Document:

Exhibit 10.7

 

 

 

 

Services
Agreement

 

by and
between

 

SG Cowen
& Co., LLC

 

and

 

Hewlett-Packard
Company

 

 

Dated as of
December 6, 2004

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.

  	
   

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.

  	
   

  	
  GOALS AND OBJECTIVES;
  REFERENCES

  	
  6

  
	
   

  	
  2.1.

  	
  Goals and Objectives

  	
  6

  
	
   

  	
   

  
	
  Section 3.

  	
   

  	
  TERM

  	
  7

  
	
   

  	
  3.1.

  	
  Initial Term

  	
  7

  
	
   

  	
  3.2.

  	
  Expiration and Renewal

  	
  7

  
	
   

  	
   

  
	
  Section 4.

  	
  SERVICES

  	
  7

  
	
   

  	
  4.1.

  	
  Scope of Services

  	
  7

  
	
   

  	
  4.2.

  	
  Continuous Improvement and Best Practices

  	
  7

  
	
   

  	
  4.3.

  	
  IT Infrastructure

  	
  8

  
	
   

  	
  4.4.

  	
  Knowledge Sharing

  	
  8

  
	
   

  	
  4.5.

  	
  Shared Service Locations; Shared Environments.

  	
  9

  
	
   

  	
  4.6.

  	
  Cooperation

  	
  9

  
	
   

  	
  4.7.

  	
  Office Space

  	
  9

  
	
   

  	
  4.8.

  	
  Policy and Procedures Manual

  	
  9

  
	
   

  	
  4.9.

  	
  Quality Assurance

  	
  10

  
	
   

  	
  4.10.

  	
  Co-location Terms and Conditions

  	
  10

  
	
   

  	
  4.11.

  	
  AUP Terms and Conditions

  	
  10

  
	
   

  	
   

  
	
  Section 5.

  	
  EQUIPMENT

  	
  10

  
	
   

  	
  5.1.

  	
  Equipment

  	
  10

  
	
   

  	
  5.2.

  	
  HP Equipment

  	
  10

  
	
   

  	
   

  
	
  Section 6.

  	
  NEW SERVICES

  	
  10

  
	
   

  	
  6.1.

  	
  New Services

  	
  10

  
	
   

  	
   

  
	
  Section 7.

  	
   

  	
  TRANSITION

  	
  11

  
	
   

  	
  7.1.

  	
  Transition Services.

  	
  11

  
	
   

  	
  7.2.

  	
  Transition Acceptance Tests

  	
  12

  
	
   

  	
  7.3.

  	
  Transition Completion

  	
  12

  
	
   

  	
  7.4.

  	
  Modifications to the Transition Schedule

  	
  12

  
	
   

  	
   

  
	
  Section 8.

  	
   

  	
  HP LICENSES AND PERMITS

  	
  12

  
	
   

  	
  8.1.

  	
  HP Responsibility

  	
  12

  
	
   

  	
   

  
	
  Section 9.

  	
   

  	
  COMPLIANCE WITH LAW;
  CHANGES IN LAW

  	
  13

  
	
   

  	
  9.1.

  	
  Responsibilities

  	
  13

  
						

 

ii

 

	
  Section 10.

  	
   

  	
  SG COWEN SERVICE LOCATIONS

  	
  13

  
	
   

  	
  10.1.

  	
  Use of SG Cowen Service Locations

  	
  13

  
	
   

  	
  10.2.

  	
  Procedures

  	
  13

  
	
   

  	
  10.3.

  	
  Access

  	
  13

  
	
   

  	
  10.4.

  	
  Structure

  	
  14

  
	
   

  	
   

  
	
  Section 11.

  	
   

  	
  THIRD PARTY AGREEMENTS

  	
  14

  
	
   

  	
  11.1.

  	
  Managed Agreements.

  	
  14

  
	
   

  	
  11.2.

  	
  Assigned Agreements

  	
  15

  
	
   

  	
  11.3.

  	
  Performance Under Managed and Assigned Agreements

  	
  15

  
	
   

  	
  11.4.

  	
  Third Party Invoices for Assigned Agreements

  	
  15

  
	
   

  	
  11.5.

  	
  Pass-Through Agreements

  	
  15

  
	
   

  	
  11.6.

  	
  Pass-Through Agreement Invoices

  	
  15

  
	
   

  	
  11.7.

  	
  Refundable Items

  	
  16

  
	
   

  	
   

  
	
  Section 12.

  	
   

  	
  SERVICE LEVELS

  	
  16

  
	
   

  	
  12.1.

  	
  Service Levels

  	
  16

  
	
   

  	
  12.2.

  	
  Measurement and Monitoring Tools

  	
  16

  
	
   

  	
  12.3.

  	
  Reports

  	
  16

  
	
   

  	
  12.4.

  	
  SG Cowen Satisfaction Surveys

  	
  17

  
	
   

  	
  12.5.

  	
  Benchmarking

  	
  17

  
	
   

  	
  12.6.

  	
  Failure to Perform.

  	
  18

  
	
   

  	
   

  
	
  Section 13.

  	
   

  	
  SERVICE LOCATIONS

  	
  19

  
	
   

  	
  13.1.

  	
  Service Locations

  	
  19

  
	
   

  	
  13.2.

  	
  Safety and Security Procedures

  	
  19

  
	
   

  	
   

  
	
  Section 14.

  	
   

  	
  SOLICITATION

  	
  19

  
	
   

  	
  14.1.

  	
  Prohibited Solicitation

  	
  19

  
	
   

  	
   

  
	
  Section 15.

  	
   

  	
  MANAGEMENT AND CONTROL

  	
  20

  
	
   

  	
  15.1.

  	
  Account Manager

  	
  20

  
	
   

  	
  15.2.

  	
  HP Key Personnel

  	
  20

  
	
   

  	
  15.3.

  	
  Steering Committee

  	
  20

  
	
   

  	
  15.4.

  	
  Steering Committee Meetings

  	
  21

  
	
   

  	
  15.5.

  	
  Other Meetings

  	
  21

  
	
   

  	
   

  
	
  Section 16.

  	
   

  	
  SUBCONTRACTORS

  	
  21

  
	
   

  	
  16.1.

  	
  Prior Approval

  	
  21

  
						

 

iii

 

	
  Section 17.

  	
   

  	
  HP STAFF

  	
  22

  
	
   

  	
  17.1.

  	
  HP Staff

  	
  22

  
	
   

  	
  17.2.

  	
  Conduct of HP Staff.

  	
  22

  
	
   

  	
  17.3.

  	
  Turnover

  	
  23

  
	
   

  	
   

  
	
  Section 18.

  	
   

  	
  CHANGE CONTROL PROCEDURES
  AND CHANGES TO THE SERVICES

  	
  23

  
	
   

  	
  18.1.

  	
  Change Control

  	
  23

  
	
   

  	
   

  
	
  Section 19.

  	
   

  	
  SOFTWARE AND PROPRIETARY
  RIGHTS

  	
  23

  
	
   

  	
  19.1.

  	
  SG Cowen Software.

  	
  23

  
	
   

  	
  19.2.

  	
  HP Materials

  	
  24

  
	
   

  	
  19.3.

  	
  Deliverables

  	
  24

  
	
   

  	
   

  
	
  Section 20.

  	
   

  	
  DATA AND RETURN OF DATA

  	
  24

  
	
   

  	
  20.1.

  	
  Ownership of SG Cowen Data

  	
  24

  
	
   

  	
  20.2.

  	
  Copies of Data and Environment

  	
  25

  
	
   

  	
  20.3.

  	
  Return of Data

  	
  25

  
	
   

  	
   

  
	
  Section 21.

  	
   

  	
  CONSENTS

  	
  25

  
	
   

  	
  21.1.

  	
  SG Cowen Consents

  	
  25

  
	
   

  	
  21.2.

  	
  HP Consents

  	
  25

  
	
   

  	
   

  
	
  Section 22.

  	
   

  	
  DISASTER RECOVERY AND
  BUSINESS CONTINUITY

  	
  25

  
	
   

  	
  22.1.

  	
  Disaster Recovery and Business Continuity Plans

  	
  25

  
	
   

  	
   

  
	
  Section 23.

  	
   

  	
  ALLOCATION OF RESOURCES

  	
  26

  
	
   

  	
  23.1.

  	
  Priority

  	
  26

  
	
   

  	
   

  
	
  Section 24.

  	
   

  	
  FEES, PAYMENT AND INVOICES

  	
  26

  
	
   

  	
  24.1.

  	
  Fees

  	
  26

  
	
   

  	
  24.2.

  	
  Refunds and Credits for Non-Provision of Services

  	
  26

  
	
   

  	
  24.3.

  	
  Costs and Expenses

  	
  26

  
	
   

  	
  24.4.

  	
  Reimbursable Items

  	
  27

  
	
   

  	
  24.5.

  	
  Unused Credits

  	
  27

  
	
   

  	
  24.6.

  	
  Proration

  	
  27

  
	
   

  	
  24.7.

  	
  Recurring Costs

  	
  27

  
	
   

  	
  24.8.

  	
  Time of Payment

  	
  27

  
	
   

  	
  24.9.

  	
  Disputed Payment

  	
  27

  
	
   

  	
  24.10.

  	
  Renewal Term Charge Adjustment

  	
  27

  
						

 

iv

 

	
  Section 25.

  	
   

  	
  TAXES

  	
  28

  
	
   

  	
  25.1.

  	
  Taxes

  	
  28

  
	
   

  	
   

  
	
  Section 26.

  	
   

  	
  AUDITS

  	
  29

  
	
   

  	
  26.1.

  	
  Audits

  	
  29

  
	
   

  	
  26.2.

  	
  Services

  	
  29

  
	
   

  	
  26.3.

  	
  Fee Audit

  	
  30

  
	
   

  	
  26.4.

  	
  Record Retention

  	
  30

  
	
   

  	
  26.5.

  	
  Facilities

  	
  30

  
	
   

  	
   

  
	
  Section 27.

  	
   

  	
  CONFIDENTIALITY

  	
  30

  
	
   

  	
  27.1.

  	
  Confidential Information.

  	
  30

  
	
   

  	
  27.2.

  	
  Obligations.

  	
  31

  
	
   

  	
  27.3.

  	
  Exclusions

  	
  32

  
	
   

  	
  27.4.

  	
  Loss of Confidential Information

  	
  32

  
	
   

  	
  27.5.

  	
  Injunctive Relief

  	
  33

  
	
   

  	
  27.6.

  	
  Time Limitation

  	
  33

  
	
   

  	
   

  
	
  Section 28.

  	
   

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
  33

  
	
   

  	
  28.1.

  	
  By HP.

  	
  33

  
	
   

  	
  28.2.

  	
  Mutual Representations and Warranties.

  	
  34

  
	
   

  	
  28.3.

  	
  Disclaimer of Warranties

  	
  34

  
	
   

  	
   

  
	
  Section 29.

  	
   

  	
  DISPUTE RESOLUTION

  	
  35

  
	
   

  	
  29.1.

  	
  Dispute Resolution Procedure

  	
  35

  
	
   

  	
  29.2.

  	
  Escalation of Dispute.

  	
  35

  
	
   

  	
  29.3.

  	
  Injunctive Relief

  	
  35

  
	
   

  	
  29.4.

  	
  Continuity of Base Services

  	
  35

  
	
   

  	
  29.5.

  	
  Additional Dispute Resolution Terms.

  	
  35

  
	
   

  	
   

  
	
  Section 30.

  	
   

  	
  TERMINATION BY SG COWEN

  	
  35

  
	
   

  	
  30.1.

  	
  Termination for Cause.

  	
  35

  
	
   

  	
  30.2.

  	
  Termination for Convenience

  	
  36

  
	
   

  	
  30.3.

  	
  Termination for Violation of Laws

  	
  36

  
	
   

  	
  30.4.

  	
  Termination for Bankruptcy

  	
  36

  
	
   

  	
  30.5.

  	
  Termination for Force Majeure

  	
  37

  
	
   

  	
  30.6.

  	
  Termination for SLA Failure

  	
  37

  
	
   

  	
  30.7.

  	
  Cumulative Remedies

  	
  37

  
	
   

  	
  30.8.

  	
  Adjustment

  	
  37

  
	
   

  	
  30.9.

  	
  Permitted Solicitation Following Termination

  	
  37

  
						

 

v

 

	
  Section 31.

  	
   

  	
  TERMINATION BY HP

  	
  38

  
	
   

  	
  31.1.

  	
  Termination for Failure to Pay

  	
  38

  
	
   

  	
  31.2.

  	
  Termination for Bankruptcy

  	
  38

  
	
   

  	
  31.3.

  	
  No Other Grounds for Termination

  	
  38

  
	
   

  	
   

  
	
  Section 32.

  	
   

  	
  TERMINATION/EXPIRATION
  ASSISTANCE

  	
  39

  
	
   

  	
  32.1.

  	
  Termination/Expiration Assistance

  	
  39

  
	
   

  	
   

  
	
  Section 33.

  	
   

  	
  LIMITATION OF LIABILITY

  	
  41

  
	
   

  	
  33.1.

  	
  NO CONSEQUENTIAL DAMAGES

  	
  41

  
	
   

  	
  33.2.

  	
  DIRECT DAMAGES

  	
  41

  
	
   

  	
  33.3.

  	
  EXCLUSIONS

  	
  41

  
	
   

  	
  33.4.

  	
  Direct Damages

  	
  41

  
	
   

  	
   

  
	
  Section 34.

  	
   

  	
  INDEMNIFICATION

  	
  42

  
	
   

  	
  34.1.

  	
  Indemnity by HP

  	
  42

  
	
   

  	
  34.2.

  	
  Intellectual Property Indemnity by HP

  	
  43

  
	
   

  	
  34.3.

  	
  Intellectual Property Indemnity by SG Cowen

  	
  44

  
	
   

  	
  34.4.

  	
  Personal Injury and Property Damage Indemnity

  	
  44

  
	
   

  	
  34.5.

  	
  Indemnification Procedures

  	
  45

  
	
   

  	
   

  
	
  Section 35.

  	
   

  	
  INSURANCE

  	
  45

  
	
   

  	
  35.1.

  	
  Insurance Coverage

  	
  45

  
	
   

  	
  35.2.

  	
  Insurance Terms.

  	
  46

  
	
   

  	
   

  
	
  Section 36.

  	
   

  	
  MISCELLANEOUS PROVISIONS

  	
  47

  
	
   

  	
  36.1.

  	
  Assignment

  	
  47

  
	
   

  	
  36.2.

  	
  Notice

  	
  47

  
	
   

  	
  36.3.

  	
  Counterparts

  	
  48

  
	
   

  	
  36.4.

  	
  Force Majeure.

  	
  48

  
	
   

  	
  36.5.

  	
  Relationship

  	
  48

  
	
   

  	
  36.6.

  	
  Severability

  	
  48

  
	
   

  	
  36.7.

  	
  Waiver Remedies

  	
  48

  
	
   

  	
  36.8.

  	
  Consents and Approvals

  	
  49

  
	
   

  	
  36.9.

  	
  No Publicity

  	
  49

  
	
   

  	
  36.10.

  	
  Entire Agreement

  	
  49

  
	
   

  	
  36.11.

  	
  Amendments

  	
  49

  
	
   

  	
  36.12.

  	
  Headings

  	
  49

  
	
   

  	
  36.13.

  	
  Order of Precedence

  	
  49

  
	
   

  	
  36.14.

  	
  Survival

  	
  49

  
						

 

vi

 

	
   

  	
  36.15.

  	
  Covenant of Further Assurances

  	
  49

  
	
   

  	
  36.16.

  	
  Negotiated Terms

  	
  50

  
	
   

  	
  36.17.

  	
  Governing Law and Jurisdiction

  	
  50

  
	
   

  	
  36.18.

  	
  Exports

  	
  50

  
	
   

  	
  36.19.

  	
  United Nations Declaration

  	
  50

  

 

vii

 

SERVICES AGREEMENT

 

This Services Agreement
(this “Agreement”) is made as of the 6th day of December, 2004 (the “Effective
Date”) by and between SG Cowen & Co., LLC, a Delaware limited liability
company (“SG Cowen”) and Hewlett-Packard Company, a Delaware corporation (“HP”).

 

WHEREAS, HP desires to
provide to SG Cowen, and SG Cowen desires to obtain from HP, the services
described in this Agreement in accordance with the terms and conditions set
forth in this Agreement; and

 

WHEREAS, SG Cowen and HP
have engaged in extensive negotiations and discussions that have culminated in
the formation of the relationship described herein; and

 

WHEREAS, simultaneously
herewith, SG Cowen is entering into an agreement with SAVVIS Communications
Corporation (“SAVVIS”) for the provision of services complementary to the
services contemplated herein; and

 

WHEREAS, the parties intend
that HP will be responsible for the implementation of the HP/SAVVIS solution,
and will manage, among other suppliers, SAVVIS, its performance and its
relationship with SG Cowen.

 

NOW, THEREFORE, for and in
consideration of the agreements of the Parties set forth below, SG Cowen and HP
agree as follows:

 

Section 1.                                          DEFINITIONS

 

“Account Manager”
shall have the meaning set forth in Section 15.1.

 

“Affiliates”, shall
mean, collectively, (i) any entity Controlling, Controlled by or under common
Control with SG Cowen, and (ii) limited liability companies, partnerships
and other entities managed by SG Cowen or an Affiliate.  At SG Cowen’s option, (a) an entity
shall be deemed to remain an Affiliate of SG Cowen for twenty four (24) months
after the date it ceases to be Controlled by SG Cowen (provided that SG Cowen
shall remain responsible for such entity’s compliance with its obligations
under this Agreement as if it was an Affiliate of SG Cowen during such period),
and (b) the purchaser of all or substantially all the assets of any line
of business of SG Cowen or its Affiliates (including the assets of the business
in a specific geography or set of geographies) shall be deemed an Affiliate of
SG Cowen for twenty four (24) months after the date of purchase, with respect
to the business acquired.

 

“Applications Software”
means those programs and other Software in Source Code and Object Code
(including the supporting documentation, media, on-line help functions and
tutorials) that perform user or business-related information processing
functions and telecommunication tasks. 
Applications Software includes database management software,
development, measurement, and monitoring tools, and middleware.

 

“Assigned Agreements”
shall have the meaning set forth in Section 11.2.

 

“Base Case” shall
have the meaning set forth in Schedule C.

 

 

“Base Service Levels”
shall mean the service levels and standards for the performance of the Base
Services as set forth in Schedule B.

 

“Base Services” shall
have the meaning set forth in Section 4.1.

 

“Benchmarker” shall
have the meaning set forth in Section 12.5.

 

“Change Control
Procedures” shall have the meaning set forth in Section 18.1.

 

“Code” shall mean
computer programming code including microcode, as applicable.

 

“Confidential Information”
shall have the meaning set forth in Section 27.1(a).

 

“Control” and its
derivatives shall mean possessing, directly or indirectly, the power to direct
or cause the direction of the management, policies and operations of an entity,
whether through ownership of voting securities, by contract or otherwise.

 

“Critical Services”
shall mean those Services that are mission critical or necessary for SG Cowen
or an Affiliate to conduct its business, and shall include any Services that
are designated as Critical Services by SG Cowen in writing.

 

“Deliverables” shall
have the meaning set forth in Section 19.3.

 

“Disaster Recovery Plan”
shall have the meaning set forth in Section 22.1.

 

“ECI” shall have the
meaning set forth in Section 24.10.

 

“Equipment” shall
mean the Managed Equipment and the HP Equipment.

 

“Fees” shall have the
meaning set forth in Section 24.1.

 

“Force Majeure Event”
shall have the meaning set forth in Section 36.4.

 

“Governmental Authority”
shall mean any applicable federation, nation, state, sovereign or government,
any federal, supranational, regional, state, local or municipal political
subdivision, any governmental or administrative body, instrumentality,
department or agency, or any court, administrative hearing body, arbitrator,
commission or other similar dispute resolving panel or body, and any other
entity exercising executive, legislative, judicial, regulatory, taxing or
administrative functions of a government with jurisdiction over the applicable
matter.

 

“HP Account Manager”
shall have the meaning set forth in Section 15.1.

 

“HP Agents” shall
mean the agents, subcontractors and vendors of HP.

 

“HP Consents” shall
mean all consents, licenses, permits, authorizations or approvals necessary to
allow:  (i) HP and HP Agents to access or
use any of (1) HP Software, including any Third Party Software which is HP
Software, (2) any assets owned or leased by HP or HP Agents, and/or (3) any
third party services retained by HP to provide the Services, and (ii) SG
Cowen and its employees, subcontractors and agents to access or use any of the
HP Materials or the Deliverables.

 

2

 

“HP Equipment” shall
mean the computing, telecommunications and other equipment, and associated
attachments, features, accessories and peripheral devices (including storage
devices and printers), leased or owned by HP or HP Agents or its or their
suppliers and used by HP or HP Agents to provide the Services.

 

“HP Key Personnel”
shall mean the HP Account Manager and such other individuals set forth on Schedule J.

 

“HP Materials” shall
have the meaning set forth in Section 19.2.

 

“HP Staff” shall mean
those employees of HP engaged in providing the Services, as described in
further detail in Section 17.1.

 

“HP Regulatory
Requirements” shall mean all Laws to which HP or HP Agents are required to
adhere or submit or voluntarily adheres or submits.

 

“HP Service Location”
shall mean any HP or HP Agent service location that is set forth in
Schedule A or has otherwise been pre-approved by SG Cowen in writing.

