5.3(a)

  
	
  Referee

  	
   

  	
  4.3(d)

  
	
  Term

  	
   

  	
  7.1

  
	
  Terminating
  Party

  	
   

  	
  7.2(a)

  



 


4

















 


1.2           RULES OF CONSTRUCTION. As used in this Agreement, neutral pronouns
and any variations thereof shall be deemed to include the feminine and
masculine and all terms used in the singular shall be deemed to include the
plural, and vice versa, as the context may require. The words “herein,”
“hereof” and “hereunder” and other words of similar import refer to this
Agreement as a whole, including the Exhibits and Schedules hereto, as the same
may from time to time be amended or supplemented and not to any particular
subdivision contained in this Agreement. The word “including” when used herein
is not intended to be exclusive, or to limit the generality of the preceding
words, and means “including, without limitation”. References herein to
“dollars” and “$” are to United States dollars. References herein to an
Article, Section, subsection, clause, Exhibit or Schedule shall refer to the
appropriate Article, Section, subsection, clause, Exhibit or Schedule in or to
this Agreement. All references herein to times of the day are to the times of
the day in Chicago.


 


ARTICLE II


 


LICENSES


 


2.1           SOFTWARE.


 


2.1.1               TAL TECHNOLOGY.


 


(a)           TAL
hereby grants to Archipelago,


 


(i)                                     the
worldwide, non-exclusive, nontransferable (except as provided herein) right
during the Term (subject to payment in accordance with Section 4.1) to use,
reproduce and display the TAL Technology; and


 


(ii)                                  the
worldwide, non-exclusive, and transferable right (subject to payment in
accordance with Section 4.1) during the Term to market and distribute TAL
Technology and to grant to Archipelago Subscribers worldwide, non-exclusive,
non-transferable rights (subject to subsection (c)) (or, in


 


5

















 


Archipelago’s
discretion, less extensive rights, in either case subject to payment in
accordance with Section 4.1) to use the TAL Technology.


 


(b)                                 Subject
to the terms of this Agreement, Archipelago may use, reproduce, display, market
or distribute the TAL Technology to provide (or in connection with providing)
any Subscriber with the Service all in accordance with applicable law, and as
determined in the sole discretion of Archipelago provided the Subscriber enters
into a TAL Subscriber Agreement (it being understood that if such Subscriber
shall be permitted to use the TAL Technology in accordance herewith after
expiration of the Term, the provisions of this subsection shall continue to
apply). Archipelago and TAL acknowledge and agree that Subscribers with TAL
Subscriber Agreements expiring after the termination of this Agreement shall
survive such termination and Subscribers shall be permitted to use the TAL
Technology until the termination or expiration of such TAL Subscriber Agreement
pursuant to the terms thereof, as contemplated in Section 3.5 as long as
Archipelago fulfills its obligation to pay royalties and exchange fees as contemplated
in Section 4.1.


 


(c)                                  Archipelago
and its Subscribers are responsible for obtaining all regulatory licenses,
permissions and approvals necessary to use the functionality of TAL Technology.


 


(d)                                 Archipelago
and its Subscribers are responsible for providing all hardware and software
such as the Microsoft Windows operating system required to operate the TAL
Technology. If requested by Archipelago, TAL will provide a list, which may be
modified from time to time, of currently recommended hardware and software.


 


2.1.2               CERTAIN REPRESENTATIONS AND
WARRANTIES.


 


(a)           TAL
represents and warrants that:


 


(i)                                     it
is not subject to any contractual or other obligation or restriction that
prohibits or would prohibit, or impairs or would impair, its grant of licenses and
rights hereunder upon the terms and conditions provided herein;


 


(ii)                                  it
has all rights necessary to grant the licenses and rights it grants hereunder
under the terms and conditions provided herein without the approval or consent
of any third party (including all necessary rights, titles, licenses,
permissions and approvals in respect of the Third Party Technology);


 


(iii)                               the
TAL Technology and the use of, making copies of, displaying, marketing and
distribution thereof by Archipelago, upon the terms and conditions provided
herein and the use thereof by Subscribers


 


6

















 


upon the terms
and conditions provided herein, does not in any manner contravene, breach or
constitute an unauthorized use, infringement or misappropriation of any
Intellectual Property Right or any other property or proprietary right of any
Person (including the owners of all such rights in the Third Party Technology).


 


(iv)                              the
licenses and rights granted by it hereunder are free and clear of any liens,
claims or encumbrances whatsoever, however and whenever arising, that would, in
the aggregate, have a material adverse effect on the ability of Archipelago and
the Subscribers fully to use such licenses and rights in accordance with the terms
hereof;


 


(v)                                 to
the best of TAL’s knowledge, the TAL Technology does not contain any “computer
virus,” “time bomb” or other codes or programming devices that might or might
not be used to access, modify, delete, damage or deactivate the TAL Technology,
other than with respect to TAL’s “permissioning system”, and TAL has taken and
will take commercially reasonable steps in the development of the TAL
Technology to ensure that no such “computer virus” or “time bomb” is otherwise
contained in the TAL Technology.


 


(vi)                              TAL
EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED WITH RESPECT TO
THE TAL TECHNOLOGY AND RELATED MATERIALS, OR THEIR QUALITY OF PERFORMANCE
INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
TAL MAKES NO REPRESENTATION CONCERNING THE LIKELIHOOD OF PROFITABLE TRADING
USING THE TAL TECHNOLOGY. THE TAL TECHNOLOGY IS LICENSED “AS IS” AND “WITH ALL
FAULTS”. WITH THE EXCEPTION OF ARTICLE VIII, TAL AND ITS AFFILIATES WILL IN NO
WAY BE LIABLE FOR ANY MONEY DAMAGES RESULTING FROM CLAIMS MADE BY ARCHIPELAGO
OR THIRD PARTY(S) FOR ERRORS, OMISSIONS, OR DELAYS REGARDLESS OF CAUSE, IN THE
TAL TECHNOLOGY, OR FOR ANY DAMAGES (WHETHER DIRECT OR INDIRECT OR
CONSEQUENTIAL, PUNITIVE, SPECIAL OR EXEMPLARY, INCLUDING BUT NOT LIMITED TO
LOSS OF PROFITS) RESULTING THEREFROM, REGARDLESS OF CAUSE AND REGARDLESS OF
WHETHER TAL HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.


 


(b)                                 WITHOUT
PREJUDICE TO ANY OF THE RIGHTS OR REMEDIES OF ARCHIPELAGO HEREUNDER, TAL
COVENANTS AND AGREES THAT IT WILL TAKE SUCH ACTION AS IS NECESSARY TO CAUSE ITS
REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS SECTION TO BE TRUE AND CORRECT
THROUGHOUT THE TERM, AND THEREAFTER UNTIL SUCH FURTHER TIME AS ARCHIPELAGO’S
ROYALTY-PAYMENT OBLIGATION UNDER SECTION 4.1 SHALL HAVE CEASED. EXCEPT AS
PROVIDED IN CLAUSE (a)(v) ABOVE AND CLAUSE (c) BELOW, TAL DOES NOT WARRANT THAT
THE TAL TECHNOLOGY WILL BE ERROR OR BUG FREE OR THAT ALL ERRORS IN THE TAL
TECHNOLOGY CAN BE CORRECTED.


 


7

















 


(c)                                  Prior
to January 1, 1999, the Software shall recognize the advent of the year 2000
and will correctly recognize and manipulate date information relating to dates
on or after January 1, 2000 (including leap years) and the operation and functionality
of the Software will not be adversely affected by the advent of the year 2000
or any manipulation of data featuring information relating to dates before, on
or after January 1, 2000. The Software will comply with all regulatory and
governmental requirements concerning year 2000 compliance. TAL shall use its
best efforts to remediate any deficiency in the Software concerning year 2000
compliance.


 


2.1.3               ARCHIPELAGO TO RECEIVE BENEFIT OF
UPGRADES: DISCHARGE OF LIENS. TAL covenants and agrees that:


 


(a)           with
respect to upgrades, enhancements and new versions:


 


(i)                                     TAL
will make available to Archipelago upgrades and enhancements (“New Releases”)
of the TAL Technology after they become generally and commercially available so
that, unless directed otherwise by Archipelago in a specific case, the TAL
Technology supplied to Archipelago is at all times at least as useful, upgraded
and enhanced as the most useful, upgraded and enhanced technology supplied by
TAL to any Person (provided that the foregoing will not apply to any
enhancement made for the sole benefit of a third party who funded the
development expenses related thereto).


 


(ii)                                  Unless
Archipelago notifies TAL in writing within 60 days of its receipt of any New
Release that there are deficiencies in, or that further work is required with
respect to, such New Release, such New Release shall be deemed to have been
accepted by Archipelago and shall be installed without liability to either
party. If Archipelago accepts such New Release, it shall upgrade its
installation of software within a reasonable period of time.


 


(b)                                 if
TAL shall become aware of the existence of any liens, claims or encumbrances
with respect to the TAL Technology that shall arise at any time, and if any
such liens, claims or encumbrances would, in the aggregate, have a material
adverse effect on the ability of Archipelago or the Subscribers fully to use
the TAL Technology in accordance with the terms hereof, TAL will cause such
liens, claims or encumbrances to be removed, discharged or terminated as
promptly as possible. This Section 2.1.3(b) shall survive the termination of
this Agreement for any reason until such time as Archipelago royalty-payment
obligation under Section 4.1(a) shall have ceased.


 


2.1.4               ERROR CORRECTION.


 


(a)                                  TAL
will use commercially reasonable efforts to correct errors


 


8

















 


occurring in
the TAL Technology except as provided in subsection (c) below for the benefit
of Archipelago and its Subscribers, provided that with respect to any Third
Party Technology, if TAL does not have the right to correct errors in the same,
TAL will promptly notify the relevant third party licensor and use commercially
reasonable efforts to ensure that such error is corrected as promptly as possible
in accordance with the relevant licensing agreement.


 


(b)                                 To
the extent that any TAL Technology is upgraded or enhanced, TAL will continue
to correct errors in the replaced TAL Technology in accordance with this
Section for up to twelve (12) months after the date that the upgrade was made
available to Archipelago. TAL will not be required at any time during the term
of this Agreement to support more than two versions of the TAL Technology.


 


(c)                                  TAL
will not be responsible for (i) any error in the Archipelago Network, in an
Archipelago Subscriber’s network, in the public Internet, or in the operating
or telecommunications environment of Archipelago or any Subscriber; (ii) any
error in the Archipelago Materials or any software other than the TAL Technology;
(iii) any error caused by the use of any faulty or defective equipment, or any
equipment, platform, system or configuration of Archipelago or any Subscriber
or third party that is incompatible with the TAL Technology; (iv) any error
arising out of any use of the TAL Technology not in accordance with the terms
hereof; (v) any error in the TAL Technology caused by the use of faulty,
defective or incompatible third-party hardware or software (other than Third
Party Technology); or (vi) any error caused by the negligence or misconduct of
Archipelago, Archipelago Subscribers or any third party. At Archipelago’s
reasonable request, TAL, subject to its normal scheduling and commercial
considerations, will cooperate with Archipelago at Archipelago’s expense, in
evaluating such errors, recommending solutions, and, if reasonable, modifying
the TAL Technology to mitigate or remedy the error.


