Exhibit 10.24


 


ELECTRONIC
TRADE EXECUTION AGREEMENT


 


THIS
AGREEMENT, made this 12th day
of November, 1999, is by and between J.P. MORGAN SECURITIES INC. (“JPMSI”), a
New York corporation, having its principal place of business at 60 Wall Street,
New York, NY 10260, and Archipelago L.L.C. (“ARCA”), an Illinois limited
liability company, having its principal
place of business at 100 South Wacker Drive, Suite 2012, Chicago, IL 60606.


 


WHEREAS JPMSI
owns and operates an electronic order entry and transaction execution system,
among other things, for the purpose of receiving, transmitting and confirming
execution of ARCA orders and transactions in exchange-listed securities (the
“System”); and


 


WHEREAS ARCA
desires to transmit and JPMSI desires to receive orders for the execution of
transactions in exchange-listed securities through the System, subject to and
upon the terms and conditions set forth herein;


 


NOW THEREFORE,
in consideration of the premises, the mutual covenants herein, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties, subject to the terms and conditions set forth below,
hereby agree as follows:


 


1.                                           System.


 


1.1                                 Except
those constituent parts of the System that are comprised of the Financial
Information eXchange (“FIX”) or the SuperDot system of the New York Stock
Exchange, Inc. (“DOT”), and except as otherwise expressly provided herein, all
documentation pertaining to the use and operation of the System, all programs
relating to the System, and all up-dates, replacements, revisions,
enhancements, additions, conversions, adaptations and modifications of the
System, the operating guidelines, specifications and other documentation (the
“User Documentation”), and the rights to any patents, copyright, trade or
service mark, or trade secrets, in relation to the System, are and shall remain
the sole property of JPMSI.


 


1.2                                 ARCA
shall have no right or authority to sub-license, sell, transfer, publish,
disclose, display, or otherwise use or make available the System, or any JPMSI
property, except as may be provided herein.


 


1.3                                 ARCA
shall not, without JPMSI’s prior written consent, copy, modify, adapt
translate, decompile, reverse engineer, or otherwise reduce to a human readable
form the System, or any part of it, in any way, nor use it to create any
derivative system or work.


 


1 .4                              Any
updates, replacements, revisions, enhancements, additions, conversions,
adaptations, and modifications to the System shall be subject to the terms and
conditions of this Agreement.


 

















 


1.5                                 JPMSI
may update, replace, revise, enhance, add to, convert, adapt modify the System,
or any part of the System, at any time without prior notice and may do so
without any liability of any kind for any resulting cost, loss or expense
incurred by ARCA. JPMSI will provide ARCA ten (10) days advance written notice
of any up-date, replacement, revision, enhancement, addition, conversion,
adaptation, or modification that is expected to impair or interrupt the
execution of ARCA’s orders.


 


2.                                       Equipment


 


2.1                             ARCA shall obtain, and
shall be responsible for the expense, installation and maintenance,
independently of JPMSI, of all necessary equipment for the use by it of the
System. Such equipment shall be compatible with and not interfere with or cause
technical problems in relation to the System and shall comply with and meet the
specifications, performance standards and requirements of FIX and those
provided by JPMSI to ARCA, as each may be amended from time to time.


 


2.2                             JPMST makes no representation
or warranty regarding the compatibility of any ARCA equipment proposed to be
used or used in connection with the transmission of orders, the receipt of
reports, or otherwise in connection with the System.


 


2.3                             ARCA shall be liable to
JPMSI for any and all loss or damage arising, directly or indirectly, in
connection with the use by ARCA of any equipment or which is caused, directly
or indirectly, by ARCA or ARCA’s equipment to the System or to JPMSI or any
JPMSI equipment.


 


3.                                       Account
Opening and Payment of  Charges.


 


3.1                                 Execution
of this Agreement shall authorize JPMSI to open one or more accounts in ARCA’s
name for the execution of orders transmitted through the System.


 


3.2                                 ARCA
agrees to provide any and all information required by JPMSJ for the opening of
an account and acknowledges that it will not be permitted access to the System
until JPMSI has received such information in a form satisfactory to it and
assigned an account number to ARCA.