 

“HP Software” shall
mean all Applications Software and Systems Software, and any related
documentation and other related materials, owned or licensed by HP.  The HP Software includes the software
identified in Schedule O as HP Software.

 

“HP Tools” shall mean
any software development tools, know how, methodologies, processes,
technologies or algorithms used by HP or HP Agents in providing the Services
and based upon trade secrets or proprietary information of HP or HP Agents or
otherwise owned or licensed by HP or HP Agents.

 

“HP Transition Manager”
shall have the meaning set forth in Section 15.1.

 

“Improved Technology”
shall mean any new information processing technology developments, including
new software and hardware developments, that could reasonably be expected to
have a positive impact on SG Cowen’s or an Affiliate’s business or on HP’s
business as it relates to providing the Services to SG Cowen hereunder.

 

“Including” or “e.g.”
shall mean “including, without limitation”.

 

“Initial Term” shall
have the meaning set forth in Section 3.1.

 

“IT Infrastructure”
shall have the meaning set forth in Section 4.3.

 

“Laws” shall mean any
laws, statutes, ordinances, codes, rules, regulations, published standards,
permits, judgments, decrees, writs, injunctions, rulings, orders,
administrative guidance and/or other requirements of any Governmental
Authority.  References to any Law (or any
item included in the term “Laws”) shall also mean references to such Law in
changed or supplemented form or to a newly adopted Law replacing such Law.

 

“Losses” shall mean
all losses, liabilities, damages and claims, and all related costs and expenses
(including legal fees and disbursements and costs and expenses of investigation
and litigation, and costs of settlement, judgment, interest and penalties).

 

3

 

“Managed Agreements”
shall have the meaning set forth in Section 11.1(a).

 

“Managed Equipment”
shall mean the computing, telecommunications and other equipment, and
associated attachments, features, accessories and peripheral devices (including
storage devices and printers), leased or owned by SG Cowen or its contractors
(other than HP) and used by HP to provide the Services.

 

“New Service Levels”
shall mean the service levels established by HP and SG Cowen in connection with
a New Service in accordance with the terms and conditions of this Agreement.

 

“New Services” shall
mean those services meeting all of the following criteria:  (a) that are outside the scope of the
Base Services; (b) that are materially different from the Base Services
and that are not included in the Base Case; and (c) for which no charging
methodology exists in Schedule C as of the later of the Effective Date or such
time as such New Service is required or requested by SG Cowen.

 

“Notice” shall have
the meaning set forth in Section 36.2.

 

“Object Code” shall
mean Code substantially in binary form. 
Object Code is directly executable by a computer after processing, but
without compilation or assembly.

 

“Other Service Location”
shall mean any location, other than a SG Cowen Service Location or an HP
Service Location, from which Services are provided.

 

“Party” shall mean SG
Cowen or HP and collectively the “Parties”.

 

“Pass-Through Agreement
Invoices” shall mean any invoices submitted by third parties in connection
with the Pass-Through Agreements.

 

“Pass-Through Agreements”
shall mean the third party agreements set forth in Schedule I.

 

“Policy and Procedures
Manual” shall have the meaning set forth in Section 4.8.

 

“Renewal Term” shall
have the meaning set forth in Section 3.2.

 

“SG Cowen Consents”
shall mean all consents, licenses, permits, authorizations or approvals
necessary to allow HP to use or access SG Cowen Software, SG Cowen Service
Locations and Managed Equipment to perform the Services in accordance with this
Agreement.

 

“SG Cowen Data” shall
mean all data and information submitted to HP by SG Cowen, its Affiliates or
its or their suppliers, residing on the Equipment or obtained, processed or
managed by HP or HP Agents in connection with, or during the performance of,
the Services; and information relating to SG Cowen’s or an Affiliate’s
employees; any SG Cowen or Affiliate technology, operations, facilities,
consumer markets, products, capacities, systems, procedures, security
practices, research, development, business affairs and finances, ideas,
concepts, innovations, inventions, designs, business methodologies,
improvements, trade secrets, copyrightable subject matter and other proprietary
information; and all information derived from any of the foregoing.  For avoidance of doubt, SG Cowen Data shall
not include HP Materials.

 

4

 

“SG Cowen Service
Locations” shall mean any and all service locations of SG Cowen or its
contractors (other than HP or HP Agents) where Services are to be provided,
including initially, those set forth in Schedule A.

 

“SG Cowen Software”
shall mean all Applications Software and Systems Software, and any related
documentation and other related materials, owned or licensed by SG Cowen.  The SG Cowen Software includes the software
identified in Schedule N as SG Cowen Software.

 

“Service Level Credits”
shall have the meaning set forth in Section 12.6(a).

 

“Service Levels”
shall mean the Base Service Levels and the New Service Levels, collectively.

 

“Service Location”
shall mean any SG Cowen Service Location, HP Service Location or Other Service
Location.

 

“Services” shall mean
the Base Services and the New Services, collectively.

 

“Services Commencement
Date” shall mean June 6, 2005; provided, however, if the Transition
Completion Date occurs later than June 6, 2005, subject to Section 7.1, the
Services Commencement Date shall mean the Transition Completion Date.

 

“Software” shall mean
the Applications Software and the Systems Software, collectively.

 

“Source Code” shall
mean Code other than Object Code, and includes Code that may be displayed in a
form readable and understandable by a programmer of ordinary skill, as well as
any enhancements, corrections and documentation related thereto.  Source Code includes related Source Code
level system documentation, comments and procedural code, such as job control
language.

 

“Statement of Work”
or “SOW” shall mean the Statement of Work and all appendices thereto,
attached to this Agreement as Schedule A, which describes the Services that are
to be provided by HP and related obligations of the Parties.  The Statement of Work and its appendices and
other documents referenced therein are incorporated into this Agreement by this
reference.

 

“Steering Committee”
shall have the meaning set forth in Section 15.3.

 

“Systems Software”
shall mean those programs and programming (including the supporting
documentation, media, on-line help facilities and tutorials), other than
Applications Software, that perform tasks which are required to operate the
Applications Software or otherwise support the provision of the Services.  The Systems Software includes operating
systems, systems utilities, data security software, telecommunications and
database managers.

 

“Systems” shall mean
the Software and the Equipment, collectively.

 

“Technology Plan”
shall have the meaning set forth in Section 4.2.

 

“Term” shall mean the
Initial Term and any Renewal Term as set forth in Sections 3.1 and 3.2.

 

5

 

“Termination/Expiration
Assistance” shall have the meaning set forth in Section 32.1.

 

“Termination/Expiration
Assistance Period” shall mean a period of time designated by SG Cowen, not
to exceed eighteen (18) months after the expiration or termination of this
Agreement, during which HP shall provide Termination/Expiration Assistance
Services in accordance with Section 32.

 

“Third Party Services”
shall have the meaning set forth in Section 4.6.

 

“Third Party Software”
shall mean the Applications Software and Systems Software used to provide the
Services, which are provided under license to HP or SG Cowen by a third party,
and includes any related software and ongoing services (e.g., maintenance and support services,
upgrades, subscription services) provided by third parties.

 

“Transition” shall
have the meaning set forth in Section 7.1(a).

 

“Transition Acceptance
Testing” shall have the meaning set forth in Section 7.2.

 

“Transition Commencement
Date” shall mean December 6, 2004.

 

“Transition Completion
Date” shall have the meaning set forth in Section 7.3.

 

“Transition Plan”
shall have the meaning set forth in Section 7.1(a).

 

“Transition Schedule”
shall have the meaning set forth in Section 7.1(c).

 

“Transition Services”
shall have the meaning set forth in Section 7.1(c).

 

“Turnover Plan” shall
have the meaning set forth in Section 32.1(a).

 

“Virus” shall mean:
(a) program code, programming instruction or set of instructions intentionally
constructed to, or with the ability to, threaten, infect, erase, attack,
assault, vandalize, defraud, disrupt, damage, interfere with or otherwise
adversely affect computer programs, data files or operations; and/or (b) other
code typically designated to be a virus, including any Trojan horse or worm.

 

Section 2.                                          GOALS AND OBJECTIVES;
REFERENCES

 

2.1.                              Goals and Objectives.  The
Parties agree upon the following specific goals and objectives for this
Agreement:

 

(a)                                  The Parties agree that the Services shall be provided
under terms and conditions that are designed to provide SG Cowen with maximum
flexibility in (i) its future use of information technology in the
operation of its business, (ii) the hardware, software and services
vendors engaged to support SG Cowen’s information technology operations, and
(iii) the event SG Cowen desires to transition to other providers of
information technology services, efficiently transitioning to such and to new
technology platforms, all in accordance with the terms and conditions of this
Agreement.

 

(b)                                 The Services will be provided in a cost-effective
and efficient manner in

 

6

 

light of the material
requirements of the Services and the applicable Service Levels.

 

The foregoing list of goals
and objectives is not intended to expand the scope of HP’s or SG Cowen’s
obligations under this Agreement, or to alter the plain meaning of the terms
and conditions of this Agreement. 
However, to the extent the terms and conditions of this Agreement do not
address a particular circumstance or are otherwise unclear or ambiguous, those
terms and conditions are to be interpreted and construed so as to give effect
to these goals and objectives.

 

Section 3.                                          TERM

 

3.1.                              Initial Term.  The
initial term (the “Initial Term”) of this Agreement shall commence on the
Effective Date and shall continue until five (5) years from June 6, 2005,
unless terminated earlier by either Party in accordance with this Agreement.

 

3.2.                              Expiration and Renewal.  Upon
expiration of the Initial Term, this Agreement shall automatically renew for up
to two (2) additional one (1) year periods (each, a “Renewal Term”) on the same
terms and conditions hereof, unless SG Cowen elects not to renew this Agreement
as described below.  Not later than
one-hundred-eighty (180) days prior to the expiration of the Initial Term or
the then-current Renewal Term, HP shall notify SG Cowen in writing of the
upcoming expiration date.  SG Cowen shall
have the right, in SG Cowen’s sole discretion, to notify HP at least ninety
(90) days prior to the expiration of the Initial Term or the then-current
Renewal Term if SG Cowen elects not to renew this Agreement.  If HP does not provide SG Cowen with notice
of expiration as described above, this Agreement shall automatically renew at
the end of the Initial Term or the Renewal Term then in effect, as applicable;
provided, however, SG Cowen shall have the right, in its sole discretion, to
terminate the Renewal Term so automatically renewed, upon providing HP at least
sixty (60) days prior written notice.

 

Section 4.                                          SERVICES

 

4.1.                              Scope of Services. 
Commencing as of the Transition Commencement Date with respect to
Transition Services, and the Services Commencement Date for all other Services,
and thereafter throughout the Term and any Termination/Expiration Assistance
Period, HP shall perform the Services in accordance with the terms of this
Agreement, including those described in the Statement of Work (the “SOW”) set
forth in Schedule A.  The scope of the
services to be provided by HP hereunder includes:  (a) the services, processes, functions and
responsibilities described in this Agreement, including the SOW; (b) the
services, functions and responsibilities reflected in the Base Case; (c) any
services, processes, functions and responsibilities not specifically described
in this Agreement but which are required for, or inherent in the proper
performance and delivery of the services described in the preceding subclause
(a), whether or not such services, functions, or responsibilities are
specifically described in this Agreement; and (d) providing all support
for the Services as described in this Agreement (foregoing subsections (a)
through (d), collectively, the “Base Services”).  For the avoidance of doubt, unless expressly
stated otherwise herein, all services shall be deemed to be part of the Base
Services.  SG Cowen obligations, if any,
are solely as explicitly set forth in this Agreement, including the SOW.

 

4.2.                              Continuous Improvement and Best Practices.  HP
shall: (a) on a continuous basis, as part of its total quality management
process, identify and implement ways to improve

 

7

 

the Services and Service
Levels and (b) identify and apply to the Services proven techniques and
technology from within its operations or other third party processes that would
benefit SG Cowen either operationally or financially.  Upon SG Cowen’s request, HP shall provide SG
Cowen with access to HP’s specialized services, personnel and resources that
are applicable to SG Cowen’s business. 
HP shall implement such processes at no charge to SG Cowen (with the
understanding that the parties shall follow the Change Control Procedures if
the implementation of such processes would require HP to incur significant
expense).  As part of the Base Services,
HP shall prepare an annual technology plan (the “Technology Plan”).  Each Technology Plan after the first shall,
in addition to the requirements of this Section, review and assess the immediately
preceding Technology Plan.

 

4.3.                              IT Infrastructure.  HP
has reviewed and participated in the development of SG Cowen’s planned IT
infrastructure (the “IT infrastructure”) to be implemented as of the Services
Commencement Date, and has validated and approved the technical architecture
and product standards therefor set forth on Schedule D.  If the IT infrastructure is deficient such
that the Services do not successfully complete Transition Acceptance Testing or
the Services fail to meet the Service Levels, and such deficiency or failure
(i) was not due to (a) inaccurate information contained in SG Cowen’s RFP or
(b) inaccurate information provided by SG Cowen to HP during HP’s due diligence
which concluded on December 31, 2004, or information HP knew or should have
known based on its due diligence or verification of information provided by SG
Cowen, HP shall be responsible for taking all corrective actions to remedy such
deficiencies, the costs of which shall be borne by HP, including the purchase
and implementation of, or reimbursement of costs incurred by SG Cowen for the
purchase and implementation of, additions or upgrades to Systems components
(including equipment, software, telecommunications components, etc.), such that
the IT infrastructure is sufficient for the HP/SAVVIS solution for the
anticipated Term.

 

As part of the Base
Services, HP shall assist SG Cowen in preparing long-term strategic information
technology plans and short-term implementation plans on an annual basis.  Such assistance to be provided by HP shall
include, in each case on SG Cowen’s request, (a) active participation with SG
Cowen representatives on permanent and ad-hoc committees and working groups
addressing such issues; (b) assessments of the then-current SG Cowen
information technology standards; (c) analyses of the appropriate direction for
such SG Cowen information technology standards in light of business priorities,
business strategies, HP’s technical knowledge/expertise and competitive market
forces; and d) recommendations regarding information technology architectures
and platforms, software and hardware products, information technology
strategies and directions and other enabling technologies including Improved
Technology.  With respect to each
recommendation, HP shall provide SG Cowen, upon SG Cowen’s request, with any or
all of the following (which shall not bind SG Cowen unless agreed to in writing
by the Parties): (v) cost projections and cost/benefit analyses; (w) the
changes, if any, in the personnel and other resources required to operate and
support the changed environment; (x) the resulting anticipated impact on SG
Cowen’s information technology costs; (y) the expected performance, quality,
responsiveness, efficiency, reliability, security risks and other service levels;
and (z) general plans and projected time schedules for development and
implementation.

 

4.4.                              Knowledge Sharing.  As
part of the Base Services, up to twice every twelve (12) months during the
Term, and on request after at least thirty (30) days’ notice from SG Cowen, HP
shall meet with representatives of SG Cowen in order to: (a) explain to SG
Cowen how the Systems work and should be operated; (b) explain to SG Cowen how
the Services are being

 

8

 

provided, and how the
Services are going to be, or are proposed to be, provided in the future; and
(c) provide to SG Cowen such training and documentation as may be necessary to
enable SG Cowen to understand and operate the Systems and understand and
provide the Services after the expiration or termination of this Agreement.

 

4.5.                              Shared Service Locations; Shared Environments.

 

(a)                                  Shared Service Locations. 
Other than as set forth in Schedule A, all Services will be
provided from a dedicated space in a HP Service Location, at a SG Cowen Service
Location or at a SAVVIS co-location site. 
Other than as set forth in Schedule A, any provision of Services
from space which is not dedicated (i.e., HP
provides services to third parties from such space) shall require SG Cowen’s
prior written consent in each instance.

 

(b)                                 Shared Environment. 
Prior to migrating or relocating any of the Services or SG Cowen’s
Confidential Information (including SG Cowen Data) to a hardware or software
environment that is shared with any third party, HP shall provide to SG Cowen,
for SG Cowen’s approval, a proposal for such migration or relocation, including
cost and price benefits and savings or risks to SG Cowen during the Term and
following the expiration or termination of this Agreement; provided that any
such proposal shall be subject to SG Cowen’s approval in its sole
discretion.  Except as otherwise
expressly provided herein, HP shall not migrate or relocate any of the Services
or any of SG Cowen’s Confidential Information (including SG Cowen Data) to a
shared hardware or software environment without SG Cowen’s prior written
approval.

 

4.6.                              Cooperation.  During the Term and following
any expiration and/or termination of this Agreement (in whole or in part), SG
Cowen may enter into, and HP shall not oppose SG Cowen’s entering into, an
arrangement with a third party or third parties pursuant to which such third
party or third parties may provide services similar to the Services (the “Third
Party Services”).  SG Cowen shall not be
obligated to use HP for services of the type covered in the Services, or for
any additional services or New Services. 
HP shall reasonably cooperate with all other vendors and contractors
providing services to SG Cowen that are related to or dependent upon the Services.

 

4.7.                              Office Space.  Each
party shall provide at its Service Locations, without charge, secure premises,
furnished office space and operating supplies and facilities, including
telephones, power and lighting for use by the other Party’s Account Manager,
and with respect to SG Cowen, for use by HP Staff providing services at a SG
Cowen Service Location.

 

4.8.                              Policy and Procedures Manual.  No
later than thirty (30) days prior to completion of Transition, HP shall prepare
and deliver to SG Cowen for review and approval HP’s Policy and Procedures
Manual (the “Policy and Procedures Manual”), which shall set forth in detail
(a) how HP shall perform the Services, (b) the Equipment and Software
used to provide the Services, and (c) documentation that provides further
information regarding the Services (such as, for example, operations manuals,
user guides, forms of Service Level reports, call lists, escalation procedures,
emergency procedures, and requests for approvals or information).  The Policy and Procedures Manual shall
further describe the activities HP will undertake in order to provide the
Services, including, where appropriate, direction, supervision, monitoring,
quality assurance, staffing, reporting, planning and overseeing activities, and
includes acceptance testing and quality assurance procedures.  HP shall update the Policy and Procedures
Manual throughout the Term, and such updates shall also be provided to SG Cowen
for review and approval within fifteen (15) days of such change.  HP shall perform the Services in accordance

 

9

 

with the then-current
version of the Policy and Procedures Manual. 
The Policy and Procedures Manual shall be for operational purposes only,
and shall not constitute a contractual document.  Accordingly, in the event of a conflict
between the provisions of this Agreement and a Policy and Procedures Manual,
the provisions of this Agreement shall control, and SG Cowen’s acceptance of a
Policy and Procedures Manual shall not be deemed a waiver of any rights of SG
Cowen or HP.

 

4.9.                              Quality Assurance.  HP
shall develop and implement quality assurance processes and procedures to
ensure that the Services are performed in an accurate and timely manner, in
accordance with (a) the SOW and the Service Levels and (b) the terms,
conditions and requirements of this Agreement. 
Such procedures shall include verification, checkpoint reviews, testing,
acceptance, and other procedures for SG Cowen to assure the quality and
timeliness of HP’s performance.

 

4.10.                        Co-location Terms and Conditions.  HP
shall comply with and agrees to the terms and conditions regarding use of
and/or access to the SAVVIS co-location site as set forth in Schedule S.

 

4.11.                        AUP Terms and Conditions.  HP
shall comply with and agrees to the acceptable use terms and conditions as set
forth in Schedule T.

 

Section 5.                                          EQUIPMENT

 

5.1.                              Equipment.  HP shall provide the Base
Services using the Managed Equipment and the HP Equipment.  HP shall use the Managed Equipment and the HP
Equipment solely for the purposes of providing the Services to SG Cowen and its
Affiliates.  HP shall be responsible for
ensuring the proper management and administration of all Managed Equipment,
including the coordination of maintenance and support therefor, all as further
described in the SOW.

 

5.2.                              HP Equipment.  As part of the Base Services, HP
shall make available to SG Cowen all HP Equipment as may be necessary for SG
Cowen to use the Services, including SG Cowen’s use of HP Software, HP Tools
and Third Party Software.

 

Section 6.                                          NEW SERVICES

 

6.1.                              New Services.  “New
Services” shall mean services that are outside the scope of the Services then
in effect.  SG Cowen, in its sole
discretion, may, from time to time during the Term, request that HP perform a
New Service.  Upon receipt of such a
request from SG Cowen, HP shall provide SG Cowen with: (a) a written
description of the work HP anticipates performing in connection with such New
Service; (b) a schedule for commencing and completing the New Service;
(c) HP’s prospective charges for such New Service, which charges shall be
stated in the pricing methodology specified by SG Cowen (e.g., time and
materials, fixed price, “not to exceed”); (d) the human resources
necessary to provide the New Service; and (e) when applicable, acceptance
test criteria and procedures for any new deliverables or services.  HP shall not begin performing any New
Service, and SG Cowen shall not be obligated to pay for any New Service, until
SG Cowen has provided HP with written authorization from the SG Cowen CIO or
CAO to perform the New Service.  To the
extent possible and unless otherwise agreed by the parties, the fees for any
New Service shall be calculated utilizing the rates as set forth in
Schedule C.  Except as otherwise
agreed by the parties, in the event that the actual 

 

10

 

charges for any New Service
provided by HP exceed the estimate of the charges that was included in HP’s
proposal for such New Service, HP shall be responsible for the excess costs of
such New Service.