 


(d)                                 If
Archipelago at any time discovers an error in the TAL Technology, Archipelago
shall give TAL a written report thereof. Each such error report will include a
detailed description of the relevant error and of the operating environment
(hardware or software) in which the TAL Technology was running when such error
was discovered, and, a test case which demonstrates the error.


 


(e)                                  Subject
to subsections (a) and (c), TAL will use reasonable commercial efforts to
correct each reported error as soon as practicable, giving due regard to the
seriousness of such error (and in any event no later than the next generally
available release of the TAL Technology), provided that if Archipelago informs
TAL that correction of such error is critical to the use or operation of the
TAL Technology, or continuous and repeated failure of the TAL Technology, TAL
will use


 


9

















 


its best
efforts to correct such error as promptly as practicable. TAL will respond to
each error report within seven (7) days (or five (5) Business Days, in the case
of any error referred to in the preceding proviso), either correcting such
error or providing a plan for correcting the same together with an estimated
time frame for correction.


 


(f)                                    Except
as otherwise provided in subsection (c), TAL will be solely responsible for any
costs and expenses incurred by it under this Section (it being understood that
the parties will equitably apportion the expenses relating to any error that
involves a combination of one or more factors specified in subsection (c).


 


(g)                                 This
Section shall survive the termination of this Agreement for any reason until
such time as Archipelago’s royalty-payment obligation under Section 4.1(a)
shall have ceased.


 


2.1.5               CEASE TO USE THE TAL TECHNOLOGY.
As soon as Archipelago’s royalty-payment obligation under Section 4.1(a) shall
have ceased and subject to Section 2.1.1(b), Archipelago will stop using the
TAL Technology and make all reasonable efforts to cause Subscribers to stop
using the TAL Technology.


 


2.2           MARKET DATA.


 


2.2.1               TAL DATA.


 


(a)                                  TAL
hereby agrees, in the geographic areas designated in Schedule D, which may be
modified from time to time by TAL:


 


(i)                                     to
license TAL Data to Archipelago and distribute TAL Data to Archipelago over the
Archipelago Network for the purposes of displaying market information in the
TAL Technology (or other applications based on the TAL Toolkit); and


 


(ii)                                  to
license and distribute TAL Data to Archipelago Subscribers and to distribute
TAL Data to Archipelago Subscribers over the Archipelago Network, the
Archipelago Subscribers network, or the public Internet for the purpose of
displaying of market data in the TAL Technology (or other applications based on
the TAL Toolkit);


 


(b)           provided that:


 


(i)                                     Each
Archipelago Subscriber has entered into a properly executed TAL Subscriber
Agreement;


 


(ii)                                  Archipelago
and each Archipelago Subscriber provide properly executed exchange agreements,
and approval of exchanges and sources (if required) is received; and


 


10

















 


(iii)                               Archipelago
requests that a particular subscriber be activated. The procedure for making
this request will be specified in writing and modified from time to time by
mutual consent.


 


(c)                                  Archipelago
agrees, and understands that its Subscribers must agree, that:


 


(i)                                     TAL
and the sources and third party providers of TAL Data have no liability for the
accuracy or completeness of TAL Data or for delays, interruptions, or omissions
therein; that


 


(ii)                                  Archipelago
will not use TAL Data for any unlawful purpose; that


 


(iii)                               Archipelago
will not redistribute or resell TAL Data and that


 


(iv)                              the
arrangement between Archipelago and TAL, and Archipelago Subscribers and TAL
with respect to TAL Data is subject to termination if the agreement between TAL
and the sources or third party providers is terminated. Archipelago
acknowledges that the sources or the third party provider of the TAL Data may
terminate supply of the TAL Data without notice and that neither TAL nor the
sources or the third party providers shall have any liability in connection
therewith.


 


2.2.2               CERTAIN REPRESENTATIONS AND
WARRANTIES.


 


(a)                                  TAL
represents and warrants that it has the rights and licenses necessary to
distribute TAL Data to Archipelago and Archipelago Subscribers (including all
necessary rights, licenses, permissions and approvals in respect of the sources
or third party providers).


 


(b)                                 TAL
represents and warrants that TAL Data is gathered, formatted, displayed and
distributed by means of proprietary software and methodologies which are the
property of TAL and do not in any manner contravene, breach, infringe or
constitute an unauthorized use or misappropriation of any Intellectual Property
Right or any other property or proprietary right of any Person (including the
owners of all such rights in the Third Party Technology)


 


(c)                                  TAL
represents that the licenses and rights granted by it hereunder are free and
clear of any liens, claims or encumbrances whatsoever, however and whenever
arising, that would, in the aggregate, have a material adverse effect on the
ability of Archipelago and the Subscribers fully to use TAL Data in accordance
with the terms hereof;


 


(d)                                 TAL
EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED WITH RESPECT TO TAL
DATA, AND ITS QUALITY OF PERFORMANCE INCLUDING WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE. TAL MAKES NO REPRESENTATION CONCERNING
THE LIKELIHOOD OF PROFITABLE TRADING USING TAL DATA. TAL DATA IS LICENSED “AS
IS” AND “WITH ALL


 


11

















 


FAULTS”.


 


NEITHER TAL
NOR ANY OF ITS AFFILIATES, THE EXCHANGES, OR THIRD PARTY PROVIDERS, WARRANT
THAT TAL DATA WILL BE UNINTERRUPTED OR ERROR-FREE. ARCHIPELAGO EXPRESSLY AGREES
THAT USE OF TAL DATA IS AT ARCHIPELAGO’S SOLE RISK. WITH THE EXCEPTION OF
ARTICLE VIII, TAL AND ITS AFFILIATES, THE EXCHANGES AND SOURCES, AND THIRD PARTY
PROVIDERS WILL IN NO WAY BE LIABLE FOR ANY MONEY DAMAGES RESULTING FROM CLAIMS
MADE BY ARCHIPELAGO OR THIRD PARTY(S) FOR ERRORS, OMISSIONS, OR DELAYS
REGARDLESS OF CAUSE, IN TAL DATA OR IN ANY OF THE DATA AND INFORMATION
CONTAINED THEREIN, OR FOR ANY DAMAGES (WHETHER DIRECT OR INDIRECT OR
CONSEQUENTIAL, PUNITIVE, SPECIAL OR EXEMPLARY, INCLUDING BUT NOT LIMITED TO
LOSS OF PROFITS) RESULTING THEREFROM, REGARDLESS OF CAUSE AND REGARDLESS OF
WHETHER TAL HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.


 


2.2.3                                           ARCHIPELAGO
TO RECEIVE BENEFIT OF CHANGES IN SOURCES, INFORMATION AND AUTHORIZED
GEOGRAPHICAL AVAILABILITY.


 


(a)                                  Any
additions of new sources or other enhancements to TAL Data which may be made by
TAL during the term of this Agreement while not identified at this time, will
be offered to Archipelago and Archipelago Subscribers on terms and conditions
to be negotiated provided that (i) TAL has the necessary rights to convey such
new information to Archipelago and Archipelago Subscribers and (ii) upon the
reasonable request of TAL, TAL, Archipelago and Archipelago Subscribers execute
a separate TAL Subscriber Agreement or an amendment to the original TAL
Subscriber Agreement.


 


(b)                                 TAL
will make reasonable efforts to work with Archipelago to add sources and
geographical availability as needed by Archipelago on terms and conditions to
be separately negotiated.


 


2.2.4                                           ERROR
CORRECTION.


 


(a)                                  TAL
will use commercially reasonable efforts to correct errors occurring in TAL
Data except as provided in subsection (c) below for the benefit of Archipelago
and the Subscribers, provided that with respect to any error in data from the
sources or third party providers, if TAL does not have the right to correct
errors in the same, TAL will promptly notify the relevant third party source
and, use commercially reasonable efforts to ensure that such error is corrected
as promptly as possible in accordance with the relevant licensing agreement if
such provision exists.


 


12

















 


(b)                                 Archipelago
agrees that error correction in TAL Data may require a “New Release” in the TAL
Technology used by Archipelago and its Subscribers.


 


(c)                                  TAL
will not be responsible for (i) any error in the Archipelago Network, in an
Archipelago Subscriber’s network, in the public Internet, or in the operating
or telecommunications environment of Archipelago or any Subscriber, (ii) any
error in any software other than the TAL Technology, (iii) any error caused by
the use of any faulty or defective equipment, or any equipment, platform,
system or configuration of Archipelago or any Subscriber or third party that is
incompatible with TAL Data, (iv) any error arising out of any use of TAL Data
not in accordance with the terms hereof, (v) any error in TAL Data caused by
the use of faulty, defective or incompatible third-party hardware or software
or (vi) any error caused by the negligence or misconduct of Archipelago, its
employees or agents, Subscribers, or any third party. However, at Archipelago’s
reasonable request, TAL, subject to its normal scheduling and commercial
considerations, will cooperate with Archipelago at Archipelago’s expense, in
evaluating the error, recommending solutions, and, if reasonable, modifying TAL
Data to mitigate or remedy such error.


 


(d)                                 If
Archipelago at any time discovers an error in TAL Data or a Subscriber reports
an error in the TAL data to Archipelago, Archipelago shall promptly give TAL a
written report thereof. Each such error report will include a detailed
description of the relevant error and of the operating environment (hardware
and/or software) in which TAL Data was running when such error was discovered,
and, a test case that demonstrates the error.


 


(e)                                  Subject
to subsections (a) and (c), TAL will use reasonable commercial efforts to
correct each reported error as soon as practicable, giving due regard to the
seriousness of such error (and in any event no later than the next generally
available release of the TAL Technology if a change in the TAL Technology is
required), provided that if Archipelago informs TAL that correction of such
error is critical to the use or operation of TAL Data, or continuous and
repeated failure of TAL Data, TAL will use best efforts to correct such error
as promptly as practicable. TAL will respond to each error report within seven
(7) days (or five (5) Business Days, in the case of any error referred to in
the preceding proviso), either correcting such error or providing a plan for
correcting the same together with an estimated time frame for correction.


 


(f)                                    Except
as otherwise provided in subsection (c), TAL will be solely responsible for any
costs and expenses incurred by it under this Section (it being understood that
the parties will equitably apportion the expenses relating to any error that involves
a


 


13

















 


combination of
one or more factors specified in subsection (c) and one or more factors outside
the scope of subsection (c)).