 


3.3                                 ARCA
agrees to make timely payment for transaction and other charges hereunder and
to deliver securities in timely fashion.


 


3.4                                 ARCA
shall pay to JPMSI a commission equal to [***]% of the gross revenue due to
ARCA for each transaction, less any applicable clearing and settlement charges
paid by ARCA with respect to such transactions. This commission rate shall be
subject to re-negotiation at any time. Such commissions shall be remitted by
ARCA within seven (7) days of receipt of a monthly invoice from JPMSI.  JPMSI separately shall pay the cost of 


 












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


 

















 


any specialist
or execution fees incurred in connection with such transactions.


 


4.                                       Transmission
and Acceptance of Orders.


 


4.1                                 ARCA agrees to
transmit orders and to utilize the System solely in accordance with the
procedures set out in the FIX Protocol, Version 4.0 and the User Documentation,
as each may be amended from time to time, and solely in conformity with
applicable law and regulation including, without limitation, the rules and
regulations of the New York Stock Exchange (“NYSE’) and the American Stock
Exchange (“AMEX”).


 


4.2                                 ARCA
shall be solely responsible for errors and shall notify JPMSI promptly of any
errors of which it becomes aware, relating to order entry, transmission,
execution or reporting.


 


4.3                                 JPMSI
shall not be responsible for any order prior to the time of acceptance of such
order.


 


5.                                       Confirmations,
Transaction Reports and Statements.


 


All transactions executed through the System
shall be confirmed by ARCA’s clearing broker in hard copy format pursuant to
Rule 10b-10 under the Securities Exchange Act of 1934, as amended and, in addition,
by JIPMSI by the transmission through the System of a courtesy electronic trade
confirmation message to ARCA no later than the end of the business day
following the day of execution of the transaction. Such confirmations, and any
statements of account, shall be deemed accurate, conclusive and binding if ARCA
does not object in writing to such clearing broker within two (2) business days
or within ten (10) business days, respectively, after delivery to ARCA of said
confirmation or statement of account.


 


6.                                       Order
Execution.


 


6. 1                              ARCA
orders accepted for execution by JPMSI shall be executed as agent on ARCA’s
behalf


 


6.2                                 JPMSI
reserves the right to decline any ARCA order at any time in its sole discretion


 


7.                                       “Long”
and “Short” Sales.


 


7. 1                          ARCA shall designate all sale
orders entered into the System “long” or “short”, as appropriate. Designation
of a sale as “short” shall constitute ARCA’s representation that JPMSI will
receive delivery of the security from ARCA,
by the applicable settlement date.


 


7.2                             Designation by ARCA of a
sale order as “long” shall constitute a representation by ARCA that (i) ARCA
owns the subject security and, (ii) if the subject security 


 

















 


is not in
JPMSI’s possession at the time of sale, ARCA shall deliver the security in good
deliverable form within three (3) business days following execution of the sale
transaction or, alternatively, the security is on deposit in good deliverable
form with a member of the NASD or a national securities exchange, a
broker-dealer registered with the SEC, or with an organization subject to state
or federal banking regulation, to whom, in each instance, instructions have
been given by ARCA to deliver the subject security to JPMSI (or its appointed
agent) against payment.


 


8.                                       Execution
Prices.


 


The price at
which a transaction is executed shall be binding upon the parties
notwithstanding an erroneous transaction report relating thereto. A transaction
report shall not be binding in the event that an order or transaction has not,
in fact, been executed. A transaction in fact executed shall be binding despite
any transaction report indicating, erroneously, that a transaction has not been
executed.


 


9.                                       Impact
of Trading Halts.


 


ARCA
acknowledges and agrees that JPMSI may cancel (i) any order placed or (ii) any
transaction executed in error, while there is in effect, for any reason, a
trading halt relating to the security which is the subject of the order or
transaction.


 


10.                                 Clearance
and Settlement.


 


10.1                       JPMSI shall submit to ARCA, or
such clearing agent or carrying firm as ARCA may designate for the purpose, all
transactions for clearance and settlement in accordance with the clearance and
settlement arrangements separately agreed by and between JPMSI and ARCA.