 

Section 7.                                          TRANSITION

 

7.1.                              Transition Services.

 

(a)                                  HP has, together with its subcontractors,
developed a plan (the “Transition Plan”) describing in detail the transition of
SG Cowen’s current information technology services to the Base Services (the “Transition”),
which is attached hereto as Schedule E, and includes the Equipment and
Software used to effect, and which will be in place upon completion of,
Transition, the activities HP and its subcontractors propose to undertake in
order to carry out Transition and any documentation that provides further
information regarding such Equipment, Software and activities.  For avoidance of doubt, the Transition Plan
will cover all Transition services of HP and its subcontractors necessary in
order to complete Transition as contemplated hereunder.  The Transition Plan shall include a plan for
Transition Acceptance Testing (as defined below) which shall be subject to SG
Cowen’s prior approval, and which shall include sufficient test case scenarios
to validate the completion of Transition Services (as defined below) for all
services.  HP shall be responsible for
managing the transition services for the combined HP/SAVVIS solution and the
Transition Plan shall include HP’s obligations to manage SAVVIS’ transition
activities to ensure a successful and timely transition.  SG Cowen may review and suggest modifications
to the Transition Plan, which shall require the mutual agreement of the
parties.  On a monthly basis throughout
the Term until Transition is completed in accordance with the acceptance
criteria in the Transition Plan, HP, with assistance of its subcontractors,
will provide SG Cowen with an updated Transition Plan for SG Cowen’s review and
approval.  The Transition Plan, including
any final draft(s) and revisions thereof or thereto, shall be deemed
Deliverables; provided, however, that HP acknowledges and agrees that
Transition Plan will contain Confidential Information of SG Cowen which HP is
obligated to protect pursuant to Section 19.3 of this Agreement.  HP acknowledges and agrees that Transition
must be completed, and the Services Commencement Date must occur, by
June 6, 2005, time being of the essence. 
If Transition does not occur by June 6, 2005, HP shall provide SG Cowen
a credit on the first invoice following the Transition Completion Date in an
amount as follows:

 

	
  Number of Calendar Days

  After June 6, 2005 When

  Transition Completion Date Occurs

  	
   

  	
  Credit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1-30 Calendar Days

  	
   

  	
  $

  	
  235,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  31-60 Calendar Days

  	
   

  	
  $

  	
  470,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  over 60 Calendar Days

  	
   

  	
  $

  	
  705,000

  	
   

  

 

To the extent that HP fails
to complete the Transition by June 6, 2005 as a direct result of SG Cowen’s
failure to perform any of its obligations with respect to the Transition which
is identified as being SG Cowen’s responsibility in the SOW, and HP notifies SG
Cowen of such failure, the original deadline of June 6, 2005 shall be extended
by the number of days during which SG Cowen failed to perform said obligation,
for purposes of calculating the above-mentioned credit.

 

11

 

(b)                                 The Parties agree that Transition for certain
Services will be completed, will pass Transition Acceptance Testing described
in Section 7.2 below and will be used in a production environment to provide
Services to SG Cowen, prior to the Transition Completion Date, and that
notwithstanding anything to the contrary in this Agreement, (i) SG Cowen’s
obligations to pay for Services post Transition Completion Date shall not apply
until the Services Commencement Date, and SG Cowen shall have no obligation to
pay for any such Services provided prior to the Services Commencement Date, and
(ii) the Service Levels, Service Level Credits and HP’s obligations thereto
(including reporting) shall commence when such Services are used in a
production environment by SG Cowen.

 

(c)                                  As part of the Base Services, HP will
implement the Transition Plan.  The
Transition Plan shall include a schedule for Transition (the “Transition
Schedule”) set forth in Schedule E, which shall set forth in detail HP’s, HP’s
subcontractors’ and SG Cowen’s obligations during the implementation of the
Transition Plan.  HP shall perform the
Base Services set forth in such Transition Plan (the “Transition Services”)
without causing a material disruption to SG Cowen’s business or operations, and
on a schedule in accordance with the Transition Schedule.  HP acknowledges that, except as set forth in
Schedule E, SG Cowen shall not be providing any resources to HP, HP’s
subcontractors or otherwise in connection with HP’s provision of the Transition
Services.

 

7.2.                              Transition Acceptance Tests.  As
part of the Transition Services, SG Cowen and HP shall perform transition
acceptance testing of the Transition and the results of the Transition (which
shall include the HP/SAVVIS solution) and the implementation of the Services
based on acceptance criteria and procedures to be set forth in the Transition
Plan (the “Transition Acceptance Testing”). 
Except as otherwise provided in the Transition Plan, no part or result
of the Transition will be deemed accepted by SG Cowen unless and until such
part or result of the Transition has been accepted in writing by SG Cowen.

 

7.3.                              Transition Completion.  Upon
the date of the successful completion, at SG Cowen’s discretion, of the
Transition Acceptance Testing, and SG Cowen’s written acceptance of the
Transition and the results of the Transition (such date, the “Transition
Completion Date”), the transition shall be deemed complete.

 

7.4.                              Modifications to the Transition Schedule. 
Notwithstanding any other provision of this Agreement, the parties may
extend, shorten, or otherwise modify the Transition Schedule by mutual
agreement.  In the event that HP believes
that any request by SG Cowen for a change in the Transition Schedule will have
the effect of delaying HP’s ability to achieve a Transition Completion Date on
or before June 6, 2005, HP shall promptly upon receipt of such request
notify SG Cowen of any such anticipated delay.

 

Section 8.                                          HP LICENSES AND PERMITS

 

8.1.                              HP Responsibility.  HP
is responsible for obtaining, and shall pay all costs related to obtaining, all
necessary licenses, consents, approvals, permits and authorizations required by
any Laws, which licenses, consents, approvals, permits and authorizations are
legally required to be obtained and necessary for HP’s performance and delivery
of the Services hereunder.

 

12

 

Section 9.                                          COMPLIANCE WITH LAW; CHANGES
IN LAW

 

9.1.                              Responsibilities.  As
part of the Base Services, HP shall identify the impact of changes in
applicable Laws on its ability to deliver the Services.  HP shall notify SG Cowen of such changes and shall
work with SG Cowen to identify the impact of such changes on how SG Cowen uses
the Services.  SG Cowen and HP shall
promptly make any resulting modifications to the Services as reasonably
necessary as a result of such changes through the Change Control Procedures.  If such modifications relate to HP’s
business, HP’s or its subcontractors’ performance or delivery under this
Agreement, or are necessary due to changes made by HP (except as may have been
specifically requested by SG Cowen), HP shall make such modifications at its
own expense.  If such modifications relate
to SG Cowen’s business or are necessary due to changes to the Services
specifically requested by SG Cowen, HP shall make such changes at SG Cowen’s
expense.  HP shall, to the extent
possible, ensure that any such modifications do not adversely affect SG Cowen.  Subject to this Section 9.1, HP shall be
responsible for any fines and penalties imposed on HP and SG Cowen arising from
any noncompliance by HP or the HP Agents with the laws in respect of its
delivery of Services, unless caused by SG Cowen or its agents or contractors.

 

Section 10.                                   SG COWEN SERVICE LOCATIONS

 

10.1.                        Use of SG Cowen Service Locations.  For
the period of Transition and throughout the Term, HP shall use SG Cowen Service
Locations set forth in Schedule A for the sole and exclusive purpose of
performing the Services.  Use of such
facilities by HP does not constitute a leasehold interest in favor of HP.  When the SG Cowen Service Locations are no
longer required for performance of the Services, HP shall, at its sole cost and
expense, return such locations to SG Cowen in substantially the same condition
(excluding normal wear and tear and any modifications specifically requested by
SG Cowen) as when HP began use of such locations.

 

10.2.                        Procedures.  HP shall, and shall cause HP
Staff and HP Agents to, keep the SG Cowen Service Locations in good order, not
commit or permit waste or damage to such facilities, not use such facilities
for any unlawful purpose or act, and comply with all of SG Cowen’s standard
policies and procedures regarding access to and use of the SG Cowen Service
Locations, including procedures for the physical security of the SG Cowen
Service Locations and procedures for the security of computer and
telecommunications networks.  SG Cowen’s
procedures for the physical security of the SG Cowen Service Locations as of
the Effective Date do not require an individual to sign a document (other than
a sign in-log) in order to gain access to a SG Cowen Service Location, (e.g.,
an NDA or gate access requirement), and SG Cowen agrees to use reasonable
efforts to notify HP in advance if such procedures change to require an
individual to sign such documentation. 
In the event HP becomes aware of any breach or attempted breach of
security in or involving any SG Cowen Service Location, then HP will
immediately notify SG Cowen of such event, will assist in ascertaining and
containing any damage, and will cooperate with SG Cowen and applicable
Governmental Authorities in addressing such event(s) (including without
limitation in bringing any appropriate legal claims).

 

10.3.                        Access.  HP shall permit SG Cowen, its
Affiliates and their employees, agents, contractors, and representatives to
enter into those portions of the SG Cowen Service Locations occupied by HP
Staff at any time.

 

13

 

10.4.                        Structure.  HP shall not make any
improvements or changes involving structural, mechanical or electrical
alterations to the SG Cowen Service Locations without SG Cowen’s prior written
approval.

 

Section 11.                                   THIRD PARTY AGREEMENTS

 

11.1.                        Managed Agreements.

 

(a)                                  HP shall diligently manage, administer and
maintain the agreements between SG Cowen or an Affiliate and third party
suppliers set forth in Schedule G (the “Managed Agreements”).  HP shall provide SG Cowen with reasonable
notice of any renewal, termination or cancellation dates and fees with respect
to the Managed Agreements.  Nothing in
this Agreement is intended to permit HP to act as SG Cowen’s agent with respect
to the Managed Agreements or otherwise, and HP shall have no right, power or
authority to bind SG Cowen, including with respect to the Managed
Agreements.  HP shall not renew, modify,
terminate or cancel any such Managed Agreements without SG Cowen’s prior
written consent.  Any modification, termination,
cancellation or renewal fees or charges imposed upon SG Cowen in connection
with any such unauthorized modification, termination, cancellation or renewal
shall be paid by HP.  HP shall diligently
perform vendor management for the third-party vendors under the Managed
Agreements including monitoring problem resolution, reviewing new business
proposals, conducting periodic capacity evaluations (prior to capacity
problems), and monitoring vendor performance, service and contract compliance
including monitoring performance against service levels, requesting service
level credits and promptly informing SG Cowen of service level failures and
service level credits requested.  To the
extent HP is itself a vendor under a Managed Agreement, HP shall exert the same
degree of effort and due care in the management of such Managed Agreement as it
does for any other Managed Agreement.  HP
shall take no action with respect to the Managed Agreements which would
adversely affect SG Cowen or otherwise impair its business operations.

 

(b)                                 Managed Agreement Invoices.  HP
shall:

 

(i)                                     receive all Managed Agreement invoices,

 

(ii)                                  review and correct any errors in any such
Managed Agreement invoices in a timely manner, and

 

(iii)                               submit such Managed Agreement invoices to SG
Cowen for payment within a reasonable period of time prior to (A) the due date
or, (B) if a discount for prompt payment is given, as soon as reasonably
practicable prior to the date on which SG Cowen may pay such Managed Agreement
invoice with a discount.

 

(iv)                              SG Cowen shall pay the Managed Agreement
invoices received and approved by HP.  SG
Cowen shall only be responsible for payment of the Managed Agreement invoices,
and any management, administration or maintenance fees or expenses of HP in
connection with the Managed Agreement invoices are included in the fees for the
Base Services.  SG Cowen shall be
responsible for any late fees with respect to the Managed Agreement invoices;
provided, however, that HP submitted the applicable Managed Agreement invoices
to SG Cowen for payment within a reasonable period of time prior to the date
any such Managed Agreement invoice is due. 
If HP fails to submit a Managed Agreement invoice to SG Cowen for
payment in a timely manner, HP shall be responsible for any discount not received
or

 

14

 

any late fees with respect
to such Managed Agreement invoice due to such failure.

 

11.2.                        Assigned Agreements. 
Throughout the Term and as part of the Base Services, HP shall undertake
financial, administrative and maintenance responsibility for the Assigned
Agreements set forth in Schedule H and such other agreements to which the
Parties may mutually agree pursuant to the Change Control Procedures, to the
extent SG Cowen has the legal right to make the assignment (collectively, the “Assigned
Agreements”).  HP may, to the extent
permitted by the Assigned Agreements, renew, modify, terminate or cancel any
such Assigned Agreements, provided that it shall notify SG Cowen in writing in
advance of any such renewal, modification, termination or cancellation.  Any modification, termination or cancellation
fees or charges imposed upon HP or SG Cowen in connection with any such
renewal, modification, termination or cancellation of any Assigned Agreements
shall be paid by HP and SG Cowen shall not be required to reimburse HP for any
such fees or charges.

 

11.3.                        Performance Under Managed and Assigned
Agreements.  Each of SG Cowen and HP shall abide by the
terms of, and shall not breach or violate, any of the Managed Agreements and
the Assigned Agreements.  Each of SG
Cowen and HP shall promptly inform the other Party of any breach of, or misuse
or fraud in connection with, any of the Managed Agreements and Assigned
Agreements of which the notifying Party becomes aware and shall cooperate with
the other Party to prevent or stay any such breach, misuse or fraud.  With respect only to the Assigned Agreements,
each Party shall be responsible for and shall pay all amounts due for any
penalties or charges (including amounts due to a third party as a result of a
Party’s failure to promptly notify the other Party pursuant to the preceding
sentence), associated taxes, legal expenses and other incidental expenses
incurred as a result of such Party’s non-performance of its obligations under
any of the Assigned Agreements.

 

11.4.                        Third Party Invoices for Assigned Agreements.  HP
shall pay all invoices submitted by third parties in connection with the
Assigned Agreements for the period commencing upon assignment of the Assigned
Agreements and shall be responsible for any late fees or other penalties in
respect of such third party invoices (including any failure to pay such
invoices in a timely fashion).

 

11.5.                        Pass-Through Agreements.  HP
shall manage, administer and maintain the Pass-Through Agreements set forth in
Schedule I and such other agreements to which the parties may mutually
agree pursuant to the Change Control Procedures.  HP shall provide SG Cowen with reasonable advance
written notice of any renewal, termination or cancellation dates and fees with
respect to the Pass-Through Agreements. 
HP shall not renew, modify, terminate or cancel any Pass-Through
Agreements without SG Cowen’s prior written consent.  Any modification, termination or cancellation
fees or charges imposed upon SG Cowen or HP in connection with any such
modification, termination or cancellation shall be solely the responsibility
of, and shall be paid by, HP.

 

11.6.                        Pass-Through Agreement Invoices.  HP
shall (a) receive all Pass-Through Agreement Invoices, (b) review and
correct any errors in any such Pass-Through Agreement Invoices in a timely
manner and provide any such corrections to the other party(ies) to such
Pass-Through Agreement(s), (c), if HP notifies the other party to a Pass-Through
Agreement of an error in the invoice and such other party disputes such error,
provide SG Cowen with the information on which HP based its analysis so that SG
Cowen can address the error directly with such other party, and (d) submit
such Pass-Through Agreement Invoices to SG Cowen in a timely fashion for
payment within a reasonable period of time prior to the due date or, if a

 

15

 

discount for such payment is
given, the date on which SG Cowen may pay such Pass-Through Agreement Invoice
with such discount.  SG Cowen shall be
responsible to pay those Pass-Through Agreement Invoices received and approved
by HP, provided that SG Cowen shall only be responsible for payment of the
Pass-Through Agreement Invoices, and any management, administration or
maintenance fees or expenses of HP in connection with the Pass-Through
Agreement Invoices are included in the fees for the Base Services.  As between the Parties, SG Cowen shall be
responsible for any late fees with respect to the Pass-Through Agreement
Invoices; provided, however, that HP submitted the applicable Pass-Through
Agreement Invoices to SG Cowen for payment within a reasonable period of time
prior to the date any such Pass-Through Agreement Invoices were due.  If HP fails to submit a Pass-Through
Agreement Invoice to SG Cowen for payment in a timely manner, HP shall be
responsible for and shall reimburse SG Cowen for any discount not received or
any late fees with respect to such Pass-Through Agreement Invoice due to such
failure.

 

11.7.                        Refundable Items.  In
the event HP receives during the Term any refund, credit or other rebate
(including deposits) in connection with an Assigned Agreement that is
attributable to periods prior to the Effective Date, then HP shall promptly
notify SG Cowen of such refund, credit or rebate and shall promptly pay to SG
Cowen the full amount of such refund, credit or rebate.

 

Section 12.                                   SERVICE LEVELS

 

12.1.                        Service Levels.  HP
shall perform the Services with promptness and diligence, in a workmanlike
manner and in accordance with the Service Levels set forth in Schedule B
(and such other service levels as may be agreed upon for those services) and
the standards set forth in Section 4.1. 
HP shall be excused from its obligation to perform the Services in
accordance with the applicable Service Levels if, and to the extent that, it
cannot meet such Service Levels as a result of SG Cowen failing to perform any
obligation hereunder for which the affected Services are dependent; provided
that HP promptly notifies SG Cowen of any such failure of SG Cowen to perform
an obligation which will or is likely to cause, or has caused, HP to fail to
meet the applicable Service Levels.

 

12.2.                        Measurement and Monitoring Tools.  As
of the Services Commencement Date, HP shall implement and utilize the
measurement and monitoring tools and procedures set forth in the SOW which are
required to measure and report HP’s performance of the Services against the
Service Levels as specified in Schedule B (and such other service levels as may
be agreed upon for those services).  HP
shall ensure that any measurement and monitoring tools are generally
commercially available and that HP’s use of such measurement and monitoring
tools shall not adversely affect the performance of the Equipment and/or
Systems, and will promptly replace any measurement and monitoring tool which
degrades or otherwise negatively impacts the Equipment and/or Systems.  HP shall further ensure that such measurement
and monitoring tools shall permit reporting at a level of detail sufficient to
verify compliance with the Service Levels, and HP acknowledges that such
measurement and monitoring tools shall be subject to audit by SG Cowen.  HP shall provide SG Cowen with information
and access to all such measurement and monitoring tools and procedures upon
request, for purposes of verification.

 

12.3.                        Reports.  As part of the Base Services,
HP shall provide monthly performance reports to SG Cowen as agreed upon by the
Parties from time to time.  As one such
report, HP shall provide a monthly performance report, which shall be delivered
to SG Cowen within seven (7) days after the end of each calendar month,
describing HP’s performance of the Services in

 

16

 

the preceding month (the “Monthly
Performance Report”).  Such Monthly
Performance Report shall:

 

(a)                                  separately address HP’s performance in each
area of the Services;

 

(b)                                 for each area of the Services, assess the
degree to which HP has attained or failed to attain the pertinent objectives in
that area as described in this Agreement, including with respect to the Service
Levels;

 

(c)                                  explain deviations from the Service Levels
and other applicable performance standards and include a plan for corrective action
for each such deviation;

 

(d)                                 describe the status of problem resolution
efforts, ongoing projects, and
other initiatives, and the status of HP’s performance with respect to change
requests; and

 

(e)                                  include such documentation and other
information as SG Cowen may reasonably request for purposes of verifying
compliance with, and meeting the objectives of, this Agreement.

 

12.4.                        SG Cowen Satisfaction Surveys.  No
less frequently than twice annually, HP shall perform customer satisfaction
surveys acceptable to SG Cowen and shall share the results of those surveys
with SG Cowen.  All such results shall be
deemed the property and Confidential Information of SG Cowen.  HP and SG Cowen shall mutually agree upon the
form and content of such surveys during Transition.

 

12.5.                        Benchmarking.  SG
Cowen reserves the right from time to time, at its discretion, beginning in the
second year of this Agreement and with respect to a complete benchmark no more
than once annually, to obtain the services of an independent third party (the “Benchmarker”)
to benchmark the charges for help-desk Services.  The pool of potential benchmarkers shall
consist of the following third party firms: 
(a) Gartner Group; (b) Compass; (c) Meta; and (d) Everest.  Additional third parties may be added if one
or more of the pre-approved benchmarkers is unavailable, so long as they are
independent (i.e., not a competitor of HP or an outsourcing consultant to SG
Cowen), are experienced in conducting benchmarking in the relevant industry and
region, and possess the information necessary to arrive at an objective and
proper result.  If none of the
pre-approved benchmark service providers is available to perform the benchmark
services, then the parties will use best efforts to agree upon a third party qualified
to perform the services.  If the Parties
do not agree within twenty (20) business days of SG Cowen’s request, then the
third party shall be designated by SG Cowen. 
SG Cowen will bear the costs and expenses of conducting the benchmark
and all results of the benchmark and materials created pursuant to the
Benchmark shall be SG Cowen’s sole and exclusive property and Confidential
Information.  The Benchmarker shall
perform the benchmarking in accordance with the Benchmarker’s documented
procedures which shall be provided to the Parties prior to the start of the
benchmarking process and to which the Parties may comment prior to the
benchmarking, as modified herein.  The
Benchmarker shall compare the costs, charges and/or performance of the Services
under this Agreement, as appropriate, for the Services being benchmarked to the
costs, charges, and/or performance in a representative sample of well-managed
IT operations performing services similar to the Services.  The Benchmarker shall select the representative
sample from entities (x) identified by the Benchmarker, and
(y) identified by a Party and approved by the Benchmarker.  The following conditions apply to the
representative sample: (i) it may include entities that have not

 

17

 

outsourced IT operations,
and (ii) it may include entities that are outsourcing customers of
HP.  The Benchmarker is to conduct a
benchmarking as promptly as is prudent in the circumstances.  In conducting the benchmarking, the Benchmarker
shall normalize the data used to perform the benchmarking to accommodate, as
appropriate, differences in volume of services, scope of services, service
levels, financing or payment streams, and other pertinent factors.  Each Party shall be provided a reasonable
opportunity to review, comment on and request changes in the Benchmarker’s
proposed findings.  Following such review
and comment, the Benchmarker shall issue a final report of its findings and
conclusions, which final report shall be the property and Confidential
Information of SG Cowen.  Based upon the
final results of such benchmarking, including the aggregate results from the
customer satisfaction surveys, HP shall cooperate with SG Cowen to investigate
variances, if any, and to take corrective action to respond to any
deficiencies; provided that, if such results show that the Fees paid by SG
Cowen are higher than the midpoint of fees charged with respect to other well
managed outsourcing organizations, HP shall have sixty (60) days to reduce the
Fees charged hereunder accordingly.  Any
dispute as to such deficiencies, variances or reduction shall be resolved
pursuant to Section 29.