 


(g)                                 This
Section shall survive the termination of this Agreement for any reason until
such time as Archipelago’s royalty-payment obligation under Section 4.1(a)
shall have ceased.


 


2.2.5        CEASE TO USE TAL DATA. As soon as Archipelago royalty-payment
obligation under Section 4.1 shall have ceased and subject to Section 2.1.1(b),
Archipelago will stop using TAL Data and make all reasonable efforts to cause
Subscribers to stop using TAL Data.


 


2.3           TRANSFER OF LICENSE. This Agreement may only be
transferred in a sale of all or substantially all of the assets of Archipelago
or a sale of a majority of the voting interests of Archipelago provided that
such third party must agree to be bound by the terms of this Agreement. This
Agreement may not be sold in any liquidation, foreclosure or insolvency
proceeding unless it is sold with all or substantially all the assets of
Archipelago.


 


ARTICLE III


 


CERTAIN ADDITIONAL AGREEMENTS WITH RESPECT TO

THE TAL TECHNOLOGY


 


3.1           TITLE AND RELATED MATTERS.


 


(a)                                  The
parties acknowledge and agree that, as between Archipelago and TAL, TAL shall
retain ownership of all TAL Property and Archipelago shall retain ownership of
all Archipelago Property. Neither Archipelago nor TAL will take any action with
respect to the TAL Property or Archipelago Property, respectively, inconsistent
with the foregoing acknowledgment.


 


(b)                                 All
Intellectual Property Rights or other property or proprietary rights if any
that may arise in Archipelago by operation of law after the date hereof in any
part of the TAL Property are hereby transferred by Archipelago to TAL. If such
transfer would at any time be considered invalid or ineffective, Archipelago
shall be deemed with effect from the date on which the relevant right arose to
have granted to TAL a perpetual, royalty-free and exclusive license to use such
right in any manner TAL sees fit, and Archipelago will, at the request of TAL
promptly do all reasonable acts and things necessary to transfer such right to
TAL (provided that TAL reimburses Archipelago for all of its reasonable
third-party expenses thereby incurred, including attorneys’ fees).


 


(c)                                  All
Intellectual Property Rights or other property or proprietary rights that may
arise in TAL by operation of law after the date hereof in any part of the
Archipelago Property are hereby transferred by TAL


 


14

















 


to Archipelago
on behalf of Archipelago. If such transfer would at any time be considered
invalid or ineffective, TAL shall be deemed, with effect from the date on which
the relevant right arose to have granted to Archipelago on behalf of
Archipelago, a perpetual, royalty-free and exclusive license to use such right
in any manner Archipelago sees fit, and TAL will, at the request of
Archipelago, promptly do all reasonable acts and things necessary to transfer
such right to Archipelago on behalf of Archipelago (provided that Archipelago
reimburses TAL for all of its reasonable third-party expenses thereby incurred,
including attorneys’ fees).


 


(d)                                 Unless
otherwise agreed in writing by the parties in a specific case, any computer
software or “user interface” developed by or on behalf of Archipelago for
purposes of enabling Subscribers to access and use the TAL Technology over the
Archipelago Network does not constitute a modification or enhancement to (or
derivative work based upon) the TAL Technology, and shall for all purposes
hereunder be deemed to be Archipelago Property.


 


(e)                                  This
Section shall survive the termination of this Agreement for any reason.


 


3.2           ATTRIBUTION.


 


(a)                                  Archipelago
shall not remove any copyright or proprietary notice of TAL appearing in the
display of TAL Technology.


 


(b)                                 It
is understood that Archipelago will not be required to use TAL’s name in the
name of the package of products and services offered to Subscribers using the
TAL Technology.


 


(c)                                  Archipelago
will not challenge TAL’s right, title or interest in any TAL trade name,
trademark or service mark or the validity or registration thereof or do or omit
to do anything the doing or omitting of which would contest or in any way
impair the rights of TAL therein.


 


3.3                                 PRICING. The price, if
any, charged to Subscribers for the Service, shall be determined by Archipelago
in its sole discretion.


 


3.4                                 TAL
SUBSCRIBER AGREEMENTS. Archipelago agrees that each of its respective
Subscribers shall enter into a TAL Subscriber Agreement prior to receiving the
Service. The TAL Subscriber Agreement is attached as Schedule B which may be
changed from time to time by mutual consent of TAL and Archipelago.


 


3.5                                 SUBSCRIBER
TERM. Archipelago agrees that the maximum term of any license of TAL Technology
to Subscribers will be no more than two years and that


 


15

















 


Archipelago will not license
TAL Technology to new Subscribers after the delivery of notice of termination
pursuant to Section 7.1 unless otherwise agreed by the parties.


 


3.6                                 NO
OBLIGATION TO MARKET TAL TECHNOLOGY OR TAL DATA. Nothing herein shall obligate
Archipelago to market the TAL Technology and TAL Data.


 


3.7                                 NO
REVERSE ENGINEERING; ETC. Archipelago will not without the express written
permission of TAL recompile, decompile, disassemble or reverse engineer the TAL
Technology. Archipelago shall not intentionally circumvent the Permission
Server system.


 


ARTICLE IV


 


ROYALTIES AND RELATED MATTERS


 


4.1           ROYALTIES.


 


(a)                                  In
full consideration of the rights and licenses granted by TAL under this
Agreement, Archipelago agrees to pay to TAL:


 


	
   

  	
  (i)

  	
  [***] percent ([***]%) of Qualifying Revenue for each RealTick III
  that is licensed to Archipelago or to an Archipelago Subscriber during any
  month. "Qualifying Revenue" shall mean the greater of either the
  License Fee set forth in Schedule C or the amount charged by Archipelago for
  the Service. "License Fee" shall mean the then current fee charged
  by TAL to other customers for RealTick III with features similar to those
  listed in Schedule A in its normal course of business. This royalty is for
  the TAL Technology and TAL Data components of the Service. This royalty will
  be calculated on the basis of the features described in Schedule A for each
  Subscriber account identified by the Permission Server during the relevant
  period. Schedule A may be modified from time to time by mutual consent of the
  parties to add other products with different features and/or exchanges; and

  
	
   

  	
  (ii)

  	
  for each order initiated through RealTick III or RealTrade that is
  executed (in full or in part), the amount of [***] cents ($[***]) per order.
  This royalty is for the RealTrade Features of the Service as described in
  Schedule A. This royalty will be calculated on the basis of the data in the
  Trade Servers for orders made during the period or from Archipelago records
  if Trade Server data is not available. The period used for calculating orders
  will be one month but will correspond to the clearing schedule which may not
  correspond to a Calendar Month. 
  Notwithstanding the foregoing, TAL hereby waives the [***] cents
  ($[***]) royalty for six (6) months from the Effective Date of this
  Agreement.  After such period, the
  parties shall reconsider whether to waive such fee for the following six
  months (6) or reinstate such fee.

  
	
   

  	
  (b)

  	
  Notwithstanding anything contained herein to the contrary, TAL agrees
  that Qualifying Revenue (and the royalties payable hereunder) are to be
  calculated only on the basic charge to Archipelago and its Subscribers for
  access to the Services, nothing contained herein gives TAL any interest in
  the commissions or subscription fees paid by Subscribers for any service
  other than the Services, or any incremental services provided in conjunction
  with the Services but without the use of the Server Technology.

  	 

	
   

  	
  (c)

  	
  Archipelago agrees that it is obligated to pay royalties for
  Subscribers receiving the Services and for orders executed. Should TAL not
  have access to the required databases or should databases be incorrect due to
  no fault of TAL, Archipelago will provide information necessary to calculate
  royalties due.

  	 

					



 


4.2           ROYALTY PAYMENT PROCEDURES.


 


(a)                                  Royalty
payments owed under Section 4.1(a)(i) in respect of each Calendar Month shall
be paid in advance of Service.


 


(b)                                 Subject
to the waiver provision contained therein, royalty payments owed under Section
4.1(a)(ii) shall be paid in arrears of Service within ten (10) Business Days
following each billing period.


 


(c)                                  All
payments shall be made in U.S. dollars.


 


(d)                                 Any
royalty payment required to be made hereunder will be made to a party at its
address for notices set forth in Section 9.3 or as otherwise directed by such
party in writing.


 












*** Certain information on this
page has been omitted and filed separately with the Commission. Confidential
treatment has been requested with respect to the omitted portions.


 


16

















 


4.3           AUDITING.


 


(a)                                  Archipelago
will keep proper books of record and account consistent with generally accepted
accounting principles in connection with its licensing of the TAL Technology.
Such reports shall be deemed the Confidential Information of Archipelago and
may not be used by TAL for any purpose other than verification or collection of
the royalty amounts owed it hereunder.


 


(b)                                 Archipelago
shall make a remote dial-up connection to the Trade Server available to TAL in
order for TAL to monitor Archipelago’s licensing of the TAL Technology.
Archipelago shall provide a modem and pay the basic monthly telecommunication
line charges to establish the connection. TAL shall pay for all dial-up
connection time charges. Such access may not be used by TAL for any purpose
other than verification of the royalty amounts owed it hereunder.


 


(c)                                  No
more than once during each period of twelve (12) consecutive months,
Archipelago (in such capacity, the “Audited Party”), upon request of TAL (in
such capacity, the “Auditing Party”), will permit independent auditors selected
by the Auditing Party and approved by the Audited Party (which approval may not
be unreasonably withheld) to make such investigation of the books of record and
account of the Audited Party referred to in subsection (a) as is deemed
necessary by such auditors to verify and confirm the amount of any royalty
payment required to be made by the Audited Party pursuant to Section 4.1. Such
auditors shall, upon request of the Audited Party, deliver a letter to the
Audited Party agreeing to abide by the restrictions set forth in Section 5.3
applicable to a Receiving Party.


 


(d)                                 If
the Audited Party disagrees with any determination made by the independent
auditor in subsection (b), the Audited Party and the Auditing Party shall
attempt to resolve such disagreement through good-faith negotiations. If
requested by the Audited Party, the independent auditors shall provide the
Audited party and its auditors and legal counsel reasonable access to the work
papers of the independent auditor. If the Audited Party and the Auditing Party
cannot resolve such disagreement within thirty (30) days of the initial notice
of disagreement from the Audited Party to the Auditing Party, the disagreement
shall be referred to another auditor mutually agreed by the Audited Party and
Auditing Party, which in the absence of such agreement shall be Ernst &
Young (the “Referee”). The decision of the Referee on this disagreement shall
be final, non-appealable and binding on all parties.