 


10.2                       JPMSI shall have no liability
for the acts or omissions of any third party, including, without limitation,
any clearing agent or carrying firm of ARCA or JPMSI.


 


10.3                           Any and
all clearing and settlement costs incurred with respect to transactions
executed through the System shall be borne by ARCA. JPMSI shall bear the costs
of any specialists’ charges and exchange fees.


 


11.                                 Restriction
on Account.


 


JPMSI may in its sole discretion terminate or
limit transactions in ARCA’s account, decline to accept orders for ARCA’s
account and/or require ARCA to reduce the size or number of transactions in its
account.


 


12.                                 ARCA
Obligations.


 


12.1  ARCA shall not enter any orders into the
System until after it has furnished 


 

















 


JPMSI, in writing, the names of all those
persons at ARCA authorized to access and use the System.


 


12.2                           ARCA
shall be solely responsible for the security and confidentiality of the user
and password codes designated for its utilization of the System.


 


12.3                           ARCA
shall he, and hereby acknowledges that it is, solely responsible for all ARCA
orders and transactions including, without limitation, those entered into the
System by unauthorized persons; those which exceed transaction limit or other
restrictions set by JPMSI, or by ARCA’s clearing agent or carrying firm, if
any; those which ARCA’s clearing agent or carrying firm refuses for any reason
to accept for clearance and settlement; and those which violate or allegedly
violate any federal or state laws, or rules or regulations promulgated by the
SEC, the NASD, or any national securities exchange or association.


 


12.4                           ARCA
shall establish, implement, enforce, and ensure the proper supervision of
written procedures sufficient to ensure that all orders comply in all respects
with all transaction limits or other restrictions established or imposed by
JPMSI or ARCA’s clearing agent or carrying firm, including, though not limited
to, limitations or restrictions as to the type and quantity of securities that
ARCA may buy or sell, and the frequency with which ARCA may place orders.


 


12.5                           ARCA shall establish,
implement, enforce and ensure the proper supervision of written procedures
sufficient to ensure that all orders and transactions comply in all respects
with the laws, rules and regulations to which ARCA and its orders and
transactions are subject, including though not limited to the rules,
regulations, customs and usages of the Exchanges and markets on which ARCA’s
orders are executed.


 


12.6                           ARCA’s
written procedures shall include, among other things, procedures governing
authorized access, validation of order and transaction accuracy, conformity of
orders with established credit and order size limits, and independent
verification of the accuracy of orders re-transmitted to JPMSI following manual
conversion by ARCA personnel.


 


13.                                 ARCA
Representations and Warranties.


 


ARCA represents and warrants that:


 


13.1                           it is,
and will remain for the duration of this Agreement, a registered broker-dealer
and a member in good standing of the National Association of Securities
Dealers, Inc.


 


13.2                           it is a
knowledgeable, experienced, sophisticated equities market participant familiar
and at all times in compliance with all applicable laws, rules or regulations
governing its activities;


 


13.3                           it
shall make its own independent trading and order routing decisions 


 

















 


without reliance upon advice from JPMSI;


 


13.4                           all
orders shall be for ARCA’s account, or, if for the benefit of any third party,
that ARCA has all necessary authority to act on behalf of such third party and
shall specify that such orders for third parties are entered by ARCA as
broker-dealer agent for such third parties,


 


13.5                           all
orders shall conform to the size, monetary and other transactional limitations
and restrictions set by JPMS1, by ARCA’s clearing agent or carrying firm or by
the NYSE, AMEX or other exchange, as appropriate;


 


13.6                           it is
an organization duly organized, validly existing and in good standing under the
laws of its jurisdiction and has full power and authority to enter into and
perform this Agreement;


 


13.7                           the
execution, delivery and performance of this Agreement has been duly authorized
by all necessary action and this Agreement constitutes the valid and binding
obligation of ARCA enforceable against it in accordance with its terms;


 


13.8                           it is
not under any legal disability which would prevent it from entering into or
performing this Agreement;


 


13.9                           it has
established and will maintain during the term of this Agreement the clearance
and settlement arrangements referred to in Paragraph 10 above, and the written
procedures referred to in Paragraph 12.4 and 12.5 above, and that it will
furnish copies of such agreements and procedures to JPMSI within five (5)  business
days of any request by JPMSI;


 


13.10                     all orders,
communications, transactions and other uses of the System shall be in
accordance with and subject to the procedures set out in FIX Protocol, Version
4.0 and in the User Documentation, as each may be amended from time to time;


 


13.11                     it has
received and understands all of the documentation, programs, and other
information pertaining to the use and operation of the System.