 

12.6.                        Failure to Perform.

 

(a)                                  Service Level Credits.  HP
recognizes that SG Cowen is paying HP to deliver the Services at specified
Service Levels.  Without limiting any
other remedy which SG Cowen may have hereunder or otherwise, whether at law, in
equity, or otherwise, if HP fails to meet any Service Level(s) (other than due
to a Force Majeure event), then HP shall credit to SG Cowen the performance
credits specified in Schedule B (the “Service Level Credits”) in recognition of
the diminished value of the Services resulting from HP’s failure to meet the
agreed upon level of performance.  HP
acknowledges and agrees that such Service Level Credits shall not be deemed a
penalty.

 

(b)                                 Failure.  If HP fails to meet any
Service Levels, HP shall promptly and in accordance with the Service Levels
(i) investigate and report on the causes of the problem; (ii) advise
SG Cowen, as and to the extent requested by SG Cowen, of the status of remedial
efforts that will be and/or are being undertaken with respect to such problems;
(iii) correct the problem(s) that led to such failure, and begin meeting
the Service Levels; and (iv) take appropriate preventive measures to
ensure that the applicable problem(s) do not recur.  The foregoing shall not be deemed to limit
any other remedy to which SG Cowen may be entitled hereunder or otherwise,
whether at law, in equity, or otherwise.

 

(c)                                  Root Cause Analysis. 
Within twenty-four (24) hours of any Critical Service Level failure, HP
shall: (i) perform a root cause analysis to identify the cause of such
failure; (ii) provide SG Cowen with a report detailing the cause of, and
procedure for correcting, such failure; and (iii) provide SG Cowen with
assurances satisfactory to SG Cowen that such failure will not recur after the
procedure has been completed.

 

(d)                                 Additional Termination Right.  In
addition to, and without limiting any other rights or remedies of SG Cowen
under this Agreement, whether at law, in equity or otherwise, SG Cowen shall
have the right to terminate this Agreement, without payment of any termination
fee or other liability, if, in any two (2) months in a consecutive three (3)
month period, (i) HP fails to perform any Services in accordance with any of
the Critical Service Levels , or (ii) HP fails to perform Services in
accordance with four (4) or more of the Service Levels.

 

18

 

Section 13.                                   SERVICE LOCATIONS

 

13.1.                        Service Locations.  The
Services shall be provided from (a) the SG Cowen Service Locations set
forth on Schedule A, (b) the HP Service Locations set forth on
Schedule A, and (c) the Other Service Locations; provided, however,
that the use of any such Other Service Location(s) not set forth in
Schedule A for the provision of Services shall be subject to SG Cowen’s
prior written approval.  At SG Cowen’s
request, HP shall provide SG Cowen with access to the HP Service Locations and
the Other Service Locations, and access to the HP Equipment, including for the
purpose of performing security tests. 
For the avoidance of doubt, HP shall at all times perform the Services
from, and provide the Services to, SG Cowen (including disaster recovery
services) from a location within the continental United States or Canada.  HP shall have the right to change an HP
Service Location to a different location owned or controlled by HP within the
continental United States or Canada, provided that (i) HP provides SG
Cowen with reasonable advance notice of such relocation, (ii) such
location complies with the requirements of this Agreement, and (iii) the
relocation of such Services will not adversely affect SG Cowen or its Affiliates
or HP’s ability to provide the Services (including meeting the Service
Levels).  Any incremental expense
incurred by SG Cowen as a result of any relocation of the provision of Services
to a different HP location or to an Other Service Location shall be promptly
reimbursed to SG Cowen by HP.  HP and HP
Agents may not provide or market any products or services to a third party from
any of the SG Cowen Service Locations without SG Cowen’s prior written consent.

 

13.2.                        Safety and Security Procedures.  HP
shall maintain and comply with, and shall ensure that HP Agents comply with,
safety and security procedures at all Service Locations.  Additionally, HP shall enforce all safety and
security procedures at all HP Service Locations.  HP shall ensure that the safety and security
procedures in place at (i) all HP Service Locations are at least a rigorous as
those in place at the SG Cowen Service Locations, and (ii) all Other Service
Locations are at least as rigorous as those in place at the HP Service
Locations.  As part of the Base Services,
HP shall maintain, and shall ensure that HP Agents maintain, safety and
security procedures for SG Cowen’s Systems and telecommunications
infrastructure, which safety and security procedures protect the data and
information of SG Cowen and Affiliates and their vendors (including without
limitation all of SG Cowen’s Confidential Information and all SG Cowen Data)
from unauthorized access or use.  HP
shall immediately inform SG Cowen of, and shall cause HP Agents to immediately
inform HP of, any breaches in security or potential breaches in security at any
of the Service Locations.

 

Section 14.                                   SOLICITATION

 

14.1.                        Prohibited Solicitation. 
Unless mutually agreed upon, neither party will directly solicit the
other party’s or its subcontractors’ employees directly involved in the
performance or receipt of the Services to undertake employment with the
soliciting party, its parent company, or any subsidiary or affiliated company
of the soliciting party during such employee’s performance or receipt of such
Services or within a period on one (1) year thereafter.  This prohibition does not apply to (i)
personnel of either party who respond to a public advertisement or who
otherwise participate in a public job solicitation, or (ii) SG Cowen, with
respect to any employees of HP who provide support services on-site at SG Cowen
Service Locations.  For avoidance of
doubt, this Section shall not bind or apply to any employment activities by SG
Cowen’s parent, Société Générale.

 

19

 

Section 15.                                   MANAGEMENT AND CONTROL

 

15.1.                        Account Manager.  Each
Party shall appoint an individual who shall serve as the primary representative
of such Party under this Agreement (each an “Account Manager”).  Each Account Manager shall (a) have
overall responsibility for managing and coordinating the performance under this
Agreement of the Party that appointed him or her; (b) be authorized to act
for and on behalf of such Party under this Agreement with respect to the day to
day operation of the Services; and (c) be responsible for attempting to
resolve disputes concerning this Agreement in accordance with the dispute
resolution procedures set forth in Section 29. 
The Account Manager appointed by HP (the “HP Account Manager”) shall
serve as the single point of accountability for the Services and shall be based
in SG Cowen’s offices.  HP shall not
assign an HP Account Manager to the account of any business or organization
that competes with SG Cowen, without SG Cowen’s prior consent, for the period
commencing upon the Effective Date and continuing until one (1) year after the
Transition Completion Date.  HP’s
appointment of the HP Account Manager shall be subject to SG Cowen’s prior
written consent.  HP shall additionally
assign a Transition Manager (the “HP Transition Manager”) who will be
responsible for overseeing all Transition Services, and a Delivery Manager (the
“HP Delivery Manager”) who will be responsible for overseeing HP’s delivery of
Services.  HP’s appointment of the HP
Transition Manager and the HP Delivery Manager shall be subject to SG Cowen’s
prior written consent.  The HP Account
Manager, HP Delivery Manager and HP Transition Manager shall be deemed Key
Personnel.

 

15.2.                        HP Key Personnel.  Key
Personnel are identified on Schedule J. 
HP Key Personnel shall devote substantially full time and full effort to
the Services.  HP shall not replace or
reassign the Key Personnel for two (2) years from the date such individual has
been assigned to SG Cowen’s account (provided that with respect to the
Transition Managers, such restriction shall apply until the Transition
Completion Date, and provided further, that with respect to the first Account
Manager assigned and in place during Transition and on the Transition
Completion Date, and subject to SG Cowen’s satisfaction with the stability of
the combined outsourcing solution, such restriction shall apply for six (6)
months after the Transition Completion Date) unless SG Cowen has requested such
replacement or reassignment or the Key Personnel: (a) voluntarily resigns
from HP, (b) is dismissed by HP for misconduct (e.g., fraud, drug abuse,
theft), (c) materially fails to perform his or her duties and
responsibilities pursuant to this Agreement, or (d) is unable to work due
to his or her disability.  If SG Cowen
decides, in its sole discretion, that certain Key Personnel should not continue
in his or her position, SG Cowen may request removal of such Key Personnel by
giving HP notice of the request and HP shall promptly replace such Key Personnel
as soon as possible.  HP shall have a
plan in place in the event that any person designated as Key Personnel is no
longer available to staff the key position.

 

15.3.                        Steering Committee. 
Within ten (10) days following the Effective Date, the SG Cowen Account
Manager and the HP Account Manager each shall appoint three (3) representatives
to serve on a management steering committee (the “Steering Committee”).  SG Cowen shall designate one (1) of its
representatives on the Steering Committee to act as the chairperson of the
Steering Committee.  The Steering
Committee will meet on a regular basis to discuss the relationship of the
Parties and the performance of this Agreement, and shall be responsible for
(a) advising with respect to all strategic and tactical decisions for SG
Cowen with respect to the Services and (b) monitoring and resolving
disputes in accordance with Section 29. 
Either Party may change any of its representatives on the Steering
Committee, other than the Account Managers, upon written notice to the other Party.
The SAVVIS Project Manager

 

20

 

shall meet with the Steering
Committee as needed but at least monthly. 
Such meetings shall include discussions relating to the progress of the
Transition and all Services after the Transition Completion Date and the
resolution of any disputes.

 

15.4.                        Steering Committee Meetings. 
During the Transition, the Steering Committee shall meet no less
frequently than twice a week.  Such
meetings shall include discussions relating to the progress of the Transition
and to resolve any disputes.  After the
period ending three (3) months following the Transition Completion Date, the
Steering Committee shall meet at least once per calendar month or at such other
frequency as mutually agreed to by the Parties. 
HP shall produce and distribute minutes for each such meeting.

 

15.5.                        Other Meetings. 
During the Term, representatives of the Parties shall meet periodically
or as requested by SG Cowen to discuss matters arising under this
Agreement.  HP shall produce and
distribute minutes for each such meeting. 
Such meetings shall include, at a minimum, the following:

 

(a)                                  a periodic meeting at least monthly to review
performance and monthly reports and invoices, planned or anticipated activities
and changes that might impact costs and expenses, performance, and such other
matters as deemed appropriate by SG Cowen;

 

(b)                                 a quarterly management meeting to review the
monthly reports for the calendar quarter, review HP’s overall performance under
the Agreement, review progress on the resolution of issues, provide a strategic
outlook for SG Cowen’s information systems requirements, and discuss such other
matters as appropriate;

 

(c)                                  an annual meeting of senior management of
both Parties to review relevant contract and performance issues; and

 

(d)                                 such other meetings of SG Cowen and HP Staff,
including senior management of HP, as SG Cowen or HP may reasonably request.

 

Section 16.                                   SUBCONTRACTORS

 

16.1.                        Prior Approval. 
Other than individuals providing services as independent contractors and
the approved subcontractors set forth in Schedule F, prior to subcontracting
any Services which may entail HP Staff having direct interaction with SG Cowen,
Affiliates or its or their employees, personnel, contractors or agents, HP
shall notify SG Cowen of the proposed subcontractor and shall obtain SG Cowen’s
prior written approval of such subcontractor. 
Notwithstanding any other provision of this Agreement, all potential
subcontractors shall be required to have executed a nondisclosure agreement
substantially similar to the Subcontractor Nondisclosure Agreement as set forth
on Schedule K (but which in all events shall contain confidentiality
obligations no less restrictive than those set forth in such Subcontractor
Nondisclosure Agreement) before disclosure of any of SG Cowen’s Confidential
Information to such subcontractors, such subcontractor performing any Services,
or HP entering into any discussions with such subcontractors regarding this Agreement
or the relationship between the Parties. 
Any subcontracting shall not release HP from its responsibility for its
obligations under this Agreement.  HP
shall be responsible for the work and activities of each of its subcontractors,
including compliance with the terms of this Agreement, and shall be and remain
responsible for the performance of all obligations under this Agreement that
are required to be performed by any subcontractor.  HP shall be responsible for all, and SG Cowen
shall have no

 

21

 

responsibility for any,
payments required to be made to HP’s subcontractors.

 

Section 17.                                   HP STAFF

 

17.1.                        HP Staff.  HP shall appoint and maintain
sufficient staff (with corresponding coverage for vacation and other outages)
(the “HP Staff”) of suitable training and skills to provide the Services in
accordance with the Service Levels.  HP
shall provide SG Cowen with a list of all HP employees then-currently dedicated
full time to the HP Staff at the end of every ninety (90) day period after the
Effective Date.  HP shall initially
appoint and maintain at least fifteen (15) full-time dedicated individuals to
the HP Staff to perform services at the SG Cowen Service Locations, as further
described in Schedule A.  HP shall
have the right to reduce such dedicated HP Staff to at least twelve (12)
full-time dedicated individuals; provided, however, that HP shall not reduce
the number of full time personnel on the HP Staff until such time as SG Cowen
confirms that HP has met the Service Levels in each instance, and SG Cowen has
provided approval in writing.  In
addition to HP’s obligations and SG Cowen’s remedies set forth elsewhere in
this Agreement, if after any such reduction in HP Staff, HP fails to meet any
of the Service Levels two (2) times in any three (3) consecutive month period,
HP shall, at no additional cost to SG Cowen, increase the number of full-time
dedicated individuals on the HP Staff as necessary to remedy such Service Level
failures and maintain such level of staffing.

 

17.2.                        Conduct of HP Staff.

 

For purposes of this Section
17.2, all references to HP Staff shall be deemed to include HP Agents.

 

(a)                                  While at SG Cowen Service Locations or other
SG Cowen premises, HP Staff shall: (i) comply with rules and regulations
regarding personal and professional conduct generally applicable to personnel
at such SG Cowen Sites from time to time; (ii) comply with reasonable
requests of SG Cowen personnel pertaining to personal and professional conduct;
(iii) at SG Cowen’s request, attend workplace training offered by SG Cowen
during SG Cowen’s regular business hours (with the cost of such training to be
borne by SG Cowen); and (iv) otherwise conduct themselves in a
businesslike manner.

 

(b)                                 All HP Staff shall clearly identify
themselves as HP Staff and not as employees of SG Cowen.  This shall include any and all
communications, whether oral, written or electronic, to the extent reasonably
necessary to so identify themselves. 
Each HP Staff shall wear a badge indicating that he or she is not an
employee of SG Cowen.

 

(c)                                  If SG Cowen decides, in its sole discretion,
that any personnel providing services should not continue in his or her
position, SG Cowen may request removal of that personnel by giving HP notice of
the request and HP shall immediately remove said personnel and, if requested by
SG Cowen, provide a replacement acceptable to SG Cowen promptly, as soon as
possible.  HP shall also remove and
provide a replacement for any other personnel if the work product delivered by
such personnel is unsatisfactory to SG Cowen.

 

(d)                                 Except as otherwise approved by SG Cowen,
those HP Staff located at SG Cowen Service Locations or on SG Cowen’s premises
may only provide Services which support SG Cowen’s operations.

 

(e)                                  All HP Staff and HP Agents shall comply with
the SG Cowen Trading

 

22

 

Restrictions set forth in
Schedule L, as may be amended by SG Cowen from time to time.  HP shall ensure that each of the HP Staff has
signed a confidentiality agreement with HP substantially similar to the form
set forth on Schedule R prior to their engagement to perform any obligations
under this Agreement.

 

(f)                                    HP shall ensure that HP Staff and HP Agents
comply with the obligations in items (a), (b), (d) and (e) above.

 

17.3.                        Turnover.  SG Cowen and HP agree that it
is in their best interests to keep the turnover rate of HP Staff to a
reasonably low level.  To the extent that
the turnover rate adversely affects (or as reasonably demonstrated by SG Cowen
could adversely affect) the provision of the Services, HP shall use reasonable
efforts to keep the turnover rate to a reasonably low level, and HP
acknowledges and agrees that notwithstanding transfer or turnover of HP Staff,
HP remains obligated to perform the Services in accordance with this Agreement.

 

Section 18.                                   CHANGE CONTROL PROCEDURES
AND CHANGES TO THE SERVICES

 

18.1.                        Change Control.  All
changes in the Services, Deliverables or other aspects of HP’s performance
(each, a “Change”, and collectively, Changes”) shall be made pursuant to the
change control procedures (“Change Control Procedures”) attached hereto as
Schedule M.  No Change shall be
implemented without SG Cowen’s prior written approval except as may be
necessary on a temporary basis to maintain the continuity of the Services on an
emergency basis.  HP shall (i) schedule
all Changes so as not to unreasonably interrupt SG Cowen’s business operations,
(ii) prepare and deliver to SG Cowen a monthly rolling schedule for ongoing and
planned Changes for the next 30-day period, (iii) monitor the status of Changes
against the applicable schedule, and (iv) document and provide to SG Cowen
notification of all Changes performed on a temporary basis to maintain the
continuity of the Services no later than the next business day after the Change
was made.

 

Section 19.                                   SOFTWARE AND PROPRIETARY
RIGHTS

 

19.1.                        SG Cowen Software.

 

(a)                                  Subject to the terms and conditions of this
Agreement, SG Cowen hereby grants to HP, during the Term and during the Termination/Expiration
Assistance Period, a non-exclusive, non-transferable, non-sublicensable (except
as set forth in this Section 19), limited, revocable right to operate the SG
Cowen Software set forth on Schedule N and, to the extent permissible under
any applicable third party agreements, the SG Cowen Third Party Software,
solely for the purpose of providing and solely to the extent necessary to
provide the Services to SG Cowen hereunder. 
As between SG Cowen and HP, SG Cowen shall own all SG Cowen Software and
HP shall have no rights therein except for the license set forth in this
Section.

 

(b)                                 HP may sublicense, to the extent permissible
under the applicable third party agreements (if any), to HP Agents the right to
operate and use the SG Cowen Software set forth on Schedule N, and the SG
Cowen Third Party Software, solely to the extent necessary to provide the
Services that such HP Agents are responsible for providing to SG Cowen in
accordance with this Agreement.  In the
event HP is prohibited from sublicensing to HP Agents any such Third Party
Software under the applicable third party license agreement,

 

23

 

SG Cowen shall cooperate
with HP in implementing a reasonable work-around, provided that if necessary to
provide the Services hereunder, HP shall
acquire, at no additional cost, charge or expense to SG Cowen, the same or
equivalent software necessary to enable the applicable HP Agents to provide
those Services that such HP Agents are responsible for providing to SG Cowen
hereunder.

 

19.2.                        HP Materials.  HP
hereby grants to SG Cowen and its Affiliates and their respective employees,
officers, directors, agents and contractors, during the Term and during the
Termination/Expiration Assistance Period, the fully paid, worldwide,
irrevocable, nonexclusive right and license to access and use, the HP Software,
Third Party Software and HP Tools set forth on Schedule O and any other HP
Software, Third Party Software, or other software used by HP in providing the Services
for which the parties mutually agree SG Cowen requires use of and access to in
connection with SG Cowen’s receipt or use of the Services (collectively, the “HP
Materials”).

 

19.3.                        Deliverables. 
Unless otherwise specified in a statement of work or other document
signed by the Parties, other than as set forth in this Section 19.3, HP
will retain exclusive ownership in all deliverables created by HP hereunder and
will own all intellectual property rights, title and interest in any ideas,
concepts, know how, documentation or techniques developed by HP under this
Agreement (all of the foregoing, collectively with deliverables created by HP,
the “Deliverables”).  For avoidance of
doubt, the Deliverables shall not include any Confidential Information of SG
Cowen or any proprietary SG Cowen information or materials, including all
pre-existing SG Cowen information and materials, with SG Cowen retaining sole
and exclusive ownership of all of the foregoing.  Notwithstanding anything to the contrary in
this Agreement, SG Cowen will retain sole and exclusive ownership in all
Deliverables which are modifications or extensions of SG Cowen proprietary
materials and information, including pre-existing materials and
information.  HP grants and shall be
deemed to have granted to SG Cowen and its Affiliates and their respective
employees, officers, directors, agents and contractors a fully paid, worldwide,
irrevocable, perpetual, nonexclusive right and license, including the right to
sublicense to third party service providers, to use, execute, reproduce,
display, perform, transmit, distribute and modify the Deliverables for SG Cowen
“Internal Use” only.  For purposes of
this Agreement, “Internal Use” means use for the benefit of SG Cowen and its
Affiliates and specifically does not include the right to sell, offer to sell
or otherwise convey the Deliverables to a third party.  SG Cowen shall retain exclusive ownership in
all modifications to the Deliverables created by or on behalf of SG Cowen
(other than by HP and/or this Agreement), and will own all intellectual
property rights, title and interest therein.