 


(e)                                  The
fees and expenses of the independent auditors referred to in subsection (c)
shall be borne by the Auditing Party; provided, that if there is a final
determination pursuant to subsection (b) that within any period of twelve (12)
consecutive months, the amount of royalties payable to the Auditing Party in
respect of such period exceeded the amount actually paid to the Auditing Party
in respect of such period


 


17

















 


by more than
20% of such amount actually paid, then, in addition to promptly remitting the
unpaid royalties to the Auditing Party, and without prejudice to any other
rights of the Auditing Party hereunder, the fees and expenses of such auditors
in respect of such audit shall be borne (or reimbursed, if applicable) by the
Audited Party.


 


4.4                                 EXCHANGE
FEES AND OTHER FEES TO SOURCES. Archipelago will pay any fees for sources,
including exchange fees, that are required to be paid by TAL for market data
provided to Archipelago or Archipelago Subscribers along with the royalty fees
paid in Section 4.1(a)(i).


 


4.5                                 ROYALTY
FOR INITIAL MONTH. Royalties due for Subscribers commencing Service during a
given month will be prorated for that portion of the month’s service fee.
Exchange fees for a given month will be the full month’s fee.


 


4.6                                 SURVIVAL.
This Article IV shall survive termination of this Agreement for any reason
until Archipelago shall have made all required royalty payments.


 


ARTICLE V


 


CERTAIN ADDITIONAL COVENANTS


 


5.1                                 (a)           ONGOING SUPPORT BY ARCHIPELAGO.
During the Term and following the Term as long as Subscribers continue to use
the TAL Technology pursuant to a TAL Subscriber Agreement, Archipelago will be
responsible for providing “first level” support to Subscribers and will supply
appropriately trained staff to provide technical support to Subscribers in the
use of the TAL Technology and to maintain and support the implementation of the
TAL Technology. Archipelago will designate a support manager to be the primary
contact with TAL for support issues.


 


(b)           ONGOING SUPPORT BY TAL.


 


(i)                                     During
the Term, TAL will supply staffing in order to train Archipelago employees in
the use of the TAL Technology and to support the implementation of the TAL
Technology via the Archipelago Network. TAL will designate a support manager to
be the primary contact with Archipelago for support issues.


 


(ii)                                  During
the Term, TAL will provide Archipelago with ongoing “second level” technical
support relating to the operation of the TAL Technology to Archipelago’s
support staff, via phone or e-mail during TAL’s normal business hours.


 


18

















 


(iii)                               Following
the Term, TAL will provide “second level” technical support via phone or e-mail
during TAL’s normal business hours to Archipelago relating to the operation of
the TAL Technology, at rates, including reimbursement of any related travel and
lodging expenses, that (except where Archipelago is in material breach of its
obligations hereunder) are at least as favorable as the rates charged by TAL to
any third party for similar services under similar terms, circumstances and
conditions.


 


(iv)                              This
Section shall survive termination of this Agreement for any reason other than
Archipelago’s material breach of the terms of this Agreement.


 


5.2           USE OF THE PARTIES’ NAMES.


 


(a)                                  Neither
party shall use the name, logo, initials or other designation of the other
party or any of its Affiliates, or refer to the other party or any of its
Affiliates, directly or indirectly, in any press release, advertisement,
marketing or other promotional materials, other than (i) solely in internal
materials, (ii) with prior written approval from such other party, which
approval shall not be unreasonably withheld, conditioned or delayed, (iii) in
accordance with subsection (b) or (iv) in accordance with Section 5.3(c)(v).


 


(b)                                 If
a party proposes by notice to the other to use specific advertising, marketing
or other promotional materials that include the name of or other reference to
the other party or any of its Affiliates, and such other party does not object
thereto within 30 days of such notice, the notifying party shall be permitted
to use the specific advertising, marketing or other promotional materials
referred to in its notice. Advertising, marketing and other promotional
materials that are substantially identical to materials previously approved
need not be submitted for approval again.


 


(c)                                  This
Section 5.2 shall survive the termination of this Agreement for any reason
until such time as the royalty-payment obligations under Section 4.1(a) shall
have ceased.


 


5.3           MUTUAL CONFIDENTIALITY RESTRICTIONS.


 


(a)                                  The
parties acknowledge that each party (in such capacity, a “Disclosing Party”)
has disclosed or will disclose certain Confidential Information to the other
and its Affiliates (in such capacity, a “Receiving Party”). For purposes
hereof, and subject to the provisions of subsection (c), the term “Confidential
Information” means (i) any information relating to the Disclosing Party or its
Affiliates and designated in writing as confidential, proprietary or marked
with words of like import and (ii) any


 


19

















 


information
relating to the Disclosing Party or its Affiliates that is orally conveyed, if
the Disclosing Party provides specific written notice that such oral
communication shall be deemed Confidential Information and delivers such
writing to the Receiving Party within ten (10) days of the oral conveyance.


 


(b)                                 The
Receiving Party acknowledges the confidential and proprietary nature of the
Confidential Information and agrees not to reveal or disclose any Confidential
Information for any purpose (except as permitted by the second immediately
succeeding sentence) to any other Person who is not an employee, manager,
consultant, member or Affiliate of the Receiving Party, or to use any
Confidential Information for any purpose other than as contemplated hereby, in
each case, without the prior written consent of the Disclosing Party. The
Receiving Party agrees to maintain adequate security procedures and take
reasonable precautions (no less rigorous than the Receiving Party takes with
respect to its own comparable Confidential Information) to prevent misuse,
unauthorized or inadvertent disclosure or loss of the Confidential Information
of the Disclosing Party. In the event that a Receiving Party wishes to disclose
Confidential Information to one of its professional advisors, agents or
business partners it may do so only if that professional advisor agrees to
abide by the terms of this Section.


 


(c)                                  Notwithstanding
anything contained herein to the contrary, Confidential Information shall not
include information which:


 


(i)                                     
at or prior to the time of disclosure by the Disclosing Party was known to the
Receiving Party other than by reason of unlawful appropriation by the Receiving
Party;


 


(ii)                                  at
or after the time of disclosure by the Disclosing Party becomes generally
available to the public through no act or omission on the Receiving Party’s
part;


 


(iii)                               is
developed by the Receiving Party independent of any Confidential Information it
receives from the Disclosing Party;


 


(iv)                              is
received by the Receiving Party receives from a third party not known by the
Receiving Party not to be free to make such disclosure without breach of any
legal obligation; or


 


(v)                                 is
required to be disclosed pursuant to any statute, regulation, order, subpoena
or document discovery request, provided that prior written notice of such
disclosure is furnished to the Disclosing Party as soon as practicable in order


 


20

















 


to afford the
Disclosing Party an opportunity to seek a protective order (it being agreed
that if the Disclosing Party is unable to obtain or does not seek a protective
order and the Receiving Party is legally compelled to disclose such
information, disclosure of such information may be made without liability).


 


(d)                                 Upon
the request of the Disclosing Party, the Receiving Party shall use all
reasonable efforts to identify and collect all Confidential Information held by
the Receiving Party in note, memorandum, print, letter, report or other written
or electronic form, and, at the election of the Disclosing Party, the Receiving
Party shall:


 


(i)                                     promptly
return to the Disclosing Party all such Confidential Information identified and
collected by the Receiving Party, including all copies thereof;


 


(ii)                                  promptly
destroy all such Confidential Information identified and collected by the
Receiving Party, including all copies thereof.


 


In either
case, the Receiving Party shall deliver a certificate, signed by an appropriate
officer of the Receiving Party, stating that the Receiving Party has complied
in full with the terms of this subsection (d).


 


(e)                                  The
Receiving Party shall notify the Disclosing Party immediately upon discovery of
any prohibited use or disclosure of the Confidential Information, or any other
breach of this Section by the Receiving Party, and shall fully cooperate with
the Disclosing Party to help the Disclosing Party regain possession of the
Confidential Information and prevent the further prohibited use or disclosure
of the Confidential Information.


 


(f)                                    The
Receiving Party agrees that it will not remove any statutory copyright notice
or evidence of confidentiality contained on or included in the Confidential
Information. The Receiving Party will reproduce any such notice or evidence on
any reproduction of all or any part of the Confidential Information, and, if
requested by the Disclosing Party, will, at the election of the Receiving
Party, either attach such a notice or evidence on any Confidential Information
inadvertently provided without such a notice or evidence, or return or destroy
such Confidential Information in accordance with subsection (e).


 


(g)                                 This
Section shall survive until the third anniversary of the termination of this
Agreement in accordance with Article VIII.


 


(h)                                 The
terms of this Agreement shall be deemed to be Confidential Information of both


 


21

















 


parties but
may be disclosed by Archipelago to its permitted sublicensees and prospective
sublicensees who agree to be bound by the confidentiality provisions of this
Agreement.


 


5.4                                 OTHER PRODUCTS AND
SERVICES. Nothing contained in this Agreement shall be deemed to preclude or in
any way limit the ability and right of Archipelago to develop or exploit any
technology or data or other product or service other than the TAL Technology,
whether or not competitive with, similar to or exploited in conjunction with
the TAL Technology (it being understood that this subsection shall not (1)
confer any right in Archipelago to take any action with respect to the TAL
Property in violation of Section 3.1(a)) or (2) limit any remedies available to
TAL for infringement of the TAL Property or any violations of Section 5.3
herein.


 


5.5                                 SALE OF BUSINESS. As a
condition to the sale, transfer, lease, assignment or other disposition by TAL,
to or in favor of a Person who is not an Affiliate of TAL’s, of all or more
than a de minimis portion of TAL’s businesses or assets relating to TAL’s
performance hereunder, TAL shall require that such Person execute an instrument
agreeing to be bound by the provisions of this Agreement as and to the extent
of TAL. This Section shall survive the termination of this Agreement for any
reason until such time as the royalty-payment obligations under Section 4.1(a)
shall have ceased.


 


5.6           CONCERNING REIMBURSABLE EXPENSES.


 


(a)                                  Prior to incurring
any reimbursable expense for a given project or request made by Archipelago
hereunder, TAL will provide Archipelago with a written good faith estimate of
the expenses for such project or request, broken down into reasonable detail
(provided that Archipelago may, with TAL’s consent, issue a letter of
authorization).


 


(b)                                 If TAL becomes aware
that the reimbursable expenses relating to such project or request are likely
to be more than 25% in excess of the latest estimate thereof supplied to
Archipelago, and in any event upon expending 75% of the amount of any expenses
estimated in accordance with subsection (a), TAL will again provide Archipelago
with a written good faith estimate of the amount of expense required to
complete the relevant project or comply with the relevant request, broken down
into reasonable detail.


 


(c)                                  Archipelago will
respond to each estimate delivered in accordance with subsection (a) or (b)
within thirty (30) days. If Archipelago notifies TAL that it disagrees with or
otherwise objects to any such estimate on any grounds, and the parties are not
subsequently able to reach agreement, or if Archipelago fails to respond to TAL
within the required time, TAL will not be under an obligation to proceed with
the relevant project or request without


 


22

















 


liability to Archipelago. Archipelago may however subsequently renew
its request that TAL proceed with the relevant project or request, in which
case the provisions of this Section shall again be applicable.