 


14.                                 JPMSI
Representations and Warranties.


 


14.1                           Except
as may be expressly provided herein, JPMSI makes no representation or warranty,
and the System is made available to ARCA without any express implied warranty,
of any kind including, without limitation, warranties of merchantability and
fitness for a particular purpose and non-infringement of patents, copyrights,
trade or service marks or other proprietary rights of third parties and all
such warranties are hereby disclaimed.


 


14.2                           JPMSI
makes no representation or warranty that the System, any part of the System,
updates to or operation of the System will be uninterrupted or error-free.


 

















 


14.3                           JPMSI
makes no representation or warranty regarding the speed of transmission or
priority of any order or execution transmitted through the System.


 


14.4                           JPMSI
makes no representation or warranty that the System will meet ARCA’s desired
results or that any defects in the System can or will he corrected.


 


15.                                 Limitation
of Liability.


 


15.1                           JPMSI
shall not be responsible or liable to ARCA, or to any party upon whose behalf
ARCA acts, for any loss or damage of any kind including, without limitation,
lost profits, lost savings, or other direct or indirect special, incidental or
consequential loss, damage or expense, caused by. or arising in connection
with, any delay or failure to perform hereunder, including, but not limited to,
loss, damage or expense arising, directly or indirectly, in connection with any
acts or God, of the public enemy, fires, floods, power failures, war, strike,
national disaster, government restriction, exchange ruling, suspension of
trading or other market disruption, delays, errors, inaccuracies, or omissions
in the transmission of orders or other operation of the System due to
breakdown, malfunction or other failure of transmission, execution or
communication facilities, or otherwise.


 


15.2                           ARCA
agrees that JPMSI shall not be liable to ARCA, or to any party upon whose
behalf ARCA acts, for damages or loss of any kind, including, without
limitation, lost profits, lost savings, or other direct, indirect or
consequential damage or loss arising, directly or indirectly, in connection
with any program, materials, documentation or service made available hereunder,
or the use or inability to use the program, materials, documentation or
services, or any modification thereof


 


15.3                       ARCA acknowledges and agrees
that market information, price quotations and transaction reports may be
inaccurate or incomplete and are subject to error, delay or change. Reliance
upon such information, quotations and reports shall be at ARCA’s own risk.


 


15.4                       ARCA
acknowledges and agrees that no liability shall arise by reason of any
technical inaccuracy or typographical error contained in the FIX Protocol,
Version 4.0 or in the User Documentation, as each may be amended from time to
time.


 


15.5                       ARCA acknowledges and agrees
that the limits on liability set out herein are intended to and shall apply to
any failure of the System to cause any order to be transmitted or executed
either properly or promptly or at all.


 


15.6                       The above-mentioned warranties
and the commitments of JPMSI set forth herein are in lieu of all other
obligations and liabilities on the part of JPMSI including, without limitation,
special, indirect or consequential damages that in any way arise from or in
connection with the use and/or performance or operation of the System.


 

















 


16.                                 Indemnification.


 


ARCA hereby
agrees to indemnify and hold harmless JPMSI, its affiliates, directors,
officers, employees and agents from and against any claim, demand, cause of
action, cost, loss, damage, expense (including reasonable attorney’s fees) or
liability arising from or in connection with any claim by ARCA, or by any third
party, to the extent that such claim arises out of or is in connection with the
use and/or operation of the System, or a breach by ARCA or JPMSI of this
Agreement, except that ARCA does not agree to indemnify and hold harmless JPMSI
to the extent that such claim arises from a deliberate or intentional wrongful
act by JMPSI, its affiliates, directors, officers, employees, and agents.