 

Section 20.                                   DATA AND RETURN OF DATA

 

20.1.                        Ownership of SG Cowen Data.  As
between HP and SG Cowen, all SG Cowen Data is, will be, and shall remain the
property of SG Cowen and shall be deemed Confidential Information of SG
Cowen.  SG Cowen Data shall not be
(a) used by HP other than in connection with providing the Services and
then solely in accordance with the terms and conditions of this Agreement
(including without limitation the confidentiality restrictions set forth in
Section 27), (b) disclosed, sold, assigned, leased or otherwise provided
to third parties by HP or HP Agents or (c) commercially exploited by or on
behalf of HP or HP Agents.  In the event
of any loss, theft, destruction, or alteration of any SG Cowen Data provided to
HP, HP Staff and/or HP Agents in connection with this Agreement, HP bears the
full and complete responsibility for the cost of reloading and recreating SG
Cowen Data (or reimbursing costs incurred by SG

 

24

 

Cowen for same) from the
last available back-up so that such SG Cowen Data is current and complete;
provided, however, that to the extent that any such loss, theft, destruction or
alteration is caused as a result of SG Cowen’s fault, SG Cowen shall be
responsible for such costs.  HP shall (x)
store SG Cowen Data separately from other HP property and/or any property of
any third party, and (y) promptly remove SG Cowen Data from storage at SG
Cowen’s request.  HP shall establish and
maintain safeguards against the loss, theft, destruction, alteration, or
disclosure of SG Cowen Data in the possession or control of HP, HP Staff and/or
HP Agents, which safeguards are no less rigorous than those maintained by HP
for its own information of a similar nature, but in no event shall HP use less
than commercially reasonable efforts to safeguard such SG Cowen Data.  SG Cowen shall have the right to establish
backup security for SG Cowen Data and to keep all backups of SG Cowen Data and
SG Cowen Data files in its possession if it chooses.

 

20.2.                        Copies of Data and Environment.  As
part of the Base Services, upon request by SG Cowen, but no less than once
every calendar quarter, HP shall, and shall cause all HP Agents to, provide SG
Cowen with a copy of the entire computing environment provided by HP as part of
the Services, including all SG Cowen Data, applications, tools and all other
data stored on the Equipment in the format and on the media requested by SG
Cowen (including, without limitation, copies of back up, archival or history
logs therefor).

 

20.3.                        Return of Data.  Upon
expiration or termination of this Agreement, and/or upon request by SG Cowen at
any time (with respect to SG Cowen Data not required for HP to provide the
Services), HP shall immediately, and shall cause all HP Staff and HP Agents to
immediately, (a) at HP’s expense, return to SG Cowen, in the format and on the
media requested by SG Cowen, all of SG Cowen Data, and (b) erase or destroy all
copies of the SG Cowen Data in HP’s possession or under HP’s or its agents’
control (as applicable).  Any media
containing SG Cowen Data for archival or other purposes shall be used by HP and
HP Agents solely for back up purposes, and shall be purged or destroyed, at SG
Cowen’s option, upon request.

 

Section 21.                                   CONSENTS

 

21.1.                        SG Cowen Consents.  All
SG Cowen Consents shall be obtained by SG Cowen.  SG Cowen shall pay any costs of obtaining the
SG Cowen Consents.

 

21.2.                        HP Consents.  All HP Consents shall be
obtained by HP.  HP shall pay all costs
of obtaining the HP Consents.

 

Section 22.                                   DISASTER RECOVERY AND
BUSINESS CONTINUITY

 

22.1.                        Disaster Recovery and Business Continuity
Plans.  HP shall assume responsibility for those
tasks described in the SOW relating to SG Cowen’s disaster recovery and
business continuity plans.  HP represents
that it has an established Disaster Recovery Plan and Business Continuity Plan
relating to the Services, the current copy of which is attached in Schedule P,
and that HP shall update such plans as necessary to ensure that they are
consistent with all services provided to SG Cowen by SAVVIS and SAVVIS’
disaster recovery and business continuity plans, in a manner such that the
HP/SAVVIS solution continues to be provided seamlessly, provided that SAVVIS
complies with the terms of its own disaster recovery and business continuity
plans.  HP shall update and test the
operability of its Disaster Recovery

 

25

 

and Business Continuity
plans in accordance with industry standards and shall certify to SG Cowen
following such update and testing that the Disaster Recovery and Business
Continuity plans are fully operational. 
In the event of a disaster or Force Majeure Event, HP shall immediately
submit a plan to SG Cowen to restore any Services that were affected
thereby.  HP shall reinstate all Critical
Services within four (4) hours of the occurrence of the disaster or Force Majeure
Event.  If such event prevents, hinders,
or delays performance of any Services for more than twenty-four (24) hours,
then in addition to SG Cowen receiving a credit against any fees due to HP for
the time performance is prevented, hindered or delayed, SG Cowen may procure
the Services from an alternate source(s) and HP shall reimburse SG Cowen for
all costs and expenses incurred by SG Cowen in procuring such Services during
the period of prevention, hindrance, or delay up to $50,000.  Without limiting the foregoing, if the Force
Majeure Event prevents performance of the Services for more than thirty (30)
days, SG Cowen may terminate this Agreement, in whole or in part, pursuant to
Section 30.5.  In the event of, in
response to, or in contemplation of any disaster or Force Majeure Event, HP shall
not increase any fees charged under this Agreement.  In all events, SG Cowen shall not be
obligated to pay for Services which HP Staff are unable to provide due to a
disaster or Force Majeure Event (including loss of, or inability to use
facilities at, SG Cowen Service Locations).

 

Section 23.            ALLOCATION OF RESOURCES

 

23.1.        Priority.  Whenever a Force Majeure Event
or a disaster causes HP to allocate limited resources between or among
customers, SG Cowen shall be treated no less favorably with respect to such
allocation than any other HP customer similarly affected.  In addition, at no time shall any HP
resources which are dedicated to the SG Cowen account be allocated to any other
account, including without limitation during a Force Majeure Event or a
disaster, without SG Cowen’s prior written consent.

 

Section 24.            FEES, PAYMENT AND INVOICES

 

24.1.        Fees.  All fees to be payable and
which HP may charge under this Agreement (the “Fees”) for the Base Services are
set forth in Schedule C.  SG Cowen shall
not be required to pay HP any amounts for the Services other than those payable
under this Section 24 and Schedule C.  On
the first day of each calendar month of the Term, HP shall invoice SG Cowen for
the Services performed in accordance with this Agreement during the previous
calendar month.  Invoices shall be itemized as
designated by SG Cowen.  Invoices shall
be in the form set forth on Schedule C. 
Any and all payments to HP hereunder may be made, in SG Cowen’s sole
discretion, via electronic means.

 

24.2.        Refunds and Credits for Non-Provision of
Services.  In the event HP is unable to provide Services
due to a Force Majeure Event or a disaster, then in addition to other remedies
available to SG Cowen hereunder or at law or in equity, SG Cowen shall not be
required to pay HP for Services with respect to the period such Services were
not provided, and HP shall credit to SG Cowen any amounts prepaid for such
Services with respect to such period.

 

24.3.        Costs and Expenses. 
Except as expressly set forth in this Agreement, any costs and expenses
of HP incurred in providing the Services are included in the Fees and shall not
be reimbursed by SG Cowen unless agreed to by SG Cowen in writing in advance,
in its discretion, on a case-by-case basis. 
Any such reimbursement shall be in accordance with the SG Cowen Vendor
Expense Policy set forth on Schedule Q, as may be amended by SG Cowen from
time

 

26

 

to time upon notice to HP.

 

24.4.        Reimbursable Items. 
Without limiting any other obligations (including payment obligations)
of HP hereunder, HP shall pay, or promptly reimburse SG Cowen at SG Cowen’s
request, for any third party fees, charges or costs relating to or arising out
of: (a) HP’s improper use of the Managed Equipment, SG Cowen Software or
SG Cowen Service Locations, or (b) HP contacting a third party to provide
support or maintenance to correct an error or problem with the SG Cowen
Software or Managed Equipment when such third party is not responsible for, or
its product is not a cause of, such error or problem.

 

24.5.        Unused Credits.  Any
unused credits against future payments owed to either party by the other Party
pursuant to this Agreement shall be paid to the Party to whom such credits are
or were owed within thirty (30) days of the expiration or termination of this
Agreement.

 

24.6.        Proration.  All periodic fees or charges
under this Agreement are to be computed on a calendar month basis and shall be
prorated on a daily basis for any partial month.

 

24.7.        Recurring Costs.  If
general conditions or technology changes materially reduce HP’s recurring costs
in providing the Services, HP shall renegotiate with SG Cowen to share those
reduced costs with SG Cowen, provided, however, that in the event that a cost
reduction is brought about by any idea or innovation of SG Cowen, such
reduction in recurring costs shall be effectuated exclusively for the benefit
of SG Cowen, including to the exclusion of any of HP’s other customers.

 

24.8.        Time of Payment.  Any
undisputed sum due HP pursuant to this Agreement shall be due and payable
within forty-five (45) days after
receipt by SG Cowen of the corresponding invoice from HP.

 

24.9.        Disputed Payment.  SG
Cowen may withhold payment of any charges that SG Cowen disputes in good
faith.  In the event that a given invoice
includes both disputed and undisputed charges, SG Cowen shall pay all
undisputed items in accordance with this Section 24 and Schedule C, and may
withhold payment of the disputed charges in accordance with this Section.  SG Cowen shall notify HP in writing on or
before the date that any amount is so withheld and describe, in reasonable
detail, the reason for such withholding. 
SG Cowen and HP shall diligently pursue an expedited resolution of such
dispute in accordance with the dispute resolution procedures set forth in
Section 29.  In the event SG Cowen has
already paid a disputed charge, SG Cowen shall notify HP and the Parties shall
diligently pursue an expedited resolution of such dispute in accordance with
the dispute resolution procedures set forth in Section 29; provided, however,
that (i) if the Parties determine SG Cowen wrongfully paid such amount, HP
shall credit such amount on the next invoice, and (ii) if the Parties are
unable to resolve such dispute within two (2) weeks, SG Cowen shall be entitled
to withhold the disputed charge from other charges due.

 

24.10.      Renewal Term Charge Adjustment.  HP
shall be entitled to adjust the Fees applicable to any Renewal Term under this
Agreement by applying a cost of living increase to the labor component of such
Fees calculated as the lesser of (i) six percent (6%) or (ii) the percentage
increase in the Employment Cost Index (ECI) ECU212225: The Total Compensation
Index for Service Producing Industries: 
White Collar Occupations, Excluding Sales Occupations published by the
U.S. Department of Labor Bureau of Labor Statistics (the “ECI”) (using the

 

27

 

most current ECI published
prior to the commencement of a Renewal Term as compared to the ECI published
for the month one (1) year prior to such most current ECI).  For avoidance of doubt, this calculation
shall be made based on increases in the ECI over the annual period immediately
preceding commencement of the applicable Renewal Term, and shall not be
calculated on a cumulative basis.  In
order for HP to apply any such cost of living increase, HP must provide notice
to SG Cowen (as part of its notice to SG Cowen of upcoming Renewal Terms
pursuant to Section 3.2), which includes notice of any cost of living increase,
the Fee components to which any such increase will apply and the details of the
calculation of such an increase.

 

Section 25.            TAXES

 

25.1.        Taxes.  The Parties recognize that, as
of the Effective Date, the Services hereunder are not taxable under Article 28
of the New York State Sales and Use Tax Law and HP will not be collecting any
such taxes.

 

The Parties’ respective
responsibilities for taxes arising under or in connection with this Agreement
will be as follows:

 

(a)           SG Cowen shall be responsible for all
applicable taxes or other similar charges imposed by any governmental entity by
virtue of the Services performed under this Agreement, except for personal
property taxes, franchise taxes, corporate excise or corporate privilege,
property or license taxes, any tax based on HP’s net income or gross revenues.

 

(b)           HP will be responsible for any personal
property taxes on property it owns or leases, for franchise and privilege taxes
on its business, and for taxes based on its net income or gross receipts.

 

(c)           HP will be responsible for any sales, use,
excise, value-added, services, consumption, and other taxes and duties payable
by HP on any goods or services, that are used or consumed by HP in providing the
Services where the tax is imposed on HP’s acquisition or use of such goods or
services and the amount of tax is measured by HP’s costs in acquiring such
goods or services.

 

(d)           In the event that HP relocates an HP Service
Location at HP’s request and without the previous consent of SG Cowen, and as a
result a new or additional sales, use, excise, value added, services,
consumption, or other tax is assessed on the provision of any of the Services,
HP shall be responsible for the payment of such new or additional taxes to the
extent these new or additional taxes exceed the taxes applying to the Services
as applied to the previous HP service location.

 

(e)           The Parties agree to cooperate with each
other to enable each to more accurately determine its own tax liability and to
minimize such liability to the extent legally permissible and practical under
the circumstances.

 

(f)            HP will promptly notify SG Cowen of, and
coordinate with SG Cowen the response to and settlement of, any claim for taxes
asserted by applicable Governmental Authorities for which SG Cowen may be
responsible hereunder, it being understood that with respect to any claim
arising out of a form or return signed by a Party to this Agreement, such Party
will have the right to elect to control the response to and settlement of the
claim, but the

 

28

 

other Party will have the
right to participate in the response and settlement to the extent allowed by
assessed party.  Such participation shall
not be unreasonably withheld.

 

Section 26.            AUDITS

 

26.1.        Audits.  HP agrees that SG Cowen or its
designee may perform audits of HP’s performance of the Services, and accuracy
of charges related thereto, provided that such audits may only be conducted in
accordance with the following:

 

(a)           Audits will occur no more than once each
calendar year, unless more frequently required to meet regulatory requirements
or Law, or as requested by a Government Authority;

 

(b)           Audits may be conducted upon at least two (2)
weeks prior written notice (which requirement shall not apply to regulatory
audits or audits by any Government Authority if less notice is provided to SG
Cowen for such audit, provided SG Cowen provides prompt notice to HP).  SG Cowen will provide HP with reasonable
prior notice of the general scope of the audit and a list of personnel who will
conduct the audit;

 

(c)           HP shall not be responsible for a failure to
maintain the Service Levels to the extent caused by interference from audit
activities.  The parties will work
together in good faith to establish an audit process that does not interfere
with HP’s ability to maintain the Service Levels during the audit;

 

(d)           SG Cowen shall bear its own costs related to
an audit except as otherwise set forth in this Section 26 or as may be agreed
to in writing by HP;

 

(e)           HP agrees to provide SG Cowen with
information reasonably required to effect the audit; provided, however, that HP
reserves the right to impose reasonable limitations as may be necessary to
protect the Confidential Information of HP that may be accessed by SG Cowen as
a part of any such audit.  In no event
shall HP be required to provide SG Cowen with access to HP’s internal cost and
resource utilization data (except as necessary to validate performance of the
Services), or locations or data which are specific or dedicated to any other
customer of HP;

 

SG Cowen may designate a
third party to perform an audit, at SG Cowen’s expense, provided that such
third party auditor is not a direct competitor of HP and executes a
confidentiality agreement consistent with the confidentiality provisions
contained in this Agreement.

 

26.2.        Services.  Upon notice from SG Cowen, HP
and HP Agents shall provide such auditors and inspectors as SG Cowen or any
Governmental Authority may, from time to time, designate in writing with
reasonable access (i) during normal business days and hours to the HP
Service Locations and the Software and Equipment and (ii) any time to the
SG Cowen Service Locations, in each case for the purpose of performing audits
or inspections of the Services and the business of SG Cowen.  HP shall provide, and shall cause all HP
Agents to provide, such auditors and inspectors any assistance that they may
require, including an exit conference with such auditors or inspectors.  If any audit by an auditor or inspector
designated by SG Cowen or a Governmental Authority results in HP being notified
that it or HP Agents are not in compliance with (a) any generally accepted
accounting principle, or (b) any Law or any audit requirement relating to
the Services, HP shall, and shall cause HP Agents to, take actions

 

29

 

to immediately comply with
such audit.  HP shall bear the expense of
any such response that is (x) required by Law or other audit requirement
relating to HP’s business, (y) performed by HP as part of the Base
Services or (z) necessary due to HP’s noncompliance with any Law or audit
requirement imposed on HP.

 

26.3.        Fee Audit.  Upon reasonable notice from SG
Cowen, HP shall provide SG Cowen and SG Cowen’s Agents (including any third
party auditor(s) designated by SG Cowen), at HP’s expense, with access to such
financial records and supporting documentation (which records and documentation
shall be maintained on a consistent basis and substantially in accordance with
generally accepted accounting principles) as may be reasonably requested by SG
Cowen and SG Cowen may audit the Fees charged to SG Cowen to determine that
such Fees are accurate and in accordance with this Agreement.  If, as a result of such audit, SG Cowen
determines that HP has overcharged SG Cowen, SG Cowen shall notify HP of the
amount of such overcharge and HP shall promptly pay to SG Cowen the amount of
the overcharge plus interest at the rate of one percent (1%) per month, but in
no event to exceed the highest lawful rate of interest, calculated from the
date of receipt by HP of the overcharged amount until the date of payment to SG
Cowen.

 

26.4.        Record Retention.  As
part of the Base Services, HP shall (a) retain records and supporting
documentation (which records and documentation shall be maintained on a
consistent basis and substantially in accordance with generally accepted
accounting principles) (i) sufficient to document the Services and the Fees
paid or payable by SG Cowen under this Agreement, during the Term and for a
period of seven (7) years thereafter, and (ii) as necessary for HP to be in
compliance with the HP Regulatory Requirements, and (b) upon notice from
SG Cowen, provide SG Cowen and SG Cowen’s agents with reasonable access to such
records and documentation.

 

26.5.        Facilities.  HP shall provide to SG Cowen
and such of SG Cowen’s agents and auditors and inspectors as SG Cowen may
designate in writing, on HP’s premises (or if the audit is being performed of a
HP Agent, the HP Agent’s premises, if necessary), workspace, office furnishings
(including lockable cabinets), telephone and facsimile service, network access,
utilities and office related equipment and duplicating services as SG Cowen or
such auditors and inspectors may reasonably require to perform the audits
described in this Section 26.

 

Section 27.            CONFIDENTIALITY

 

27.1.        Confidential Information.

 

(a)           HP and SG Cowen each acknowledge that they
may be furnished with, receive, or otherwise have access to information of or
concerning the other Party which such Party considers to be confidential,
proprietary, a trade secret or otherwise restricted.  As used in this Agreement, “Confidential
Information” shall mean all information, in any form, furnished or made
available, directly or indirectly, by one Party to the other which is marked
confidential, restricted, proprietary, or with a similar designation, or which
a reasonably prudent business person would deem to be as confidential
information considering the nature of the information and the circumstances of
its disclosure.  The terms and conditions
of this Agreement shall be deemed Confidential Information.  Without limiting the foregoing, SG Cowen’s
Confidential Information also shall be deemed to include (whether or not marked
confidential, restricted, proprietary, or with a similar designation):
(i) all specifications, designs, documents,

 

30

 

correspondence, software,
documentation, data and other materials, (ii) any documents,
correspondence, documentation, data and other materials that a reasonably
prudent business person would deem as confidential considering the nature of
the information and circumstances of its disclosure; (iii) all information
concerning the operations, affairs and businesses of SG Cowen and any of its
Affiliates, the financial affairs of SG Cowen and any of its Affiliate, and the
relations of SG Cowen and any of its Affiliates with their customers, employees,
agents and service providers (including account information and information
regarding consumer markets); (iv) all SG Cowen Software and SG Cowen Data;
and (v) all other information or data stored on magnetic media or
otherwise or communicated orally or otherwise, and obtained, received,
transmitted, processed, stored, archived, or maintained by HP, HP Staff or HP
Agents under this Agreement.

 

(b)           Notwithstanding anything to the contrary in
this Agreement, including without limitation the exclusions from Confidential
Information set forth in Section 27.3 hereof, Confidential Information includes
“NPI”.  “NPI” has the meaning ascribed to
“nonpublic Personal Information” in Title V of the Gramm-Leach-Bliley Act of
1999 or any successor federal statute, and the rules and regulations
thereunder, as all may be amended and supplemented from time to time (“GLBA”).  HP shall, and shall cause HP Staff and HP
Agents to: (i) implement and maintain an appropriate security program for
NPI to (A) ensure the security and confidentiality of NPI, (B) protect
against any threats or hazards to the security or integrity of NPI, and
(C) prevent unauthorized access to or use of NPI, and (ii) otherwise
keep NPI confidential in accordance with the terms of this Agreement, GLBA and
any other applicable law, rule or regulation of any jurisdiction relating to
disclosure or use of personal information, provided that the requirements of
GLBA and other applicable laws, rules or regulations are made known to HP by SG
Cowen.  HP shall immediately notify SG
Cowen (i) of any disclosure or use of any NPI by HP, HP Staff or HP Agents
in breach of this Agreement, and (ii) of any disclosure of any NPI to HP,
HP Staff or HP Agents where the purpose of such disclosure is not known to HP.  SG Cowen reserves the right to review HP’s
policies and procedures used to maintain the security and confidentiality of
NPI.  At SG Cowen’s direction and in SG
Cowen’s sole discretion at any time, HP shall immediately return to SG Cowen
any or all NPI.  Upon termination or
expiration of this Agreement, HP shall immediately return to SG Cowen any and
all NPI which it has received under this Agreement and shall destroy records of
such NPI.