 


(d)                                 If TAL proceeds with
any project or request despite the fact that it is not under an obligation to
do so, Archipelago will not be under an obligation to reimburse TAL for any of
the related expenses subsequently incurred.


 


ARTICLE VI


 


REPRESENTATIONS AND WARRANTIES


 


6.1                                 REPRESENTATIONS AND
WARRANTIES OF ARCHIPELAGO. In addition to the other representations and
warranties of Archipelago contained elsewhere in this Agreement, Archipelago
represents and warrants to TAL that:


 


(a)                                  Archipelago has the
full power and authority to execute, deliver and perform this Agreement.


 


(b)                                 This Agreement has
been duly and validly authorized, executed and delivered by Archipelago and
constitutes a valid and binding obligation of Archipelago enforceable in
accordance with its terms.


 


(c)                                  The execution,
delivery and performance by Archipelago of this Agreement as contemplated
hereby will not (i) conflict with, or result in the breach or termination of,
or constitute a default under, any agreement of any kind or any judgment or
decree, to which Archipelago is in any way bound, except for such conflicts,
breaches or defaults as would not, in the aggregate, have a material adverse
effect on the ability of Archipelago to perform its obligations under this
Agreement or (ii) constitute a violation by Archipelago of any applicable law
or regulation of any Governmental Body, or any rule or written policy of any
industry association of competent jurisdiction, or require Archipelago to
obtain or make any consent, approval, or filing of any kind with, or
notification to, any Person or any Governmental Body, or any industry
association the sanctions of which are enforced by law.


 


(d)                                 Archipelago holds all
permits, registrations, licenses, variances, exemptions, orders and approvals
from Governmental Bodies that are material to the performance by Archipelago of
its obligations under this Agreement in the jurisdictions in which Archipelago
proposes to perform such obligations (the “Archipelago Permits”), except for
such permits, registrations, licenses, variances, exemptions, orders and
approvals that have not been received as of the Effective Date and which
Archipelago will seek within a reasonable period after the Effective Date.
Archipelago is in compliance with the terms of all Archipelago


 


23

















 


Permits it currently holds, except where any such noncompliance would
not, in the aggregate, have a material adverse effect on the ability of
Archipelago to perform its obligations under this Agreement. Archipelago is in
compliance with all federal, state, local and foreign laws, statutes,
ordinances, codes, regulations, orders, requirements, standards and procedures
of any Governmental Body which are applicable to its business, except where any
such noncompliance would not, in the aggregate, (x) have a material adverse
effect on the ability of Archipelago to perform its obligations under this
Agreement, (y) cause TAL to violate any such federal, state, local or foreign
law, statute, ordinance, code, regulation, order, requirement, standard or
procedure or (z) subject TAL to any increased cost or penalty.


 


6.2                                 REPRESENTATIONS AND
WARRANTIES OF TAL. In addition to the other representations and warranties of
TAL contained elsewhere in this Agreement, TAL represents and warrants to
Archipelago as follows:


 


(a)                                  TAL has the full
power and authority to execute, deliver and perform this Agreement.


 


(b)                                 This Agreement has been
duly and validly authorized, executed and delivered by TAL and constitutes a
valid and binding obligation of TAL enforceable in accordance with its terms.


 


(c)                                  The execution,
delivery and performance by TAL of this Agreement as contemplated hereby will
not (i) conflict with, or result in the breach or termination of, or constitute
a default under, any agreement of any kind or any judgment or decree, to which
TAL is in any way bound, except for such conflicts, breaches or defaults as
would not, in the aggregate, have a material adverse effect on the ability of
TAL to perform its obligations under this Agreement or (ii) constitute a
violation by TAL of any applicable law or regulation of any Governmental Body,
or any rule or written policy of any industry association of competent
jurisdiction, or require TAL to obtain or make any consent, approval, or filing
of any kind with, or notification to, any Person or Governmental Body, or any
industry association the sanctions of which are enforced by law.


 


ARTICLE VII


 


TERM OF AGREEMENT; TERMINATION


 


7.1                                 TERM OF AGREEMENT. The
term of this Agreement (the “Term”) will commence on the Commencement Date and
shall remain in effect until December 31, 2003. The Agreement shall renew
automatically for successive two year periods, unless terminated earlier by a
party in accordance with Section 7.2; provided, that the party electing to
terminate shall have delivered written notice to the other party specifying the
applicable


 


24

















 


date of the termination no earlier than one year and no later than 180
days prior to the date so specified.


 


7.2                                 EARLY
TERMINATION.


 


(a)                                  Either
party (in such capacity, the “Terminating Party”; the other party being
referred to as the “Other Party”) may terminate this Agreement:


 


(i)                                     if
the Other Party shall fail or be unable to perform its material obligations
under this Agreement (after observing the provisions of Section 2.2.5, if
applicable) and the resulting breach shall not have been remedied within 30
days after notice thereof to the Other Party from the Terminating Party (which
30-day period shall be extended to 120 days if and to the extent that such
breach cannot reasonably be remedied during such 30-day period, and the Other
Party demonstrates to the Terminating Party that it is diligently pursuing the
remedy of such breach throughout such 120-day period);


 


(ii)                                  if
the Other Party shall assign this Agreement or any of its rights or obligations
hereunder in violation of Section 2.3 or 5.5, as the case may be, (subject to
subsection (c)) or shall fail to comply with the provisions of Sections 2.3 or
5.5, as the case may be, in connection with any sale, transfer, lease,
assignment or other disposition referred to therein; or


 


(iii)                               (x)
if the Other Party shall generally fail to pay its debts in the ordinary course
of its business, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors or
any proceeding shall be instituted by or against the Other Party seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other similar official for
it or for any substantial part of its property, and in the case of any
proceeding instituted against the Other Party, such proceeding shall not be
stayed or dismissed within 30 days from the date of institution thereof or (y)
the Other Party shall take any corporate action to authorize any of the actions
set forth in clause (x).


 


(b)                                 Archipelago
may terminate this Agreement immediately if the representations and warranties
of TAL set forth in Section 2.1.2 or Section 2.1.3 shall fail to be true and
correct in all material respects, or TAL shall have failed to observe in all
material respects its covenants and agreements set forth in Section 2.1.2 or
Section 2.1.3,


 


25

















 


and the
resulting breach shall not have been remedied by TAL within 15 days after
notice thereof to TAL by Archipelago (which 15-day period shall be extended to
30 days if and to the extent that such breach cannot reasonably be cured within
such 15-day period, and TAL demonstrates to Archipelago that it is diligently
pursuing the remedy of such breach throughout such 30-day period).


 


(c)                                  Archipelago
may terminate this Agreement for any reason upon ninety (90) days’ prior
written notice to TAL.


 


(d)                                 TAL
may terminate this Agreement upon ninety (90) days’ prior written notice to
Archipelago after the first year of the Term of this Agreement if the average
of the monthly royalties payable to TAL pursuant to Section 4.1(a) for the
three (3) complete Calendar Months immediately preceding the date such notice
of termination is sent are less than $100,000; provided that Archipelago may
pay to TAL within thirty (30) days of the receipt of a notice of termination
from Archipelago pursuant to this subsection (d) the difference between
$100,000 and the average monthly revenues for each of such three (3) Calendar
Months whereupon such notice of termination shall be deemed to have been
withdrawn and TAL shall not have the right to terminate under this clause (d)
in respect of such three Calendar Months.


 


(e)                                  The
exercise of a termination right pursuant to this Section will not constitute an
election of remedies by the Terminating Party.


 


7.3                                 NO FURTHER
OBLIGATIONS. Except as otherwise specifically provided herein (including with
respect to any perpetual grant of rights and licenses herein, any continuing
royalty payments provided for herein and the continued furnishing of Service
after expiration of the Term), upon expiration of the Term or upon termination,
neither party shall have any further obligations under this Agreement;
provided, that termination or expiration hereof shall not affect or impair any
right or obligation of a party hereto arising prior to termination or
expiration.


 


ARTICLE VIII


 


INDEMNIFICATION AND REMEDIES


 


8.1           INDEMNIFICATION.


 


(a)                                  INDEMNIFICATION
BY TAL. TAL, at its own expense, shall indemnify and hold harmless Archipelago
and its Affiliates and their respective directors, managers, officers,
employees, members, shareholders and agents and defend any action brought
against same with respect to any claim, demand, cause of action, debt or
liability, including attorneys’ fees (collectively, “Damages”), to the extent
that it is based upon a claim that the TAL Technology or TAL Data used
hereunder infringe or violate any patents, copyrights, trade secrets, licenses
or other property rights of any third party, except to the extent that


 


26

















 


any such
infringement is due to (i) any Archipelago Materials or (ii) any modifications
by Archipelago without the assistance or involvement of TAL. In the event of
any such infringement or violation, TAL shall use its best efforts to either
(x) modify or replace infringing portions of the TAL Technology or TAL Data
with software or data of substantially similar functionality, or (y) obtain
license(s) for the infringing portions.


 


(b)                                 INDEMNIFICATION
BY ARCHIPELAGO. Archipelago, at its own expense, shall indemnify and hold
harmless TAL and its Affiliates and their respective directors, managers,
officers, employees, members, shareholders and agents and defend any action
brought against same with respect to any Damages, to the extent that it is
based upon a breach of Archipelago’s warranty set forth in Section 6.1(d)
herein.


 


(c)                                  LIMITATION.
No Person shall be entitled to indemnification hereunder for Damages to the
extent attributable to such Person’s gross negligence or willful misconduct.


 


(d)                                 NOTICE
OF ASSERTED LIABILITY. Promptly after receipt by any party (the “Indemnitee”)
of notice of any claim or the commencement of any action against it in respect
of which indemnity or reimbursement may be sought hereunder (an ‘Assertion”),
such Indemnitee shall promptly give written notice of the Assertion (the
“Claims Notice”) to any other party (or parties) obligated to provide
indemnification pursuant to this Article (the “Indemnitor”), but the failure to
so notify any Indemnitor shall not relieve any Indemnitor of any liability it
may have to the Indemnitee hereunder except to the extent such Indemnitor has
been materially prejudiced thereby. The Indemnitor shall have the right to
assume the defense of such Assertion, at its own expense, with counsel chosen
by the Indemnitor and reasonably satisfactory to the Indemnitee.
Notwithstanding that the Indemnitor may elect to assume the defense of any
Assertion, the Indemnitee shall have the right to participate in the investigation
and defense thereof, with separate counsel chosen by such Indemnitee, but in
such event the fees and expenses of such counsel shall be paid by such
Indemnitee unless (a) the Indemnitor shall have agreed to pay such fees and
expenses, (b) the Indemnitor shall have failed to assume the defense of such
Assertion with counsel reasonably satisfactory to such Indemnitee or (c) in the
reasonable judgment of such Indemnitee, based upon the written advice of its
counsel, a conflict of interest exists between the Indemnitor and such
Indemnitee with respect to such Assertion (in which case, if such Indemnitee
notifies the Indemnitor that such Indemnitee elects to employ separate counsel,
the Indemnitor shall not assume the defense of such Assertion on behalf of such
Indemnitee and shall be obligated to pay the reasonable fees and expenses of
such separate counsel). Notwithstanding anything to the contrary in this
Section, the Indemnitor shall not, without the written consent of such
Indemnitee (which consent shall not be unreasonably withheld or delayed),
settle or compromise any action in


 


27

















 


any manner
that, in the reasonable judgment of such Indemnitee or its counsel, may
adversely affect such Indemnitee; provided, however, that the Indemnitor may,
without the written consent of the Indemnitee, settle or compromise any action
or consent to the entering of any judgment which is for money damages only and
includes as an unconditional term thereof the delivery by the claimant or
plaintiff to such Indemnitee of a duly executed written release of such
Indemnitee from all liability in respect of such Assertion, which release shall
be satisfactory in form and substance to counsel to such Indemnitee.