 


17.                                 Confidentiality.


 


17.1                           ARCA
acknowledges that the System and User Documentation represent and contain
confidential, proprietary information of JPMSI and ARCA agrees, both during the
term hereof and subsequent thereto, to preserve and maintain the
confidentiality of such information, not to use any of it except for the
purposes contemplated hereby, and to prevent disclosure of any of the
information to any third party.


 


17.2                           ARCA
acknowledges and agrees that JPMSI will suffer irreparable injury not
compensable by money damages and for which JPMSI will not have adequate remedy
at law in the event of breach by ARCA of these provisions and ARCA therefore
agrees that JPMSI shall be entitled to injunctive relief to prevent or restrain
any such breach, whether such breach he threatened or actual. The foregoing
shall be in addition and without prejudice to or limitation upon any other rights
JPMSI may have under the Agreement, at law or in equity.


 


18.                                 Term of Agreement.


 


The term of this Agreement shall commence on
the date first appearing above and may be terminated by either party pursuant
to the provisions of Paragraph 19 hereof The license granted hereunder shall
terminate automatically upon termination of the Agreement.


 


19.                                 Termination.


 


This Agreement may be terminated by either
party upon the provision to the other party often (10) days notice in writing.


 


20.                                 Notices
and Other Communications.


 


Notices and other communications, including,
without limitation, confirmations, transaction reports, statements of account
and margin calls shall be deemed personally delivered and received (i) on the
day of transmission if sent electronically through the System, or (ii) on the
next business day if sent by mail or otherwise. ARCA hereby agrees that JPMSI
shall have no liability for any loss, damage or expense, and ARCA hereby waives
any and all claims arising, directly or indirectly, in connection with any
failure to receive any such notice or communication.


 

















 


21.                                 Address
for Notices.


 


All notices, requests, demands, and other
communications under this Agreement or in connection herewith, if required to
be made in writing, shall be given to or made upon the parties as follows:


 


	
  If to ARCA:

  	
   

  	
  Archipelago
  L.L.C.

  
	
   

  	
   

  	
  100 South
  Wacker Drive

  
	
   

  	
   

  	
  Suite 2012

  
	
   

  	
   

  	
  Chicago, IL
  60606

  
	
   

  	
   

  	
  Attn: Kevin
  J.P. O’Hara

  
	
   

  	
   

  	
  General Counsel

  
	
   

  	
   

  	
   

  
	
  If to JPMSI:

  	
   

  	
  J.P. Morgan
  Securities, Inc.

  
	
   

  	
   

  	
  60 Wall
  Street

  
	
   

  	
   

  	
  New York, NY
  10260

  
	
   

  	
   

  	
  Attn: Robert
  C. Gasser

  
	
   

  	
   

  	
  With a copy
  to the General Counsel

  



 


22.                                 Non-Waiver
and Other Remedies.


 


Failure of
either party to insist upon the strict and punctual performance of any
provision hereof shall not constitute waiver of nor estoppel against asserting
the right to require such performance, nor shall a waiver or estoppel in one
instance constitute a waiver or estoppel with respect to a later breach,
whether of a similar nature or otherwise.


 


23.                                 Unenforceable
Terms.


 


In the event any term or provision of this
Agreement shall for any reason be invalid, illegal, or unenforceable in any
respect, this Agreement shall be interpreted and construed as if such term or
provision had never been included herein and the validity and enforceability of
any other provision hereof shall be unaffected thereby.


 


24.                                 Assignability.


 


This
Agreement, and each and every covenant, term, and condition hereof shall be
binding upon and inure to the benefit of the parties and their respective
successors, but neither this Agreement nor any rights hereunder shall be
assignable directly or indirectly by either party to a third party, except with
the prior written consent of the other.


 


25.                                 Applicable Law and
Regulation


 


All orders
entered into the System and all transactions executed for ARCA’s account shall
be subject to the laws, rules, and regulations of the Securities and Exchange 


 

















 


Commission (the “SEC”), the National Association of Securities Dealers,
Inc. (the “NASD”), applicable laws, rules and regulations of any federal, state
or self-regulatory agency, and the constitution, rules, regulations and customs
of the exchanges, markets and clearing agencies where transactions for ARCA are
executed, cleared or settled.