 

27.2.        Obligations.

 

(a)           Each Party’s Confidential Information shall
remain the property of that Party, except as expressly provided otherwise by
the other provisions of this Agreement. 
SG Cowen and HP shall each use at least the same degree of care, but in
any event no less than a reasonable degree of care, to prevent disclosing to third
parties the Confidential Information of the other Party, as such Party employs
to avoid unauthorized disclosure, publication or dissemination of its own
information of a similar nature and similar importance; provided that
(i) SG Cowen may disclose such information to entities performing services
for SG Cowen and/or SG Cowen Affiliates who require access to the Confidential
Information in the provision of Services to SG Cowen and/or SG Cowen
Affiliates, and (ii) HP may disclose such information to HP Agents
performing Services where (A) use of such entity is authorized under this
Agreement, (B) such disclosure is necessary to the performance of such
services, and (C) the entity to which the information is disclosed agrees
in writing to assume obligations of the same scope and at least as stringent as
those described in this Section 27.  Any
disclosure by SG Cowen or HP as described herein to such entity shall be
subject to such entity’s written agreement to comply with the disclosing party’s
confidentiality obligations consistent with those

 

31

 

provided herein, and the
disclosing party assuming full responsibility for any breach of its
confidentiality obligations caused by any such entity to which the Confidential
Information is disclosed.

 

(b)           Notwithstanding the foregoing
subsection (a) or any other provision of this Agreement, HP shall not
release SG Cowen’s Confidential Information to any third party without the
express prior written consent of SG Cowen.  SG Cowen’s Confidential Information shall not
be utilized or disclosed by HP for any purpose other than that of rendering the
Services under this Agreement.  HP shall
not possess or assert any ownership interest, lien or other right or interest
against or to SG Cowen’s Confidential Information.  HP shall ensure that none of SG Cowen’s
Confidential Information, or any part thereof, shall be sold, rented, assigned,
leased, or otherwise disposed of to third parties by HP, or commercially
exploited by or on behalf of HP, HP Staff or HP Agents.

 

(c)           As requested by SG Cowen during the Term, or
upon expiration or any termination of this Agreement (in whole or in part)
and/or completion of HP’s obligations under this Agreement, HP shall return or
destroy, as SG Cowen may direct, all material (including all copies and parts
thereof) in any medium that contains, refers to, or relates to SG Cowen’s
Confidential Information, and shall certify any such destruction in writing to
SG Cowen.

 

(d)           HP shall ensure that HP Staff and HP Agents
comply with the requirements of Section 27.2(c) above.

 

27.3.        Exclusions.  “Confidential Information”
shall not include any particular information which HP or SG Cowen can
demonstrate and document (a) was, at the time of disclosure to it, in the
public domain through no fault of the receiving Party and without any breach by
recipient of any obligation of confidentiality to the furnishing Party;
(b) after disclosure to it, is published or otherwise becomes part of the
public domain through no fault of the receiving Party and without any breach by
recipient of any obligation of confidentiality to the furnishing Party;
(c) was rightfully in the possession of the receiving Party at the time of
disclosure to it without any obligation to restrict its further use or
disclosure; (d) was received after disclosure to it from a third party who
had a lawful right to disclose such information to it without any obligation to
restrict its further use or disclosure and without any breach by such third
party of any obligation of confidentiality to the Party furnishing the
information hereunder; or (e) was independently developed by the receiving
Party without reference to Confidential Information of the furnishing
Party.  In addition, a Party shall not be
considered to have breached its obligations by disclosing Confidential
Information of the other Party as required to satisfy any legal requirement of
a Governmental Authority provided that, upon receiving any such request and to
the extent that it may do so without violating any Law, such Party advises the
other Party of such request immediately and prior to making such disclosure in
order that the other Party may interpose an objection to such disclosure, take
action to assure confidential handling of the Confidential Information, or take
such other action as it deems appropriate to protect the Confidential
Information; and further provided that the first Party shall cooperate with
such Party in the foregoing.

 

27.4.        Loss of Confidential Information.  In
the event of any disclosure or loss of, or inability to account for, any
Confidential Information of the furnishing Party, upon becoming aware of such
event the receiving Party shall promptly, at its own expense: (a) notify the
furnishing Party in writing; (b) take such actions as may be necessary or
reasonably requested by the furnishing Party, and otherwise cooperate with the
furnishing Party, to minimize the

 

32

 

adverse effects to the
furnishing Party of such event and any damage resulting from such event.

 

27.5.        Injunctive Relief.  Each
Party acknowledges that the other believes that its Confidential Information is
unique property of extreme value to the other Party, and the unauthorized use
or disclosure thereof could cause the other Party irreparable harm that could
not be compensated by monetary damages. 
Accordingly, each Party agrees that the other will be entitled to seek,
from any court of competent jurisdiction, injunctive and preliminary relief to
remedy any actual or threatened unauthorized use or disclosure of the other
Party’s Confidential Information.

 

27.6.        Time Limitation.  Each
Party’s confidentiality obligations under Section 27 shall remain in full force
and effect throughout the Term and shall continue for a period of five (5)
years after the end of the Term; provided, however, that HP’s confidentiality
obligations under Section 27 with respect to NPI and financial information of
or relating to SG Cowen shall not be subject to any time limitation and shall
survive any termination of expiration of this Agreement in perpetuity.

 

Section 28.            REPRESENTATIONS AND WARRANTIES

 

28.1.        By HP.

 

(a)           Claims.  HP represents and warrants
that there are no pending or threatened claims against it that might have a
material adverse effect on its ability to meet its obligations under this
Agreement.

 

(b)           Work Standards.  HP
represents and warrants that the Services will be rendered with promptness,
efficiency and diligence and will be executed in a workmanlike manner, and that
all HP Staff shall have suitable training, education experience and skill in
order to properly perform the Services. 
In the event that any Services are performed by HP hereunder and such
performance does not comply with the terms and conditions of this Agreement,
during the Term and for the period of one (1) year thereafter, HP shall repeat
its performance of such Services in accordance with the terms and conditions of
this Agreement at no charge to SG Cowen.

 

(c)           Non-Infringement.  As
of the Effective Date, HP represents and warrants that to the best of its
knowledge, the HP Software, HP Tools and HP Equipment do not infringe, or
constitute an infringement or misappropriation of, any patent, copyright,
trademark, trade secret, license or other intellectual property or other
proprietary rights of any third party, and that there are no actual or
threatened claims of any of the foregoing.

 

(d)           No Open Source.  HP
represents and warrants that HP has taken all appropriate steps to ensure that
HP, HP Staff and HP Agents will not use, and will prevent the introduction of,
any open source software into any of SG Cowen’s Systems to or for which HP has
access or control or the Managed Equipment without the prior written consent of
SG Cowen’s CIO.

 

(e)           Compliance With Laws and Regulations.  HP
represents and warrants that it will perform its obligations in a manner that
complies with all Laws relating to HP’s business or HP’s performance or
delivery of the Services, including identifying and procuring required permits,
certificates, approvals and inspections and complying with all audit

 

33

 

requirements hereunder.  If a charge of non-compliance with such Laws
occurs, HP will promptly notify SG Cowen of such charge in writing.

 

(f)            Viruses.  HP represents and warrants
that it will use commercially reasonable efforts to ensure that no Viruses are
coded or introduced into the Systems used to provide the Services into SG Cowen’s
systems to or for which HP has access or control or the Equipment, or into any
Deliverables delivered by HP in the performance of the Services hereunder.  HP agrees that, in the event a Virus is found
to have been introduced into the Systems used to provide the Services, or into
SG Cowen’s systems or the Equipment, or is found in any such materials, (i) HP
shall promptly notify SG Cowen, and (ii) HP shall, at SG Cowen’s request,
promptly assist SG Cowen in reducing the effects of the Virus and, if the Virus
causes an interruption of the Services, a loss of operational efficiency or
loss of data, assist SG Cowen to the same extent to mitigate and restore such
losses, which all shall be at no additional charge to SG Cowen if the Virus was
intentionally introduced by any HP Staff, or if due to HP’s failure to use
commercially reasonable efforts to prevent the Virus introduction.  If the Virus is found to have been introduced
into SG Cowen’s systems or the Equipment by virtue of HP’s breach of the
representation or warranty set forth in the first sentence of this Section
28.1(f), HP will indemnify SG Cowen for all Losses incurred as a result of such
breach.

 

(g)           Disabling Code.  HP
represents and warrants that, without the prior written consent of SG Cowen, HP
will not, at any time, invoke any code which would have the effect of disabling
or otherwise shutting down all or any portion of the Services.  This representation and warranty shall not
apply to SG Cowen Software.  If HP
breaches the foregoing representation and warranty, HP will indemnify SG Cowen
for Losses incurred as a result of such breach.

 

28.2.        Mutual Representations and Warranties.

 

(a)           Authorization.  Each
Party represents and warrants that:

 

(i)            it has the requisite power and authority to
enter into this Agreement and to carry out the transactions and perform its
obligations as contemplated by this Agreement; and

 

(ii)           the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated by this
Agreement have been duly authorized by the requisite action on the part of such
Party.

 

(b)           No Violation.  Each
Party represents and warrants that its execution, delivery, and performance of
this Agreement will not constitute (i) a violation of any judgment, order, or
decree; (ii) a material default under any material contract by which it or any
of its material assets are bound; or (iii) an event that would, with notice or
lapse of time, or both, constitute such a default as described in foregoing
subsection (ii).

 

28.3.        Disclaimer of Warranties. 
OTHER THAN THE WARRANTIES OF THE PARTIES SET FORTH IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR TITLE.

 

34

 

Section 29.            DISPUTE RESOLUTION

 

29.1.        Dispute Resolution Procedure.  HP
and SG Cowen agree that with respect to any dispute or controversy arising out
of or in connection with this Agreement or the performance of Services
hereunder, the Parties shall first attempt to resolve their disputes in the
manner described in this Section 29.

 

29.2.        Escalation of Dispute.

 

(a)           Account Managers.  All
disputes arising under or relating to this Agreement shall be referred to the
Account Managers.  If the Account
Managers are unable to resolve the dispute within five (5) business days after
referral of the matter to them, the Parties shall submit the dispute to the
Steering Committee.

 

(b)           Steering Committee/Escalation.  Any
decision by the Steering Committee to resolve a dispute must be made with the
affirmative vote of at least one representative of each Party, which, in the
case of SG Cowen, must include the CIO of SG Cowen.  In the event the Steering Committee is unable
to resolve a dispute within ten (10) business days of the date of the meeting
during which such dispute was considered, the Parties shall submit the dispute
to the senior management of each party for resolution.  In the event senior management of the Parties
is unable to resolve the dispute within five (5) business days of the date such
dispute was submitted to senior management for consideration, then either Party
may submit the dispute to a court of competent jurisdiction.

 

29.3.        Injunctive Relief. 
Notwithstanding anything else herein to the contrary, either party may,
without following the dispute resolution procedures in this Section 29, seek
immediate injunctive relief for any breach or impending breach of this
Agreement by the other party for which a temporary restraining order or other injunctive
relief is an appropriate remedy, including, without limitation, any breach of a
Party’s confidentiality obligations hereunder.

 

29.4.        Continuity of Base Services.  In
the event of a dispute between SG Cowen and HP, SG Cowen and HP shall continue to
perform their obligations under this Agreement in good faith during the
resolution of such dispute, as if such dispute had not arisen, unless and until
this Agreement is terminated in accordance with the provisions hereof.

 

29.5.        Additional Dispute Resolution Terms.

 

(a)           HP and SG Cowen agree that written or oral
statements or offers of settlement made in the course of the dispute resolution
process set forth in this Section will (i) be Confidential Information,
(ii) will not be offered into evidence, disclosed, or used for any purpose
in any formal proceeding, and (iii) will not constitute an admission or
waiver of rights.

 

(b)           HP and SG Cowen will promptly return to the
other, upon request, any such written statements or offers of settlement,
including all copies thereof.

 

Section 30.            TERMINATION BY SG COWEN

 

30.1.        Termination for Cause.

 

(a)           In the event that HP:

 

35

 

(i)            commits a material breach of this Agreement,
which breach is not cured within thirty (30) days from the date HP receives
written notice of such material breach or such longer period as mutually agreed
by the Parties in writing; or

 

(ii)           commits a material breach which, in either
case, is not capable of being cured within thirty (30) days from the date that
HP receives written notice of such breach;

 

(iii)

 

then SG Cowen may, by giving
written notice to HP, immediately terminate this Agreement, in whole or in
part, as of a date specified in the notice of termination.  For avoidance of doubt, SG Cowen’s
termination rights in Section 12.6(d) are in addition to and shall not limit SG
Cowen’s termination rights under Sections 30.1(a)(i) and (ii) with respect to
any Service Level failure(s).  If SG
Cowen chooses to terminate this Agreement in part, the Fees payable under this
Agreement will be equitably adjusted to reflect those Services that are
terminated.

 

With respect to any
termination pursuant to this Section 30.1, in addition to and without
limitation of HP’s obligations (including efforts to cure any breach), HP
acknowledges and agrees that it has an affirmative obligation to mitigate
damages which may be incurred by SG Cowen.

 

30.2.        Termination for Convenience.  SG
Cowen shall have the right to terminate this Agreement for convenience at any
time, with an effective date of termination on or after the first anniversary
of the Transition Completion Date, by providing at least ninety (90) days
notice to HP, and paying to HP the Termination Charges described in the next
sentence.  The Termination Charges shall
be calculated as (i) HP’s Unamortized Start-Up Costs calculated in accordance
with the formula set forth in Section 32.1(g) below, plus (ii) the sum of Five
Hundred Thousand Dollars ($500,000).

 

HP shall invoice the
Termination Charges upon the effective date of termination, and such charges shall be due and payable
in accordance with Section 24 of this Agreement.  Upon receipt of the Termination Charges, SG
Cowen shall own the Equipment specified in Section 32.1(g) and HP shall promptly
transfer title and ownership of the Equipment to SG Cowen at no additional
cost, free and clear of all liens and encumbrances, and in good-working
order.  The Parties agree to sign all
documents required to give effect to such transfer.

 

For avoidance of doubt, the
Termination Charges include all charges, taxes and fees SG Cowen is required to
pay to HP if it elects to exercise its right to terminate this Agreement for
convenience.

 

30.3.        Termination for Violation of Laws.  If
HP or any of its Affiliates, officers or controlling owners shall become the
subject of any investigation by any governmental authority for violation of any
law or regulation or shall commit any act that SG Cowen believes would reflect
badly on the standing of SG Cowen or cause negative media attention on SG Cowen
or its employees via acts or omissions arising from HP activities, whether or
not related to Services to be performed under this Agreement, SG Cowen may
terminate this Agreement, in whole or in part, by giving HP at least thirty (30)
days prior written notice.

 

30.4.        Termination for Bankruptcy.  If:
(a) HP files a Chapter 7 petition in bankruptcy; (b) HP has an involuntary
Chapter 7 bankruptcy petition filed against it which is either not converted

 

36

 

to a petition or case under
Chapter 11 of the Bankruptcy Code within ninety (90) days after the
commencement of such proceeding or not challenged by HP within the time periods
set forth in Rule 1011 of the Federal Rules of Bankruptcy Procedure and
dismissed within ninety (90) days after the commencement of such proceeding;
(c) HP voluntarily avails itself of any liquidation proceeding under any
statute of any state or country relating to insolvency or the protection of the
rights of creditors in general; (d) HP is subject on an involuntarily basis to
any liquidation proceeding under any statute of any state or country relating
to insolvency or the protection of the rights of creditors in general, and such
proceeding either is not converted to any reorganization proceeding within
ninety (90) days after the commencement of such proceeding, or is not
challenged by HP with the time period fixed by applicable law to respond to the
commencement of such proceeding and dismissed within ninety (90) days of the
commencement of such proceeding; (e) HP becomes insolvent on both a balance
sheet and an equitable insolvency basis; (f) HP makes a general assignment for
the benefit of its creditors; (g) HP admits in writing its inability to pay its
debts as they mature; (h) HP has a receiver appointed for its assets; (i) HP
ceases conducting business in its normal course; or (j) HP has any significant
portion of its assets attached, then SG Cowen shall have the right to terminate
this Agreement as of the date specified in the notice of termination, upon at
least five (5) days prior written notice.

 

30.5.        Termination for Force Majeure.  In
the event (a) a material portion of the Services or the performance of the
Services is delayed or interrupted because of a Force Majeure condition as
described in Section 36.4 for more than thirty (30) days and HP cannot provide
a temporary alternative reasonably acceptable to SG Cowen, or (b) HP fails to
implement disaster recovery procedures after a Force Majeure Event or disaster
within the time frame set forth in Section 22.1, then SG Cowen may, at its
discretion (i) terminate the affected portion of the Services without liability
and at SG Cowen’s option, seek an alternative, or (ii) contract with a third
party for substitute services and suspend HP’s performance of such portion of
the Services for the duration of such contract. 
In either case, SG Cowen will promptly receive an equitable adjustment
in Fees hereunder.

 

30.6.        Termination for SLA Failure. 
Without limiting SG Cowen’s other termination rights, SG Cowen may
additionally terminate this Agreement pursuant to Section 12.6(d).

 

30.7.        Cumulative Remedies.  SG
Cowen’s termination of this Agreement, and any adjustment of fees or charges or
any other remedy in connection with any such termination, shall be without
prejudice to any other right or remedy that SG Cowen may have hereunder, or at
law or in equity, and shall not relieve HP of breaches occurring prior to the
effective date of such termination.

 

30.8.        Adjustment.  In the event of any partial
termination by SG Cowen, as provided in this Agreement, the charges payable
under this Agreement for Services will be equitably adjusted to reflect those
services that are terminated.

 

30.9.        Permitted Solicitation Following Termination.  Upon
the expiration or termination of this Agreement, SG Cowen and/or any of its
Affiliates may offer employment to and/or employ any HP employee who is
assigned to SG Cowen’s account on the effective date of such expiration or
termination to provide Services on-site at the SG Cowen Service Locations
and/or who was previously a SG Cowen employee who subsequently became a HP
employee to provide Services on-site at SG Cowen Service Locations, whether or
not such individuals at that time continue to provide Services to SG
Cowen.  HP shall not develop or enforce
employment

 

37

 

contracts, or to take any
similar action, that would prevent SG Cowen from employing or offering
employment to any such HP employee.  HP
agrees that neither any such offer nor any such employment by SG Cowen and/or
any of its Affiliates shall constitute a tortious act or breach of contract by
SG Cowen or any individual receiving or accepting any such offer of employment,
notwithstanding any other provision of this Agreement or any other agreement
now in effect or subsequently executed by HP and such HP Employee.  Notwithstanding any provision of this
Agreement to the contrary, the foregoing sentence shall survive the expiration or
termination of this Master Agreement for a period of one hundred
eighty (180) days after any expiration or termination of this Agreement.

 

Section 31.            TERMINATION BY HP

 

31.1.        Termination for Failure to Pay.  HP
shall have the right to terminate this Agreement solely (i) as set forth in
Section 31.2, or (ii) in the event of a failure by SG Cowen to make timely
payment of any material Fees due and payable under this Agreement and not
subject to good faith dispute by SG Cowen, which breach is not cured within
ninety (90) days of SG Cowen’s receipt of written notice thereof; provided,
however, that this termination right is conditioned on HP having provided SG
Cowen with a prior written notice of such failure to pay such undisputed
amounts seventy-five (75) days after the date of the initial written notice to
SG Cowen, which said notice must be addressed to SG Cowen’s Deputy General
Counsel and SG Cowen’s CAO and be delivered by overnight courier or
hand-delivered, and otherwise clearly and conspicuously indicate that it is a
notice of termination of this Agreement and the amounts due to cure any such
breach.

 

31.2.        Termination for Bankruptcy.  If:
(a) SG Cowen files a Chapter 7 petition in bankruptcy; (b) SG Cowen has an
involuntary Chapter 7 bankruptcy petition filed against it which is either not
converted to a petition or case under Chapter 11 of the Bankruptcy Code within
ninety (90) days after the commencement of such proceeding or not challenged by
SG Cowen within the time periods set forth in Rule 1011 of the Federal Rules of
Bankruptcy Procedure and dismissed within ninety (90) days after the
commencement of such proceeding; (c) SG Cowen voluntarily avails itself of any
liquidation proceeding under any statute of any state or country relating to
insolvency or the protection of the rights of creditors in general; (d) SG
Cowen is subject on an involuntarily basis to any liquidation proceeding under
any statute of any state or country relating to insolvency or the protection of
the rights of creditors in general, and such proceeding either is not converted
to any reorganization proceeding within ninety (90) days after the commencement
of such proceeding, or is not challenged by SG Cowen with the time period fixed
by applicable law to respond to the commencement of such proceeding and
dismissed within ninety (90) days of the commencement of such proceeding; (e)
SG Cowen becomes insolvent on both a balance sheet and an equitable insolvency
basis; (f) SG Cowen makes a general assignment for the benefit of its creditors;
(g) SG Cowen admits in writing its inability to pay its debts as they mature;
(h) SG Cowen has a receiver appointed for its assets; (i) SG Cowen ceases
conducting business in its normal course; or (j) SG Cowen has any significant
portion of its assets attached, then HP shall have the right to terminate this
Agreement as of the date specified in the notice of termination, upon at least
five (5) days prior written notice.

 

31.3.        No Other Grounds for Termination.  Due
to the impact any termination of this Agreement would have on SG Cowen’s
business, SG Cowen’s failure to perform its responsibilities set forth in this
Agreement (other than as provided in this Section 31) shall not

 

38

 

be deemed to be grounds for
termination by HP.  HP ACKNOWLEDGES THAT
SG COWEN WOULD NOT BE WILLING TO ENTER INTO THIS AGREEMENT WITHOUT ASSURANCE
THAT IT MAY NOT BE TERMINATED BY HP AND THAT HP MAY NOT SUSPEND PERFORMANCE
EXCEPT, AND ONLY TO THE EXTENT, HP TERMINATES PURSUANT TO THIS SECTION 31.