 


8.2           LIMITATION OF LIABILITY.


 


(a)                                  Neither
Archipelago nor TAL shall be entitled to assert any claim for Damages for
breach of any warranty, representation, covenant or agreement, including,
indemnification pursuant to Section 8.1, except to the extent that the
aggregate amount of Damages relating to such claim and any other claim or
claims of Archipelago or TAL, as the case may be, for the breach of warranty,
representation, covenant or agreement exceeds $25,000 in the aggregate (in
which case Archipelago or TAL, as the case may be, shall be entitled to the
full amount of its provable Damages less the full amount of Damages, if any,
proven by the other party by way of counterclaim or setoff), provided that the
foregoing shall not limit, restrict or impair any claims by Archipelago or TAL
against the other for indemnification pursuant to Section 8.1 relating to or
arising out of any third party claim against a party hereto in respect of which
the other party hereto is obligated to provide indemnification pursuant to
Section 8.1.


 


(b)                                 In
view of the difficulty in predicting the amount of damages a party would incur
as a result of a breach by the other party of its obligations under this
Agreement, the parties agree that in the event of any such breach, the
breaching party shall not be liable to the other party pursuant to this
Agreement or otherwise for indemnification pursuant to Section 8.1 for any
amount in excess of $100,000 in the aggregate, provided that (x) the foregoing
shall not limit, restrict or impair any claim by one party against the other
for indemnification relating to or arising out of a third party claim pursuant
to Section 8.1, or violations of Section 5.3, and (y) the foregoing does not
apply to Archipelago’s royalty payment obligations in accordance with Section
4.1(a), except for other remedies set forth in this Agreement.


 


(c)                                  ARCHIPELAGO
AND TAL FURTHER AGREE THAT (i) THE PROVISIONS OF THIS ARTICLE VIII ARE THE SOLE
AND EXCLUSIVE REMEDIES AGAINST THE OTHER FOR DAMAGES RESULTING FROM OR ARISING
UNDER THIS AGREEMENT (WHETHER SOUNDING IN CONTRACT OR TORT) AND (ii) UNDER NO
CIRCUMSTANCES WILL ARCHIPELAGO OR TAL HAVE ANY OBLIGATIONS TO THE OTHER FOR ANY
(x) INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING
LOST PROFITS, WITH RESPECT TO ANY MATTER RESULTING FROM OR


 


28

















 


ARISING OUT OF
THIS AGREEMENT OR (y) ANY LIABILITY TO THE OTHER FOR ANY DAMAGE TO TANGIBLE
PROPERTY (REAL OR PERSONAL) RESULTING FROM OR ARISING OUT OF THIS AGREEMENT
REGARDLESS OF WHETHER SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES, PROVIDED THAT THE FOREGOING SHALL NOT LIMIT, RESTRICT OR IMPAIR ANY
CLAIM BY ONE PARTY AGAINST THE OTHER FOR INDEMNIFICATION RELATING TO OR ARISING
OUT OF A THIRD PARTY CLAIM PURSUANT TO SECTION 8.1.


 


8.3                                 SURVIVAL.
This Article VIII shall survive the termination of this Agreement for any
reason.


 


ARTICLE IX


 


MISCELLANEOUS


 


9.1                                 TAXES.


 


(a)                                  SALES TAXES.


 


(i)                                     Archipelago
will be responsible for paying, as and when due, any sales tax required to be
paid in connection with the distribution of the TAL Technology.


 


(ii)                                  TAL
agrees to rely upon any appropriately completed resale certificate provided by
Archipelago that relates to the transactions contemplated hereby which is
attached as Schedule D.


 


(iii)                               This
Section shall survive the termination of this Agreement for any reason.


 


(b)                                 INCOME
TAXES. TAL will be responsible for paying, as and when due, any income taxes
required to be paid in connection with the royalties payable to it under Section
4.1(a).


 


9.2                                 WAIVER OR COMPLIANCE.
Any failure of either party to comply with any obligation hereunder may be
expressly waived in writing by the other party, but such waiver or failure to
insist upon strict compliance with such obligation shall not operate as a
waiver of, or estoppel with respect to, any subsequent failure.


 


9.3                                 NOTICES. Any notice or
other communication required or permitted hereunder shall be in writing, and
shall have been sufficiently given if hand delivery, signature required, if
sent by certified or registered mail, return receipt required, if sent by
overnight delivery service, signature required, or if sent by telecopy and
promptly confirmed by dispatching the hard copy by another permitted method of
giving notice. Notice given by hand delivery, certified or registered mail or
overnight delivery service shall be effective upon receipt of


 


29

















 


signature, and notice first given by telecopy shall be effective upon
telephonic confirmation of receipt of the appropriate number of pages and
dispatch of the hard copy. Notices or other communications shall be delivered
or telecopied to the address or telecopy number set forth below (or to such
other address or telecopy number as a party by notice to the other may
provide):


 


If to Archipelago, to:


 


Archipelago
Holdings, L.L.C.


100 South
Wacker Drive, Suite 2060


Chicago, IL
60606


Fax:


Voice number
for confirmation: 312-960-1314


Attention:      Chief Executive
Officer


 


If to TAL, to:


 


Townsend Analytics
Ltd.


100 South
Wacker Drive


Suite 2040


Chicago,
Illinois 60606


Attention:              President


 


9.4                                 CONSENT TO
JURISDICTION. Each party consents specifically to the non-exclusive
jurisdiction of the federal courts of the United States sitting in the Northern
District of Illinois and the courts of the State of Illinois sitting in the
Cook County (and any court to which an appeal therefrom may be taken for
purposes of all legal proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby, and each party irrevocably waives, to
the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of venue of any such proceeding brought in such a
court has been brought in an inconvenient forum. Each party irrevocably waives
its right to a trial by jury and consents that service of process may be
effected by mail in accordance with the notice provisions contained in this
Section 9.4. This Section shall survive the termination of this Agreement for
any reason.


 


9.5                                 CAPTIONS. The Article
and Section captions in this Agreement are inserted for convenience of
reference only, do not constitute part of this Agreement and shall not be
deemed to limit or otherwise affect any of the provisions hereof.


 


9.6                                 COMPLETE AGREEMENT;
AMENDMENTS. This Agreement may not be amended, supplemented or modified except
by written agreement executed by both parties. This Agreement (including the
Exhibits and Schedules) contains, and is intended as, a complete statement of
the arrangements between the parties with respect to its subject matter and
supersedes all prior agreements between the parties with respect to those


 


30

















 


matters.


 


9.7                                 SEVERABILITY. If any
term or clause of this Agreement is held to be illegal, invalid or
unenforceable, the validity or enforceability of the remainder of this
Agreement shall not be affected thereby. If any Governmental Body construes any
term or clause of this Agreement to be unreasonable because of the duration of
such term or clause, such Governmental Body shall have the power to reduce the
duration of such term or clauses and to enforce such term or clause as so
reduced.


 


9.8                                 COUNTERPARTS. This
Agreement may be executed in any number of counterparts, each such counterpart
shall be an original instrument, and all such counterparts shall together
constitute the same agreement.


 


9.9                                 GOVERNING LAW. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Illinois without giving effect to the principles of conflicts of laws
thereof.


 


9.10                           BINDING EFFECT; NO
THIRD-PARTY BENEFICIARIES. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and permitted
assigns. Nothing in this Agreement shall create or be deemed to create any
rights in any Person other than TAL or members of Archipelago. Except as
provided elsewhere in this Agreement no party may assign any of its rights or
delegate any of its duties under this Agreement without the prior written
consent of the other (not to be unreasonably withheld or delayed).


 


9.11                           RELATIONSHIP OF THE PARTIES.
There is no joint venture, partnership, agency or fiduciary relationship
existing between the parties and the parties do not intend to create any such
relationship by this Agreement. This Section shall survive the termination of
this Agreement for any reason.


 


9.12                           NO BROKERS OR FINDERS. Each
of Archipelago and TAL represents and warrants that it has not employed or
utilized the services of any broker or finder in connection with this Agreement
or the transactions contemplated hereby.


 


9.13                           FORCE MAJEURE. Neither TAL
nor any of its Affiliates, or Archipelago shall be liable or deemed to be in
default under any provision of this Agreement for any delay or failure to
perform under this Agreement (except for obligations to make payments
hereunder) resulting directly or indirectly from any cause beyond the
reasonable control of TAL, any Affiliates of TAL, or Archipelago (as the case may
be), including, without limitation, Acts of God, war, fire, electrical failure,
explosion, earthquake, flood, elements, governmental order or regulation, acts
of public enemy, labor disputes, strikes, lockouts, supply shortages, equipment
failures, malfunctions of software provided by third parties and other failures
delays or failures caused by third parties (including third party providers of
services used in connection with the performance of this Agreement).


 


31

















 


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


 


 


	
  ARCHIPELAGO
  HOLDINGS, L.L.C.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  BY:

  	
  /S/ GERALD D. PUTNAM

  	
   

  	
   

  
	
  PRINT NAME:
  GERALD D. PUTNAM

  	
   

  
	
  PRINT TITLE:

  	
  CHIEF
  EXECUTIVE OFFICER

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  TOWNSEND
  ANALYTICS LTD.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  BY:

  	
  /S/ STUART TOWNSEND

  	
   

  	
   

  
	
  PRINT NAME:
  STUART TOWNSEND

  	
   

  
	
  PRINT TITLE:

  	
  PRESIDENT

  	
   

  
								



 


 

















 


RealNet


Townsend Analytics Subscriber Agreement


Schedule A


 


	
  NAME OF
  SUBSCRIBER:

  	
   

  	
   

  	
   

  	
  DATE OF
  AGREEMENT

  	
   

  	
   

  	
   

  
	
  INSTALLATION
  ADDRESS:

  	
   

  	
   

  	
   

  	
  PHONE #

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  FAX #

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  E-MAIL
  (REQUIRED)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


	
  BILLING
  ADDRESS:

  	
   

  	
   

  	
   

  	
  INTERNAL USE
  ONLY

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Effective
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  INTERNAL USE
  ONLY

  	
   

  	
   

  	
   

  
	
  LICENSED
  PRODUCT:

  	
  REALNET:
  ENHANCED VERSION

  	
   

  	
  Domain

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MINIMUM
  TERM:

  	
  30 Days

  	
   

  	
  Customer #:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NUMBER OF
  AUTHORIZED DISPLAY DEVICES:

  	
   

  	
   

  	
  Must provide
  existing AMEX and NYSE account

  	
   

  
	
   

  	
   

  	
   

  	
  numbers or
  complete the exchange agreements.