 


26.                                 Governing
Law; Jurisdiction; Venue


 


This Agreement shall be enforced, governed by
and construed in accordance with the laws of the State of New York applicable
to agreements made and to be performed entirely within such State and without
regard to its choice of law provisions, and, except to the extent that
arbitration is provided for and elected by ARCA hereunder, the parties hereto
agree to the exclusive jurisdiction and venue of any federal or state court
sitting in New York State and waive any defense regarding lack of jurisdiction
or venue of any court sitting in New York.


 


27.                                 Arbitration.


 


27.1                    Arbitration
is final and binding on the parties.


 


27.2                    The
parties are waiving their right to seek remedies in court, including the right
to a jury trial.


 


27.3                    Pre-arbitration
discovery is generally more limited than and different from court proceedings.


 


27.4                    The
arbitrators’ award is not required to include factual findings or legal
reasoning and any party’s right to appeal or to seek modification of rulings by
the arbitrators is strictly limited.


 


27.5                    The
panel of arbitrators will typically include a minority of arbitrators who were
or are affiliated with the securities industry.


 


Any controversy
between JPMSI, or any of its affiliates or ally of their shareholders,
officers, directors or employees on the one hand, and ARCA, its shareholders,
officers, directors, or employees on the other hand, arising out of, or
relating to, this Agreement, or the account(s) established hereunder, shall be
settled by arbitration, in accordance with the rules then obtaining of any one
of the following: The American Arbitration Association, or the New York Stock
Exchange, Inc., or any other Exchange of which JPMSI is a member, or the
National Association of Securities Dealers, Inc., as ARCA may elect. If ARCA
does not make such election before the expiration of five (5) business days
after a written request from JPMSI to make such election, JPMSI shall choose
the arbitration or other forum. Any arbitration hereunder shall be before at
least three arbitrators, unless the rules of the selected arbitration forum do
not permit three arbitrators, and the award of the arbitrators, or a majority
of them, shall be final, and judgment upon the award rendered may be entered in
any court, state or federal, having jurisdiction. This agreement to arbitrate
does not entitle ARCA to obtain arbitration of 


 

















 


claims
that would be barred by relevant statutes of limitations if such claims are or
were brought in a court of competent jurisdiction. If, at the time that a
demand for arbitration is made or an election or notice of intention to
arbitrate is served, the claims sought to be arbitrated would have been barred
by the relevant statute of limitations or other time bar, either party to this
Agreement may assert the limitations as a bar to the arbitration by applying to
any court of competent jurisdiction, and ARCA expressly agrees that any issues
relating to the application of a statute of limitations or other time bar, are
referable to such court. The failure to assert such bar by application to a
court, however, shall not preclude its assertion before the arbitrators.


 


28.                                 Changes,
Alterations and Modifications.


 


No changes, alterations, or modifications
hereto shall be effective unless in writing and signed by authorized
representatives of the parties.


 


29.                                 Entire
Agreement.


 


This
Agreement, inclusive of the Schedules hereto, which are hereby expressly
incorporated into and made a part of this Agreement, represents the entire
agreement between the parties hereto and supersedes all prior agreements,
written or oral, with respect to the subject-matter hereof. Such prior
agreements, if any, are hereby cancelled.


 


30.                                 Counterparts.


 


This Agreement
may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
agreement.


 


IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written; and ARCA acknowledges that this Agreement contains a
pre-dispute arbitration clause at Paragraph 27 and that ARCA has received, read
and understands the terms thereof.


 


	
   

  	
  J.P.
  MORGAN SECURITIES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ROBERT
  C. GASSSER

  	
   

  
	
   

  	
   

  	
  Name:  Robert C. Gasser

  
	
   

  	
   

  	
  Title:  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARCHIPELAGO
  L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/GERALD
  D. PUTNAM

  	
   

  
	
   

  	
   

  	
  Name:  Gerald D. Putnam

  
	
   

  	
   

  	
  Title:  Chief Executive Officer