 

Section 32.            TERMINATION/EXPIRATION ASSISTANCE

 

32.1.        Termination/Expiration Assistance.  At
SG Cowen’s request, commencing six (6) months prior to expiration of this
Agreement, or on such earlier date as SG Cowen may request, or commencing upon
any notice of termination by either Party (in whole or in part) or of
non-renewal of this Agreement (including notice based upon default by SG
Cowen), and continuing through the Termination/Expiration Assistance Period, HP
will provide to SG Cowen, or at SG Cowen’s request to SG Cowen or SG Cowen’s
designee(s), the termination/expiration assistance requested by SG Cowen to
allow the Services to continue without interruption or adverse effect and to
facilitate the orderly transfer of the Services to SG Cowen or its designee(s)
(such assistance, “Termination/Expiration Assistance”).  HP acknowledges and agrees that the
Termination/Expiration Assistance will be provided in accordance with this
Section 32 even in the event that HP has terminated this Agreement for cause,
provided that in such event SG Cowen pays HP in advance on a monthly basis for
such Services.  Any
Termination/Expiration Assistance that is provided in accordance with the
foregoing will be provided during the Term at no additional cost.  The charges for Termination/Expiration
Assistance provided by HP after termination or expiration of this Agreement,
shall be billed to SG Cowen at the rates set forth in Schedule C.  The quality and level of the Services shall
not be degraded during the Termination/Expiration Assistance Period, and all
such Termination/Expiration Assistance shall be provided in accordance with the
terms and conditions governing HP’s provision of the Services hereunder.  Termination/Expiration Assistance will
include the following:

 

(a)           Within fifteen (15) days after the
commencement of Termination/Expiration Assistance, HP will provide a complete
plan for operational turnover that enables a smooth transition of the functions
performed by HP under this Agreement to SG Cowen or its designee(s) (such plan,
the “Turnover Plan”).  The Turnover Plan
will be provided to SG Cowen in both hardcopy and in an electronic format
capable of being utilized by SG Cowen, and shall be deemed SG Cowen’s
Confidential Information.  Upon SG Cowen’s
approval of the Turnover Plan, HP will provide all further
Termination/Expiration Assistance in accordance with such Turnover Plan.  Provision of Termination/Expiration
Assistance will not be complete until SG Cowen’s Account Manager agrees that
all tasks and Deliverables set forth in the Turnover Plan have been completed
and delivered.

 

(b)           HP will attend periodic review meetings
called by SG Cowen, during which the Parties at a minimum will review HP’s
performance of Termination/Expiration Assistance, including the completion and
delivery of tasks and Deliverables set forth in the Turnover Plan.

 

(c)           For all Termination/Expiration Assistance, HP
will provide sufficient personnel with current knowledge of the Services to
work with the appropriate staff of SG Cowen and, if applicable, SG Cowen’s
designee(s), to provide the Termination/Expiration Assistance and to define the
information for conversion in a manner consistent with the Turnover Plan.

 

39

 

(d)           HP will provide a detailed written
description of all Services performed by HP, including a description of
(i) HP’s structure/organization used to provide the Services, (ii) a
complete listing of all support and development tools used in performing the Services,
and (iii) HP Staff job descriptions and experience levels.

 

(e)           Upon the latter of the expiration or
termination of this Agreement and the last day of the Termination/Expiration
Period, the rights granted to HP in Section 19.1 shall immediately terminate
and HP shall (i) deliver to SG Cowen, at no cost to SG Cowen, a current copy of
all of the SG Cowen Software in the form in use as of that time and (b) destroy
or erase all other copies of the SG Cowen Software in HP’s care, custody or
control, and cause all HP Agents to destroy or erase all copies of the SG Cowen
Software in their respective care, custody or control.

 

(f)            Upon the latter of the expiration or
termination of this Agreement and the last day of the Termination/Expiration
Period, at SG Cowen’s request, with respect to any third party contracts
exclusively applicable to services being provided to SG Cowen for maintenance,
disaster recovery, and other third party services being used by HP to perform
the Services as of that time, HP shall, to the extent permitted by the third
party contracts, transfer or assign such contracts to SG Cowen or its
designee(s), on terms and conditions acceptable to SG Cowen and HP.  HP shall be responsible for the payment of
any transfer fee or non-recurring charge imposed by the applicable third party
service providers.

 

(g)           In the event of expiration of this Agreement,
upon the latter of the expiration of this Agreement and the last day of the
Termination/Expiration Period, HP shall promptly transfer title and ownership
of the Equipment set forth in Exhibit K to the SOW to SG Cowen at no additional
cost (including taxes), free and clear of all liens and encumbrances, and in
good-working order.  In the event of any
termination of this Agreement by either party prior to the date of expiration
hereof, if SG Cowen elects, in its sole discretion, HP shall transfer title and
ownership of the Equipment set forth in Exhibit K to the SOW to SG Cowen, free and clear of all liens
and encumbrances, and in good-working order, for a transfer fee equal to HP’s Unamortized Start-Up Costs as
calculated below.

 

HP’s Unamortized Start-Up
Costs shall be calculated as:

 

$2,000,000  x  N

60

 

where N = the number of
months remaining in the Initial Term after the effective date of termination.

 

(h)           For avoidance of doubt, such HP’s Unamortized
Start-Up Costs include all charges, taxes and fees SG Cowen is required to pay
to HP if SG Cowen makes such election. 
The Parties agree to sign all documents required to give effect to any
transfer of the Equipment under this Section.

 

(i)            HP will provide SG Cowen with all
documentation, policies, procedures and tools used to provide the Services to
the extent that SG Cowen has rights to use such items as set forth in this
Agreement.

 

40

 

Section 33.            LIMITATION OF LIABILITY

 

33.1.        NO CONSEQUENTIAL DAMAGES.  IN
NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY HEREUNDER FOR (i)
INDIRECT, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR SPECIAL DAMAGES
(ii) DAMAGES RELATED TO LOSS OF DATA (EXCEPT FOR HP’S OBLIGATIONS WITH
RESPECT TO LOSS OF DATA SET FORTH ELSEWHERE IN THIS AGREEMENT, AND EXCEPT IN
THOSE INSTANCES WHERE THE DATA IS LOST DUE TO HP’S FAILURE TO PERFORM BACKUPS
AS SPECIFIED IN THE SOW, OR (iii) LOSS OF PROFIT, SAVINGS OR REVENUE.  EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES IN ADVANCE.

 

33.2.        DIRECT DAMAGES.  IN
NO EVENT SHALL SG COWEN’S AGGREGATE LIABILITY TO HP ARISING OUT OF OR RELATING
TO THIS AGREEMENT EXCEED THE AMOUNTS DUE AND OWING TO HP UNDER THIS
AGREEMENT.  IN NO EVENT SHALL HP’S
AGGREGATE LIABILITY TO SG COWEN ARISING OUT OF OR RELATING TO THIS AGREEMENT
EXCEED THE AMOUNT ACTUALLY PAID BY SG COWEN TO HP FOR THE SERVICES UNDER THIS
AGREEMENT DURING THE TWENTY-FOUR (24) MONTHS PRIOR TO THE FIRST EVENT WHICH IS
THE SUBJECT OF THE FIRST CLAIM OR CAUSE OF ACTION HEREUNDER; PROVIDED THAT
WHERE LESS THAN TWENTY-FOUR (24) MONTHS OF THE TERM HAVE ELAPSED AT THE TIME OF
THE FIRST EVENT WHICH IS THE SUBJECT OF THE FIRST CLAIM OR CAUSE OF ACTION
HEREUNDER, HP’S AGGREGATE LIABILITY TO SG COWEN ARISING OUT OF OR RELATED TO
THIS AGREEMENT SHALL NOT EXCEED THE MONTHLY AVERAGE OF FEES FOR ALL MONTHS
PRIOR TO THE ACCRUAL OF THE FIRST SUCH ACTION OR CLAIM MULTIPLIED BY TWENTY-FOUR
(24).

 

33.3.        EXCLUSIONS.  THE LIMITATIONS SET FORTH IN
SECTIONS 33.1 AND 33.2 SHALL NOT APPLY TO: 
(A) A PARTY’S INDEMNIFICATION OBLIGATIONS; (B) DAMAGES OCCASIONED
BY A BREACH OF A PARTY’S CONFIDENTIALITY OBLIGATIONS; (C) DAMAGES OCCASIONED BY
A PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT; (D) DAMAGES OCCASIONED
BY THE IMPROPER OR WRONGFUL TERMINATION OF THIS AGREEMENT OR ABANDONMENT OF
THIS AGREEMENT BY HP; (E) FINES, PENALTIES AND SIMILAR FINANCIAL OBLIGATIONS
LEVIED TO THE EXTENT CAUSED BY A PARTY’S FAILURE TO COMPLY WITH APPLICABLE LAWS
(AS DEFINED HEREIN); AND (F) DAMAGES INCURRED BY A PARTY ARISING FROM, IN
CONNECTION WITH, OR BASED UPON (i) DEATH OR BODILY INJURY, OR (ii) DAMAGE, LOSS
OR DESTRUCTION OF ANY REAL OR TANGIBLE PERSONAL PROPERTY, TO THE EXTENT (i) OR
(ii) ARE CAUSED BY THE FAULT OR NEGLIGENCE OF THE OTHER PARTY, ITS EMPLOYEES,
AGENTS OR CONTRACTORS; PROVIDED, HOWEVER, THAT THIS ITEM (F)
SHALL NOT APPLY TO THIRD PARTY CLAIMS (WHICH ARE COVERED BY A PARTY’S
INDEMNIFICATION OBLIGATIONS IN SECTION 34.4 HEREOF), AND THAT FOR DAMAGES UNDER
ITEM (F)(ii), A PARTY’S MAXIMUM LIABILITY FOR SUCH DAMAGES TO THE OTHER PARTY
SHALL NOT EXCEED TWENTY FIVE MILLION DOLLARS ($25,000,000) IN THE AGGREGATE; PROVIDED,
FURTHER, THAT THIS SHALL NOT PRECLUDE SG COWEN FROM RECOVERING ANY OTHER
DAMAGES ARISING FROM, IN CONNECTION WITH, OR BASED UPON SUCH EVENTS, SUBJECT TO
THE REMAINDER OF THIS SECTION 33.

 

33.4.        Direct Damages. 
Notwithstanding any other provision of this Agreement, the

 

41

 

following shall be
considered direct damages and shall not be considered to be consequential
damages, to the extent they result from a Party’s failure to fulfill its
obligations in accordance with this Agreement:

 

(a)           costs of restoring, reloading, and (if
necessary) recreating any of SG Cowen’s information lost or damaged (including
journals and logs), in the event that HP fails to make backups as required
under the Agreement (including failure to accurately or completely make such
backups) or fails to maintain and store such backups;

 

(b)           costs of implementing a workaround in respect
of a failure to provide the Services;

 

(c)           costs of replacing lost or damaged equipment,
software and materials;

 

(d)           costs and expenses incurred by SG Cowen to
procure the Services from an alternate source; and

 

(e)           incremental compensation incurred by SG Cowen
or its Affiliates for full-time and temporary personnel, and any required
travel expenses, telecommunication charges, and similar charges, reasonably
incurred by SG Cowen in mitigating the effects of the failure of HP to provide
the Services (including Termination/Expiration Assistance) or incurred in
connection with (a) through (d) above.

 

(f)            The foregoing shall not preclude either Party
from proving other direct damages.

 

Section 34.            INDEMNIFICATION

 

34.1.        Indemnity by HP.  HP
agrees to indemnify, defend and hold harmless SG Cowen and its Affiliates, and
their respective officers, directors, employees, agents, successors, and
assigns, from all Losses and threatened Losses arising from, in connection
with, or based on allegations of, any of the following:

 

(a)           any claim for payment of compensation
(including benefits) or salary asserted by any HP Staff associated with a
determination by any Governmental Authority or any other applicable entity that
the personnel provided by HP are employees of SG Cowen for any purpose;

 

(b)           any claim, demand, charge, action, cause of
action, or other proceeding asserted against SG Cowen but resulting from HP’s
withholding or failure to withhold taxes with respect to HP Staff;

 

(c)           any liability for premiums, contributions, or
taxes payable under any workers’ compensation, unemployment compensation,
disability benefit, old age benefit, or tax withholding or failure to withhold
for which SG Cowen may be adjudged liable as an employer with respect to any HP
Staff;

 

(d)           any claim or action by HP’s subcontractors
arising out of HP’s breach or violation of HP’s subcontracting arrangements;

 

42

 

(e)           any claim alleging a violation by HP or act
or omission of HP arising out of or relating to:

 

(i)            any Law for the protection of persons or
members of a protected class or category of persons,

 

(ii)            sexual discrimination or harassment,

 

(iii)          any other aspect of the employment
relationship between or among HP, its employees, HP Agents, or the termination
of such relationship (including claims for breach of a contract of employment);

 

(iv)

 

(f)            any breach by HP, HP Staff or HP Agents of
the co-location terms and conditions referred to in Section 4.10 above; or

 

(g)           any breach by HP, HP Staff, HP Agents or any
third party to whom HP provides access to SAVVIS’ network or SAVVIS’ services,
of the acceptable use terms and conditions referred to in Section 4.11 above
(which, for avoidance of doubt, includes both inter-party and third party
claims).

 

34.2.        Intellectual Property Indemnity by HP.  HP
agrees to defend or settle, and indemnify and hold harmless, SG Cowen and its
Affiliates, and their respective officers, directors, employees, agents,
successors, and assigns, from (i) all defense costs and expenses
(including reasonable attorneys’ fees), settlement amounts, court awarded
damages and costs, and (ii) all other Losses and threatened Losses (all
Losses in this item (ii) being subject to HP’s limitation of liability in
Section 33 hereof) arising from, in connection with, or based upon any claims
that (i) the Services, Deliverables or HP Materials, or use thereof by SG
Cowen or Affiliates, or (ii) performance of the Services by HP or HP
Agents, infringes or violates any patent, copyright, trademark, trade secret,
license or other proprietary rights.  If
any Service or item used by HP to provide the Services, Deliverables, HP Materials
or other materials prepared by or on behalf of HP in the performance of the
Services hereunder becomes, or is likely to become, the subject of an
infringement or misappropriation claim or proceeding, HP will, in addition to
indemnifying SG Cowen as provided in this Section 34, promptly at HP’s expense
take the following actions at no additional charge to SG Cowen:

 

(a)           secure the right for SG Cowen and Affiliates
to continue using the item, Service, or material,

 

(b)           if the remedy provided for in foregoing
subsection (a) is not available to HP, replace or modify the item, Service, or
material, to make it non-infringing, provided that any such replacement or
modification will not degrade the performance or quality of the item, Service,
or materials or HP’s performance under this Agreement, or

 

(c)           if neither of the remedies provided for in
subsections (a) or (b) can be accomplished by HP, HP shall refund to SG
Cowen all fees and charges incurred by SG Cowen relating to the infringing
items or Services, and remove such items from the Services, in which event HP’s
charges herein shall be equitably adjusted to reflect such removal.  If such removal of Services would result in
this Agreement no longer providing the benefits and value SG

 

43

 

Cowen anticipated upon
entering into the Agreement, in addition to any other rights or remedies of SG
Cowen under this Agreement, at law or in equity, SG Cowen shall have the right
to terminate this Agreement for breach (without cure rights) pursuant to
Section 30.1.

 

HP has no obligation for any
claim of infringement under this Section arising from the authorized use by HP
of the SG Cowen Software or SG Cowen Data, or arising solely based upon HP’s
compliance with SG Cowen’s detailed specifications and designs.

 

This Section sets forth HP’s
sole obligations and SG Cowen’s sole remedies for any intellectual property
infringement covered by HP’s indemnification obligation in this Section (except
that this restriction shall not apply if SG Cowen elects to terminate this
Agreement as described in Section 34.2(c) above).

 

34.3.        Intellectual Property Indemnity by SG Cowen.  SG
Cowen agrees to defend or settle, and indemnify and hold harmless HP and its
officers, directors, employees, agents, successors, and assigns, from
(i) all defense costs (including reasonable attorneys’ fees), settlement
amounts, court awarded damages and costs, and (ii) all other Losses and
threatened Losses (with the understanding that SG Cowen’s obligations under
this Section with respect to Losses under this item (ii) only shall be
subject to SG Cowen’s limitation of liability in Section 33 hereof) arising
from, in connection with, or based on any claims that the Managed Equipment or
SG Cowen Software, or use thereof by HP as authorized under this Agreement,
infringes or violates any patent, copyright, trademark, trade secret, license
or other proprietary rights.

 

If the Managed Equipment or
SG Cowen Software becomes, or is likely to become, the subject of an
infringement or misappropriation claim or proceeding, SG Cowen will, in
addition to indemnifying HP as provided in this Section 34 and to the other
rights or remedies HP may have available to it under this Agreement, promptly
at SG Cowen’s expense take the following actions at no additional charge to HP:

 

(a)           secure the right for HP to continue using the
Managed Equipment or SG Cowen Software,

 

(b)           if the remedy provided for in foregoing
subsection (a) is not available to SG Cowen, replace or modify the Managed
Equipment or SG Cowen Software to make it non-infringing, provided that any
such replacement or modification will not degrade the performance or quality of
the Managed Equipment or SG Cowen Software, or

 

(c)           if neither of the remedies provided for in
subsection (a) or (b) can be accomplished by SG Cowen, SG Cowen shall have
the right to remove the affected Services from the Agreement, in which event HP’s
charges hereunder shall be equitably adjusted to reflect such removal.

 

This Section sets forth SG
Cowen’s sole obligations and HP’s sole remedies for any intellectual property
infringement covered by SG Cowen’s indemnification obligations in this Section.

 

34.4.        Personal Injury and Property Damage Indemnity.  Each
Party (the “Indemnifying Party”) shall indemnify, defend and hold the other
party harmless from and against all Losses and threatened Losses arising from,
in connection with, or based upon any claim or action by a third party alleging
(i) death or bodily injury, or (ii) damage, loss or destruction of
any real or tangible personal property, to the extent caused by the fault or
negligence of the Indemnifying

 

44

 

Party, its employees, agents
or contractors.  For avoidance of doubt,
SAVVIS is a third party for purposes of this Section 34.4.

 

34.5.        Indemnification Procedures.  With
respect to third-party claims, the following procedures shall apply:  Promptly after receipt by any entity entitled
to indemnification under this Section of notice of the commencement or
threatened commencement of any civil, criminal, administrative, or
investigative action or proceeding involving a claim in respect of which a
Party will seek indemnification pursuant to this Section, the indemnified Party
shall notify the indemnifying Party of such claim in writing.  No failure to so notify the indemnifying
Party shall relieve it of its obligations under this Agreement except to the
extent that it can demonstrate that it was materially prejudiced by such
failure.  The indemnifying Party shall be
entitled to have sole control over the defense and settlement of such claim;
provided that (i) the indemnified Party shall be entitled to participate in the
defense of such claim and to employ counsel at its own expense to assist in the
handling of such claim, and (ii) the indemnifying Party shall obtain the prior
written approval of the indemnified Party before entering into any settlement
of such claim or ceasing to defend against such claim.  Each Party agrees to use reasonable efforts
to mitigate Losses for which it seeks indemnification from the other Party
hereunder.

 

Section 35.            INSURANCE

 

35.1.        Insurance Coverage.  HP
shall during the Term and during the Termination/Expiration Assistance Period
and at its expense have and maintain in force at least the following insurance
coverages:

 

(a)           Employer’s Liability Insurance, including
coverage for occupational injury, illness and disease, and other similar social
insurance with minimum limits per employee and per event of $1,000,000 and a
minimum aggregate limit of $1,000,000 or the minimum limits required by law,
whichever limits are greater.

 

(b)           Worker’s Compensation Insurance, including
coverage for occupational injury, illness and disease, and other similar social
insurance in accordance with the laws of the country, state or territory
exercising jurisdiction over the employee.

 

(c)           Comprehensive General Liability Insurance,
including Products, Completed Operations, Premises Operations Personal and
Advertising Injury, Contractual and Broad Form Property Damage liability
coverages, on an occurrence basis, with a minimum combined single limit per
occurrence of at least $2,500,000 and a minimum combined single aggregate limit
of $2,500,000.  This coverage shall be
endorsed to name SG Cowen as additional insured.

 

(d)           Property Insurance for all risks of physical
loss of or damage to business personal property (except property covered by
Electronic Data Processing Insurance) that is in the possession, care, custody
or control of HP pursuant to this Agreement, with a minimum limit adequate to
cover risks on a replacement costs basis. 
Such insurance shall include Extra Expense and Business Income coverage
for HP.

 

(e)           Automotive Liability Insurance covering use
of all owned, non-owned and hired automobiles for bodily injury, property
damage, uninsured motorist and underinsured motorist liability with a minimum
combined single limit per accident of at least $2,500,000 and at least
$2,500,000 on an aggregate basis.  This
coverage shall be endorsed to name SG Cowen

 

45

 

as additional insured.

 

(f)            Commercial Crime Insurance, including blanket
coverage for Employee Dishonesty and Computer Fraud, for loss or damage arising
out of or in connection with any fraudulent or dishonest acts committed by the
employees of HP, acting alone or in collusion with others, including the
property and funds of others in their possession, care, custody or control,
with a minimum limit per event of $1,000,000.