  	
   

  
	
  EXCHANGE
  PERMISSIONS:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Non-professional:

  	
   

  	
   

  	
  Professional:

  	
   

  	
   

  	
  AMEX ACCOUNT
  NO.:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  NYSE ACCOUNT
  NO.:

  	
   

  	
   

  	
   

  
												



 


NYSE - New
York Stock Exchange, bid/ask, Last Sale


AMEX -
American Stock Exchange, bid/ask, Last sale


AMEX -
American Stock Exchange, ticker (extra exchange fee applies)


NASDAQ -
NASDAQ Stock Market, bid/ask Level 1/Last Sale


NASDAQ - NASDAQ
Stock Market, bid/ask/Level 1/Last Sale/Level 2


OPRA - Options
Price Reporting Authority


CME - Chicago
Mercantile Exchange


CME Chicago
Mercantile Exchange - Currency futures only


CBOT Chicago
Board of Trade


 


PROFESSIONAL SUBSCRIBERS WILL
BE BILLED FOR THE EXCHANGE FEES DIRECTLY BY THE NEW YORK STOCK EXCHANGE AND THE
AMERICAN STOCK EXCHANGE. EXCHANGE FEES FOR NASDAQ AND OTHER EXCHANGES WILL BE
COLLECTED FROM SUBSCRIBER BY TOWNSEND ANALYTICS FOR PAYMENT TO THOSE EXCHANGES.


 


SUBSCRIBER MUST CERTIFY THAT IT
IS EITHER A PROFESSIONAL OR NON-PROFESSIONAL USING THE FOLLOWING GUIDELINES SET
FORTH BY THE NEW YORK STOCK EXCHANGE, THE AMERICAN STOCK EXCHANGE, NASDAQ AND
OPRA: “NON-PROFESSIONAL MEANS A NATURAL PERSON WHO IS NEITHER: A) REGISTERED OR
QUALIFIED WITH THE SECURITIES AND EXCHANGE COMMISSION, THE COMMODITIES FUTURES
TRADING COMMISSION, ANY STATE SECURITIES AGENCY, ANY SECURITIES EXCHANGE OR
ASSOCIATION, OR ANY COMMODITIES OR FUTURES CONTRACT MARKET OR ASSOCIATION: B)
ENGAGED AS AN “INVESTMENT ADVISOR” AS THAT TERM IS DEFINED IN SECTION 201(11)


 

















 


OF THE INVESTMENT ADVISOR ACT
OF 1940 (WHETHER OR NOT REGISTERED OR QUALIFIED UNDER THAT ACT); NOR: C)
EMPLOYED BY A BANK OR OTHER ORGANIZATION EXEMPT FROM REGISTRATION UNDER FEDERAL
AND/OR STATE SECURITIES LAWS TO PERFORM FUNCTIONS THAT WOULD REQUIRE HIM/HER TO
BE SO REGISTERED OR QUALIFIED, IF HE/SHE WERE TO PERFORM SUCH FUNCTIONS FOR AN
ORGANIZATION NOT SO EXEMPT.”


 


NON-PROFESSIONAL:               


 


 


SUBSCRIBER HEREBY APPLIES, IN
HIS/HER INDIVIDUAL AND PERSONAL CAPACITY, AND NEITHER AS A PRINCIPAL, OFFICER,
PARTNER, EMPLOYEE OR AGENT OF ANY BUSINESS NOR ON BEHALF OF ANY OTHER
INDIVIDUAL, TO BE CLASSIFIED AS A NON-PROFESSIONAL.


 


PROFESSIONAL:               


 


 


SUBSCRIBER HEREBY DECLARES THAT
IT IS CONSIDERED A PROFESSIONAL GIVEN THE ABOVE MENTIONED GUIDELINES, OR IT IS
A COMPANY USING DATA TO GAIN ANY INFORMATION OTHER THAN THE PRICE OF ITS OWN
COMPANY. IF A SUBSCRIBER IS A PROFESSIONAL AND WOULD LIKE TO USE THE
INFORMATION FOR ITS OWN INVESTMENT PURPOSES, THE SUBSCRIBER IS STILL CONSIDERED
A PROFESSIONAL.


 


SUBSCRIBER ACKNOWLEDGES AND
AGREES THAT IF ITS STATUS WITH RESPECT TO ANY OF THE FOREGOING STATEMENTS IS
AFFECTED OR CHANGED IN ANY WAY, SUBSCRIBER SHALL IMMEDIATELY NOTIFY TOWNSEND
ANALYTICS, LTD. IN WRITING OF SUCH CHANGE IN STATUS OR POSITION. IN ADDITION TO
OTHER REMEDIES AVAILABLE TO TOWNSEND ANALYTICS, LTD. AND THE EXCHANGES,
SUBSCRIBER SHALL BE LIABLE TO TOWNSEND ANALYTICS, LTD. AND THE EXCHANGES FOR
THE DIFFERENCE BETWEEN ANY FEES AND COSTS ACTUALLY PAID BY SUBSCRIBER AND THE
FEES AND COSTS APPLICABLE TO PROFESSIONAL SUBSCRIBERS FOR THE SAME TYPE OF
INFORMATION THE SUBSCRIBER IMPROPERLY RECEIVED AS A NON-PROFESSIONAL.


 


SUBSCRIBER HAS MADE
ARRANGEMENTS WITH ARCHIPELAGO, L.L.C. FOR RECEIPT OF THE SERVICES. TOWNSEND
ANALYTICS, LTD. WILL NOT BILL SUBSCRIBER FOR THE SERVICES BUT WILL RECEIVE
PAYMENT SOLELY FROM ARCHIPELAGO. SUBSCRIBER, AS A CONDITION OF RECEIPT OF THE
SERVICE, AGREES TO ABIDE BY THE TERMS AND CONDITIONS OF THE AGREEMENT
(EXCEPTING THOSE RELATED TO PAYMENT.)


 


 


	
  ACCEPTED BY
  SUBSCRIBER

  	
  ACCEPTED BY
  TOWNSEND ANALYTICS, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  	
  SIGNATURE:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Print Name
  and Title:

  	
   

  	
   

  	
  PRINT NAME
  AND TITLE:

  	
   

  	
   

  
	
   

  
	
  ACCEPTED BY
  ARCHIPELAGO, L.LC.

  
	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  
	
  Print Name
  and Title:

  	
   

  	
   

  
											



 


 

















 


CONFIDENTIAL


 


SCHEDULE A


REALNET SUBSCRIBER AGREEMENT


 


SUBSCRIBER
NAME:                                           


 


The subscriber set forth above
(“Subscriber”) hereby subscribes to the services provided by Townsend
Analytics, Ltd. (“TAL”), known as “Services” and comprised of the information
and software components selected by Subscriber as set forth in Schedule A
hereto (any and all such components collectively referred to herein as “the
Services”; any and all information collectively referred to herein as “Information”;
any and all Information provided by various stock exchanges, commodity
exchanges, and other sources collectively referred to as “Sources”; and any and
all software components collectively referred to herein as “the Licensed
Product”. Subscriber shall give prompt written notice of any change of the
name, nature, or place of Subscriber’s business to TAL. Subscriber and TAL
hereby mutually agree as follows:


 


TERM. The term
of this Agreement shall be for a Minimum Term as described in Schedule A below
commencing on the Effective Date. The Effective Date shall be defined as the
date upon which the Licensed Product is authorized by TAL to access the data
feed. This Agreement shall automatically renew at the end of each period for
another Minimum Term, unless it is either terminated effective at the end of
any term with written notice by either party given to the other party at least
thirty (30) days prior to the end of the then-current term or terminated
pursuant to Paragraphs 12 or 15 of this Agreement.


 


LIMITED
PERMISSION TO USE SERVICES. The Services are to be received by Subscriber
solely for its internal use on the number of Authorized Display Device(s)
initially as set forth in Schedule A and as may be subsequently increased or
decreased from time to time by written notice to TAL and at the Installation
Address designated in Schedule A. Subscriber’s “internal use” shall be deemed
to also include use by third parties with whom the Subscriber shares but to
whom Subscriber does not sell or beneficially provide the Licensed Product or
Information, provided that usage by such third parties constitutes an integral
and inseparable part of the Subscriber’s business. Subscriber will adopt and
enforce all measures which TAL reasonably requires in order to prevent data,
Information, or the Licensed Product from the Services from being redistributed
or relocated from its authorized place of business. Subscriber further agrees
that it will comply with any and all reasonable restrictions concerning the
location of the Licensed Product in its place of business.


 


REQUIRED
APPROVAL FROM SOURCES. Subscriber shall, prior to commencing any use of the
Information, submit application to and receive written approval


 

















 


from each and
every Source. Subscriber agrees to comply with any conditions, restrictions or
limitations imposed by any of the Sources, including paying all such fees or
charges as such Sources may impose either directly or through TAL. Failure of
Subscriber to comply with the provisions of this Paragraph shall constitute a
material breach of this Agreement.


 


TERMINATION BY
SOURCES. Subscriber acknowledges that the Sources described in Paragraph 3 may
have the right to terminate provision of the Information to Subscriber with or
without notice and that neither any such Source nor TAL shall have any
liability in connection therewith.


 


INDEMNIFICATION.
Subscriber agrees to indemnify and hold TAL and any third party providers
harmless from any and all losses, damages, liabilities, costs, charges, and
expenses, including reasonable attorneys’ fees and such fees and/or penalties
as any exchanges or third party providers may impose, arising out of any breach
or alleged breach by Subscriber of its obligations under this Agreement or any
failure to comply with the requirements of or obligations imposed by any such
exchange or third party provider. Subscriber agrees that TAL, any third party
provider or Sources shall not have any liability for the accuracy or
completeness of the Information or for delays, interruptions, or omissions
therein. This Paragraph shall survive any termination of this Agreement.  