 

(g)           Errors and Omissions Liability Insurance
covering liability for loss or damage due to an act, error, omission or
negligence with a minimum limit per event of $1,000,000 with an aggregate limit
of $1,000,000.

 

(h)           Umbrella Liability Insurance with a minimum
limit of $75,000,000 in excess of the insurance coverage described in
Sections 35.1(a), 35.1(c) and 35.1(g).

 

35.2.        Insurance Terms.

 

(a)           The insurance coverages under Sections
35.1(a) through 35.1(h) shall be primary, except with respect to
Section 35.1(c) for work performed at SG Cowen Service Locations, and all
coverage shall be non-contributing with respect to any other insurance or self
insurance which may be maintained by SG Cowen. 
To the extent any coverage is written on a claims-made basis, it shall
allow for reporting of claims until the later of one (1) year after the Term or
the expiration of the period of the applicable limitations of actions.

 

(b)           HP shall cause its insurers to issue
certificates of insurance evidencing that the coverages and policy endorsements
required under this Agreement and endeavor to provide that not less than thirty
(30) days’ written notice shall be given to SG Cowen prior to any modification,
cancellation or non-renewal of the policies. 
The insurers selected by HP shall be of good standing and authorized to
conduct business in the jurisdictions in which Services are to be
performed.  When the policy is issued
each such insurer shall have at least an A.M. Best rating of A-, with the exception
of any fully owned captive, and replacement coverage shall be sought if the
insurer’s rating goes below B+.  HP shall
assure that its subcontractors, if any:

 

(i)            are endorsed as additional insureds on HP
coverages specified by this Section 35; or

 

(ii)           maintain:

 

(A)          such insurance provided in
Section 35.1(a), with minimum limits of $1,000,000;

 

(B)           such insurance provided in
Section 35.1(b);

 

(C)           such insurance provided in
Section 35.1(c), with minimum limits of $1,000,000, which coverage shall
be endorsed to name HP as additional insured; and

 

(D)          such insurance provided in
Section 35.1(e), with minimum limits of $250,000 per person and $500,000
per occurrence, which coverage shall be endorsed to name HP as additional
insured.

 

46

 

(c)           In the case of loss or damage or other event
that requires notice or other action under the terms of any insurance coverage
specified in this Section 35, HP shall be solely responsible to take such
action.  HP shall provide SG Cowen with
contemporaneous notice and with such other information as SG Cowen may request
regarding the event.  Moreover, SG Cowen
shall provide to HP reasonable assistance and cooperation with respect to any
insurance claim.

 

(d)           HP’s obligation to maintain insurance
coverage shall be in addition to, and not in substitution for, HP’s other
obligations hereunder and HP’s liability to SG Cowen shall not be limited to
the amount of coverage required hereunder.

 

Section 36.            MISCELLANEOUS PROVISIONS

 

36.1.        Assignment.  This Agreement may not be
assigned by either Party without the prior written consent of the other Party,
and any such attempted assignment shall be deemed null and void.  Notwithstanding the foregoing, either Party
shall have the right without such consent to assign this Agreement, or any
portion hereof, upon notice to the other Party (i) to an Affiliate reasonably
capable of performing the assigning Party’s obligations under this Agreement or
(ii) pursuant to any merger, consolidation or sale of all or substantially all
of the assets of the assigning Party. 
This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the successors and permitted assigns of the Parties.

 

36.2.        Notice.  All notices, requests, claims,
demands, and other communications (collectively, “Notice”) under this Agreement
shall be in writing and shall be given or made by delivery in person, by
courier service, or by certified mail (postage prepaid, return receipt
requested) to the respective Party at the following address set forth below or
at such other address as such Party may hereafter notify the other Party in
accordance with this Section 36.2.  Each
such Notice will be effective when actually received at the respective
addresses specified below:

 

If to HP:

 

Hewlett-Packard Company

PO Box 143

Patterson, NY  12563

Attn:       Curt Kuehn

 

with a copy to:

 

Hewlett-Packard Company

3000 Hanover Street

Palo Alto, CA  94304

Attn:       TSG Legal

 

47

 

If to SG Cowen:

 

SG Cowen & Co., LLC

1221 Avenue of the Americas

New York, NY  10020

Attn: Chief Information Officer

 

with a copy to:

 

SG Cowen & Co., LLC

1221 Avenue of the Americas

New York, NY  10020

Attn:       Deputy General Counsel, 8th
Floor

 

36.3.        Counterparts.  This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one single agreement between the Parties.

 

36.4.        Force Majeure.

 

(a)           So long as such failure to perform could not
have been prevented by reasonable precautions, neither Party will be responsible
for any failure to perform due to causes beyond its reasonable control (each a “Force
Majeure Event”) including acts of God, war, riot, embargoes, acts of civil or
military authorities, fire, floods, earthquakes, or lightning; provided
however, that such Party gives prompt written notice thereof to the other
Party.  The time for performance will be
extended for a period equal to the duration of the Force Majeure Event, subject
to SG Cowen’s rights in Section 30.5, but in no event shall any such extension
extend the Term or any Renewal Term then in effect.

 

(b)           Notwithstanding subsection (a) above, no
delay or other failure to perform shall be excused pursuant to this
Section 36.4 by the acts or omissions of HP’s Agents, subcontractors,
materialmen, suppliers, or other third parties providing products or services
to any of the foregoing, unless (i) such acts or omissions are themselves
the product of a Force Majeure Event; and (ii) such delay or failure and the
consequences thereof are beyond the control and without the fault or negligence
of HP.

 

36.5.        Relationship.  The
Parties intend to create an independent contractor relationship and nothing
contained in this Agreement shall be construed to make either SG Cowen or HP
partners, joint venturers, principals, agents or employees of the other.  No officer, director, employee, agent,
affiliate or contractor retained by HP to perform work on SG Cowen’s behalf
under this Agreement shall be deemed to be an employee, agent or contractor of
SG Cowen.  Neither Party shall have any
right, power or authority, express or implied, to assume or create any
obligation of any kind, or to make any representation or warranty, on behalf of
the other Party or to bind the other Party in any respect whatsoever.

 

36.6.        Severability.  If
any provision of this Agreement is held by a court of competent jurisdiction to
be contrary to law, then the remaining provisions of this Agreement, if capable
of substantial performance, shall remain in full force and effect.

 

36.7.        Waiver Remedies. 
Except as otherwise expressly provided herein, all remedies provided for
in this Agreement shall be cumulative and in addition to and not in lieu of any
other

 

48

 

remedies available to either
Party at law or in equity.  No delay or
omission by either Party to exercise any right it has under this Agreement
shall impair or be construed as a waiver of such right.  A waiver by any Party of any breach or
covenant shall not be construed to be a waiver of any succeeding breach or any
other covenant.  All waivers must be in
writing and signed by the Party waiving its rights.

 

36.8.        Consents and Approvals. 
Except where expressly provided as being in the discretion of a Party,
where approval, acceptance, consent or similar action by either Party is
required under this Agreement, such action shall not be unreasonably delayed or
withheld.  An approval or consent given
by a Party under this Agreement shall not relieve the other Party from
responsibility for complying with the requirements of this Agreement, nor shall
it be construed as a waiver of any rights under this Agreement, except as and
to the extent otherwise expressly provided in such approval or consent.

 

36.9.        No Publicity.  The
parties agree that they and their personnel will not, without the prior written
consent of the other in each instance and in such other party’s discretion, use
in advertising, publicity or otherwise the name of the other party or any of
the other party’s Affiliates, or any trade name, trademark, trade device,
service mark, symbol or any abbreviation, contraction or simulation thereof
owned by the other party or any of the other party’s Affiliates.  HP agrees that it and its personnel will not,
without the prior written consent of SG Cowen in each instance and in SG Cowen’s
discretion, represent, directly or indirectly, that any product or any service
provided by HP has been approved or endorsed by SG Cowen or any of the SG Cowen
Affiliates, or refer to the existence of this Agreement.

 

36.10.      Entire Agreement.  This
Agreement, including all Schedules, appendices and exhibits attached hereto
(hereby incorporated by reference herein), represents the entire agreement
between the Parties with respect to its subject matter, and supersedes any prior
or contemporaneous representations, proposals, understandings, agreements, or
discussions, whether oral or written, between the Parties relative to such
subject matter.

 

36.11.      Amendments.  No amendment to, or change,
waiver or discharge of, any provision of this Agreement shall be valid unless
in writing and signed by an authorized representative of both Parties.

 

36.12.      Headings.  The headings of the articles
and sections used in this Agreement are included for reference only and are not
to be used in construing or interpreting this Agreement.

 

36.13.      Order of Precedence.  In
the event of a conflict between the provisions of this Agreement and any
Schedule(s), appendix(ices) or exhibit(s) attached hereto, the provisions of
this Agreement shall control.

 

36.14.      Survival.  The following Sections shall
survive termination or expiration of this Agreement for any reason:  Sections 4.10, 4.11, 8.1, 11, 12.6(a), 14,
15.1, 15.2, 16, 17.2, 19.3, 20, 24.5, 25, 26, 27, 28, 30.6, 30.8, 32, 33, 34
and 36 hereof, and those sections which by their terms continue in effect
through the Termination/Expiration Assistance Period.

 

36.15.      Covenant of Further Assurances.  SG
Cowen and HP covenant and agree that, subsequent to the execution and delivery
of this Agreement and, without any additional consideration, each of SG Cowen
and HP shall execute and deliver any further legal instruments and perform any
acts which are or may become necessary to effectuate the

 

49

 

purposes
of this Agreement.

 

36.16.      Negotiated Terms.  The
Parties agree that the terms and conditions of this Agreement are the result of
negotiations between the Parties and that this Agreement shall not be construed
in favor of or against any Party by reason of the extent to which any Party or
its professional advisors participated in the preparation of this Agreement.

 

36.17.      Governing Law and Jurisdiction.  This
Agreement shall be construed and enforced in accordance with the laws of the
State of New York, without giving effect to the principles of conflicts of
law.  The Parties consent and agree that
all suits, actions, and other legal proceedings arising out of or relating to
this Agreement shall be exclusively maintained in either the federal or state
courts located in New York County, New York, and each Party irrevocably submits
to the exclusive jurisdiction and venue of any such court in any such suit,
action or other legal proceeding.

 

36.18.      Exports.  The Parties acknowledge that
certain Services to be provided under this Agreement may be subject to export
controls under the laws and regulations of the United States and other
countries to the extent such Services are provided from Service Locations
outside of the United States.  HP will be
responsible, as part of the Services, for securing all permits, licenses,
regulatory approvals and authorizations, whether domestic or international, and
including all applicable import/export control approvals required for HP to
provide the Services to SG Cowen and will take all lawful steps necessary to
maintain such permits during the term of this Agreement.  HP will have financial responsibility for,
and will pay, all fees and taxes associated with obtaining such export permits.  HP shall be solely responsible for compliance
with all laws and regulations relating to data protection and privacy and/or
trans-border data flow.  HP will pay for
and be solely responsible for obtaining and maintaining such visas as may be
required for its employees to enter and remain in the country in which Services
are rendered in connection with this Agreement.

 

36.19.      United Nations Declaration. 
Société Générale Group has signed the United Nations Declaration for the
Environment and Sustainable Development on November 21, 2001, and has been included
in the four main Sustainable Development indices since their inception.  Société Générale and its subsidiaries,
including SG Cowen & Co., LLC, are required to engage in business with
suppliers who comply with the basic terms of this Declaration.  HP acknowledges and agrees that it
(a) complies with all labor laws in effect in the United States,
(b) complies with all environmental laws in effect in the United States,
and (c) will not engage in any business related to HP’s provision of the
Services, who, to its knowledge, do not comply with the provisions as described
in this Section.

 

50

 

IN WITNESS WHEREOF, the
parties have each caused this Agreement to be signed and delivered by its duly
authorized representative.

 

 

	
  HEWLETT-PACKARD
  COMPANY

  	
   

  	
  SG COWEN
  & CO., LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Joseph Rapa

  	
   

  	
   

  	
  By:

  	
  /s/ Pascal Pinson

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: Joseph Rapa

  	
   

  	
  Name: Pascal Pinson

  
	
   

  	
   

  	
   

  
	
  Title: Northeast Area Ge  neral Manager

  	
   

  	
  Title: Chief
  Administrative Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HEWLETT-PACKARD
  COMPANY

  	
   

  	
  SG COWEN
  & CO., LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Curt Kuehn

  	
   

  	
   

  	
  By:

  	
  /s/ Jean Orlowski

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: Curt Kuehn

  	
   

  	
  Name: Jean Orlowski

  
	
   

  	
   

  	
   

  
	
  Title: Client Executive

  	
   

  	
  Title: Chief Information
  Officer

  
										

 

51Exhibit
10.9

 

 

 

INDEMNIFICATION AGREEMENT

by and among

SOCIÉTÉ GÉNÉRALE,

SG AMERICAS SECURITIES
HOLDINGS, INC.,

COWEN AND COMPANY, LLC

and

COWEN GROUP, INC.

 

Dated as of                         ,
2006

 

 

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  I

  	
  DEFINITIONS

  	
   

  	
  1

  
	
  SECTION 1.01.

  	
  Definitions

  	
   

  	
  1

  
	
  ARTICLE II

  	
  MUTUAL RELEASES

  	
   

  	
  13

  
	
  SECTION 2.01.

  	
  Cowen Release of SG

  	
   

  	
  13

  
	
  SECTION 2.02.

  	
  SG Release of Cowen Inc

  	
   

  	
  13

  
	
  SECTION 2.03.

  	
  SG Obligations Not Affected

  	
   

  	
  14

  
	
  SECTION 2.04.

  	
  No Cowen Inc. Claims

  	
   

  	
  14

  
	
  SECTION 2.05.

  	
  No SG Claims

  	
   

  	
  14

  
	
  SECTION 2.06.

  	
  Subsidiary Releases

  	
   

  	
  14

  
	
  ARTICLE III

  	
   

  	
  INDEMNIFICATION

  	
   

  	
  14

  
	
  SECTION 3.01.

  	
  Indemnification by Cowen Inc

  	
   

  	
  14

  
	
  SECTION 3.02.

  	
  Indemnification by SG

  	
   

  	
  15

  
	
  SECTION 3.03.

  	
  Clarification of Intent

  	
   

  	
  16

  
	
  SECTION 3.04.

  	
  Indemnification Obligations Net of Insurance
  Proceeds and Other Amounts

  	
   

  	
  17

  
	
  SECTION 3.05.

  	
  Procedures for Indemnification of Third Party Claims

  	
   

  	
  17

  
	
  ARTICLE IV

  	
  CERTAIN OTHER MATTERS

  	
   

  	
  19

  
	
  SECTION 4.01.

  	
  Additional Matters

  	
   

  	
  19

  
	
  SECTION 4.02.

  	
  Right of Contribution.

  	
   

  	
  20

  
	
  SECTION 4.03.

  	
  Covenant Not to Sue

  	
   

  	
  20

  
	
  SECTION 4.04.

  	
  Remedies Cumulative

  	
   

  	
  20

  
	
  SECTION 4.05.

  	
  Inducement

  	
   

  	
  21

  
	
  SECTION 4.06.

  	
  Post-Separation Date Conduct

  	
   

  	
  21

  
	
  SECTION 4.07.

  	
  Late Payments

  	
   

  	
  21

  
	
  ARTICLE V

  	
  COOPERATION; CONFIDENTIALITY

  	
   

  	
  21

  
	
  SECTION 5.01.

  	
  Other Agreements Providing for Exchange of
  Information

  	
   

  	
  21

  
	
  SECTION 5.02.

  	
  Production of Witnesses; Records; Cooperation

  	
   

  	
  21

  
	
  SECTION 5.03.

  	
  Confidentiality.

  	
   

  	
  23

  
	
  SECTION 5.04.

  	
  Protective Arrangements

  	
   

  	
  23

  

 

i

 

	
  ARTICLE
  VI

  	
  DISPUTE
  RESOLUTION

  	
   

  	
  24

  
	
  SECTION 6.01.

  	
  Disputes

  	
   

  	
  24

  
	
  ARTICLE VII

  	
  TERMINATION

  	
   

  	
  25

  
	
  SECTION 7.01.

  	
  Termination

  	
   

  	
  25

  
	
  ARTICLE VIII

  	
  MISCELLANEOUS

  	
   

  	
  25

  
	
  SECTION 8.01.

  	
  Counterparts; Entire Agreement; Facsimile Signatures

  	
   

  	
  25

  
	
  SECTION 8.02.

  	
  Governing Law

  	
   

  	
  25

  
	
  SECTION 8.03.

  	
  Assignability

  	
   

  	
  26

  
	
  SECTION 8.04.

  	
  Third Party Beneficiaries

  	
   

  	
  26

  
	
  SECTION 8.05.

  	
  Notices

  	
   

  	
  26

  
	
  SECTION 8.06.

  	
  Severability

  	
   

  	
  27

  
	
  SECTION 8.07.

  	
  Force Majeure

  	
   

  	
  27

  
	
  SECTION 8.08.

  	
  Headings

  	
   

  	
  27

  
	
  SECTION 8.09.

  	
  Survival of Covenants

  	
   

  	
  27

  
	
  SECTION 8.10.

  	
  Subsidiaries

  	
   

  	
  28

  
	
  SECTION 8.11.

  	
  Waivers

  	
   

  	
  28

  
	
  SECTION 8.12.

  	
  Amendments

  	
   

  	
  28

  
	
  SECTION 8.13.

  	
  Interpretation

  	
   

  	
  28

  
	
  SECTION 8.14.

  	
  Mutual Drafting

  	
   

  	
  28

  
	
  SECTION 8.15.

  	
  No Right to Set-Off

  	
   

  	
  29

  
	
  SECTION 8.16.

  	
  Enforcement Costs

  	
   

  	
  29

  
	
  SECTION 8.17.

  	
  Remedies

  	
   

  	
  29

  
					

 

ii

 

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

R E C I T A L S:

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

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

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

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

ARTICLE I

DEFINITIONS

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

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

“Agreement” means
this Indemnification Agreement.

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

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

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

 

 

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

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

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

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

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

(A)  the outstanding membership interests of Cowen
LLC;

(B)  the outstanding capital shares of Cowen UK;

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

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

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

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

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

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

 

2

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

3

 

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

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

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

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

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

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

 

4

 

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

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

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

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

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

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

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

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

 

5

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

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

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

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

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

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

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

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

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

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

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

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

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

 

6

 

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

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

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

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

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

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

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

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

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

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

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

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

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

 

7

 

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

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

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

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

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

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

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

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

“Parties” means
the parties to this Agreement.

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

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

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

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

 

8

 

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

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

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

“SEC” means the
Securities and Exchange Commission.

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

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

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

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

“SGAI” means SG
Americas, Inc.

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

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

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

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

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

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

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

 

9

 

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

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

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

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

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

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

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

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

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

 

10

 

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

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

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

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

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

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

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

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

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

 

11

 

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

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

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

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

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

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

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

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

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

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

 

12

 

ARTICLE II

MUTUAL RELEASES

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

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

 

13

 

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

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

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

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

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

ARTICLE III

INDEMNIFICATION

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

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

 

14

 

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

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

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

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

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

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

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

 

15

 

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

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

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

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

SECTION 3.03.  Clarification of Intent.

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

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

 

16

 

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

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

SECTION 3.05.  Procedures for Indemnification of Third
Party Claims.

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

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

 

17

 

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

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

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

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

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

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

 

18

 

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

ARTICLE IV

CERTAIN OTHER MATTERS

SECTION
4.01.  Additional Matters.

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

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

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

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

 

19

SECTION
4.02.  Right of Contribution.

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

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

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

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

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

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

 

20

 

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

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

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

ARTICLE V

COOPERATION; CONFIDENTIALITY

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

SECTION 5.02.  Production of Witnesses; Records;
Cooperation.

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

 

21

 

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

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

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

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

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

 

22

 

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

SECTION 5.03.  Confidentiality.

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

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

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

 

23

 

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

ARTICLE VI

DISPUTE RESOLUTION

SECTION 6.01.  Disputes.

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

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

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

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

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

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

 

24

 

ARTICLE VII

TERMINATION

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

ARTICLE VIII

MISCELLANEOUS

SECTION 8.01.  Counterparts; Entire Agreement; Facsimile
Signatures.

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

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

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

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

 

25

 

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

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

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

If to SG:

Société Générale

1221 Avenue of the Americas

New York, New York 10020

Attn:  General Counsel, SG Americas

Facsimile:  (212) 278-7432

 

With
a copy to:

Mayer, Brown, Rowe & Maw LLP

1675 Broadway

New York, New York  10019

Attn:  James B. Carlson

Facsimile:  (212) 262-1910

 

26

 

 

If to Cowen:

Cowen Group, Inc.

1221 Avenue of the Americas

New York, New York 10020

Attn:  General Counsel

Facsimile:
 (646) 562-1861

 

With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY  10036-6522

Attn:                    Lou R. Kling

                                                Thomas W.
Greenberg

Facsimile:  (212) 735-2000

 

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

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

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

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

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

 

27

 

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

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

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

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

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

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

 

28

 

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

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

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

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

* * * *
*

 

29

 

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

	
   

  	
  SOCIÉTÉ
  GÉNÉRALE

   

   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  SG
  AMERICAS SECURITIES HOLDINGS, INC.

   

   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

   

  COWEN
  AND COMPANY, LLC

   

   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

   

  COWEN
  GROUP, INC.

   

   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title

  

 

 

30

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00104-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00104-of-00352.parquet"}]]