 


(A) LIMITED
PERMISSION TO COPY LICENSED PRODUCT AND INFORMATION. Subscriber expressly
acknowledges that the Services, including the Licensed Product and Information,
is developed and prepared by TAL and third party providers through the
application of methods and standards of judgment developed and applied through
the expenditure of substantial time, effort, and money. Subscriber acknowledges
that the Services, including the Licensed Product and Information contain trade
secrets of TAL and third party providers, are protected by copyright law and
constitute valuable property of TAL’s and third party providers’. Subscriber
agrees that unauthorized copies or disclosure of the Licensed Product or
Information will cause great damage to TAL and third party providers, which
damage far exceeds the value of the copies or information involved.


 


(B) Subscriber
shall not use, copy, modify, or transfer the Licensed Product, in whole or in
part, except as expressly provided for herein. Subscriber may make one copy of
the Licensed Product for archive or emergency backup purposes, provided that
such copy shall be subject to this Agreement (except for fees) and shall bear
the appropriate trademarks, copyright notices and other proprietary notices
contained in versions of the Licensed Product provided by TAL under this
Agreement. Subscriber agrees that it shall not allow the Licensed Product to be
reverse engineered, decompiled, disassembled, or modified.


 


INSPECTION OF
USE OF SOFTWARE, AND INFORMATION. At all times, upon twenty-four (24) hours
notice to Subscriber, any person or persons designated by TAL will have full
and free access to the place of business designated in Schedule A to observe
the use of the Services and Licensed Product and to inspect, maintain, and/or
remove the Licensed Product.


 


PAYMENTS.
Unless otherwise provided in Schedule A, Subscriber agrees to pay TAL in
advance on the first day of each month the applicable monthly fees for the
Services and other fees and charges as set forth in Schedule A (including any
software license, maintenance, and installation fees) plus any applicable
federal, state, or local sales, use, property, or other


 

















 


taxes, duties,
or assessments imposed on transactions hereunder. It is understood that such
monthly fees will include exchange fees and third party data and software
license fees as billed by TAL or as may be billed to Subscriber directly by the
exchanges or such other providers. The charges set forth in Schedule A shall
remain unchanged during the initial Minimum Term. However, upon written notice
to Subscriber at least thirty (30) days prior to the end of each Term,
including the initial Term, TAL may change any and all charges for succeeding
terms. All exchange fees and third party provider fees are subject to change at
any time.


 


COMPLIANCE
WITH LAWS. The furnishing of the Services is conditioned upon Subscriber’s
strict compliance with the provisions of this Agreement and with all federal,
state, local, and exchange rules, regulations, and contract terms, which may
pertain to the use of the Services. Notwithstanding any other term of this
Agreement, it is understood and agreed by Subscriber that TAL may discontinue
the Service or any portions thereof, without notice or liability, whenever the
exchanges or other third party providers require such discontinuance. In
addition, TAL shall not be liable for any actions taken by any communication
service providers who may affect the Services, including, without limitation,
actions which result in the termination or interruption of the Services.


 


DISCLAIMER.
TAL expressly disclaims all warranties, express or implied with respect to the
Services, including, but not limited to Information and Licensed Product, and
their quality of performance including warranties of merchantability and
fitness for a particular purpose. TAL makes no representation concerning the
likelihood of profitable trading using the Services. The Licensed Product is
licensed “as is” and “with all faults.” The sales personnel, employees, and
dealers of TAL are not authorized to make warranties binding on TAL about the
Services. Accordingly, additional oral statements do not constitute warranties
and should not be relied upon and are not part of this Agreement. Neither TAL
nor any of its affiliates, the exchanges, or third party providers, warrant
that the Services will be uninterrupted or error-free. Subscriber expressly
agrees that use of the Services is at Subscriber’s sole risk. 


 


LIMITS OF
LIABILITY. TAL and its affiliates, and the exchanges and third party providers
will in no way be liable for any money damages resulting from claims made by
Subscriber or third party(s) for errors, omissions, or delays regardless of
cause, in the Services or in any of the data and information and software
contained therein, or caused by any TAL or third party software used in
connection therewith, or for any damages (whether direct or indirect, or
consequential, punitive, special or exemplary, including, but not limited to,
loss of profits) resulting therefrom, regardless of cause. Should this
limitation be held invalid, liability of TAL and its affiliates and third party
providers, shall in the aggregate in no event exceed $100.


 


CHANGE OF
COMMUNICATIONS CARRIERS. Notwithstanding any other term of this Agreement, TAL
may, in its sole discretion and at any time, change the communications carriers
used by TAL. If communications carrier charges incurred by TAL are increased by
the carriers, TAL may, on written notice to Subscriber, immediately increase
the monthly fees charged to Subscriber to reflect such increase. In the event
of such an increase, Subscriber shall have the right to terminate this
Agreement without penalty provided that Subscriber gives written notice of
termination to TAL within thirty


 

















 


(30) days of
receipt of notice from TAL.


 


FAILURE TO PAY
FEES. Failure by Subscriber to pay any monthly fees or other fees or charges in
connection with the Services within thirty (30) days of the due date shall
constitute a material breach of this Agreement. TAL reserves the right, in
addition to other remedies, to suspend access to the service. TAL may assess a
late charge at a rate of 2.0% per month from the due date on all unpaid
balances.


 


USE OF
SOFTWARE AND INFORMATION. Subscriber shall have no right in or to any software,
or information, except the right to use the same in the course of Subscriber’s
business consistent with the provisions herein. Subscriber shall not assign,
pledge, or encumber the Licensed Product and Subscriber shall keep the Licensed
Product free and clear of all liens, levies, and encumbrances. Failure to do so
shall constitute a material breach of this Agreement. Subscriber will promptly
return to TAL or its contractors or agents the Licensed Product when the
Services are terminated.


 


TERMINATION.
Should Subscriber file a petition in bankruptcy or be adjudicated bankrupt, or
if a petition in bankruptcy is filed against Subscriber, or if Subscriber makes
an assignment for the benefit of its creditors or an arrangement pursuant to
any bankruptcy act or takes advantage of the insolvency laws of any State, or
if Subscriber discontinues all of its business, the Services may be immediately
terminated by TAL without notice. TAL may terminate the Services, upon written
notice to Subscriber, if in TAL’s reasonable judgment, Subscriber is in
material breach of any of its obligations under this Agreement. Termination of
this Agreement under the provisions of this Paragraph shall be without
prejudice to any other remedy which TAL may have against Subscriber. Upon
termination of this Agreement, all fees and charges incurred to such date shall
become immediately due and payable. In addition to and notwithstanding the
above, if Subscriber or any of its employees, agents, or representatives shall
attempt to use or dispose of the Services in a manner contrary to the terms of
this Agreement, TAL shall have the right, in addition to such other remedies as
may be available to it, to injunctive relief enjoining such acts or attempts,
it being acknowledged that legal remedies are inadequate.


 


NO UNLAWFUL
USE OF SERVICES. Subscriber agrees that it will not engage in, and represents
that it is not currently engaged in, the operation of any unlawful transactions
or business and Subscriber agrees that it will not use or permit anyone to use
the Services for any unlawful purpose.


 


RELATIONSHIP
BETWEEN PARTIES. The relationship between Subscriber and TAL is that of
independent contractors and nothing contained in this Agreement shall be
construed to constitute the parties as partners, joint ventures, or agents of
one another. This Agreement shall not be assigned or otherwise transferred by
Subscriber without the prior written consent of TAL.  


 


GENERAL. Subscriber
represents that the signatory below is authorized to act in behalf of the named
Subscriber. This Agreement constitutes the entire agreement between the parties
and supersedes any prior agreements between the parties with respect to its
subject matter, and nothing stated heretofore or hereafter will be considered
part of this Agreement without a mutually agreeable amendment executed by an
authorized representative of


 

















 


the parties.
None of the provisions of this Agreement shall be deemed to be waived or
modified, other than as expressly stated in writing signed by both parties. The
failure of either of the parties hereto to enforce, or the delay by either
party in enforcing, any of its rights under this Agreement shall not be deemed
to be a waiver or modification by the parties of any of their rights under this
Agreement. Any notices required to be sent hereunder shall be sent by mail to
the respective address set forth below, unless either party notifies the other
of a change in such address.


 


GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Illinois, without
regard to the choice of law provisions thereof, and Subscriber agrees that any
action arising out of this Agreement or the breach thereof shall be resolved in
Illinois and Subscriber hereby agrees to submit to the exclusive jurisdiction
of the Illinois courts for the resolution of any such dispute.


 


PAYMENT OF
COSTS AND FEES. In the event any legal action is taken by TAL with respect to
the Service, Subscriber, agrees to pay all court costs, including disbursements
and reasonable attorneys’ fees.


 


FORCE MAJEURE.
Neither party shall have any liability for any default resulting from force
majeure, which shall be deemed to include any circumstances beyond its control.
Such circumstances shall include, but are not limited to: acts of the
government, fires, floods, strikes, civil disturbances or terrorism, or power,
communications line, satellite or network failures.


 


	
   

  	
  AGREED TO:

  	
   

  	
   

  	
  SERVICE
  ACCEPTED BY:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Authorized Signature of
  Subscriber)

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  TOWNSEND
  ANALYTICS, LTD.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Name and Title - Please
  Print)

  	
   

  	
   

  	
  100 S.
  Wacker Drive Suite 2040, Chicago, IL 60606

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Date)

  	
   

  	
   

  	
  (Date)

  	
   

  



 

















 


SCHEDULE B


 


North America


 


SCHEDULE C


 


	
  ITEM

  	
   

  	
  LIST PRICE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Basic Package

  	
   

  	
  $

  	
  250.00

  	
   

  
	
  (Features as described in Schedule A)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Option Analytics

  	
   

  	
  $

  	
  25.00

  	
   

  
	
  Excel (DDE) Interface

  	
   

  	
  $

  	
  25.00

  	
   

  



 


 


SCHEDULE D


 


RealTick is a 32-bit Windows
program that displays real-time and historical market prices in quote screens,
charts and tables. Multiple windows can be created on various user-configurable
pages. For purposes of this Agreement, RealTick is defined as the following
permissioned features:


 


Basic Package


•                                          Multi-Quote


•                                          Ticker


•                                          MarketMinder


•                                          Regional
Display


•                                          MarketMakers
(NASDAQ Level II)


•                                          Charts
with Studies


•                                          Time
& Sales and other tables


•                                          Fixed
Page News


•                                          News
Alerts


•                                          Stocks
Display


•                                          TurboOptions
without Options Analytics


•                                          Web
Browser


•                                          Alarms


•                                          News


 


RealTrade
features


•                                          Order
Entry


•                                          Trade
management


•                                          Baskets


•                                          Reserve
Orders


•                                          Position
Management


 


Optional
Add-On Services


•                                          Option
Analytics


•                                          Excel
(DDE) Interface


•                                          Both
parties acknowledge that RealTick may, by mutual consent, also include other
features not covered by this definition.