Exhibit 10.14(b)
AMENDED AND RESTATED STRATEGIC ALLIANCE AGREEMENT(1)
This Amended and Restated Strategic Alliance Agreement (this
"Agreement") is entered into as of September 26, 2000 by and between E*TRADE
Group Inc., a Delaware corporation ("E*TRADE"), and Wit SoundView Group, Inc. a
Delaware corporation ("Wit"); provided, however, that the terms and conditions
of this Agreement shall not become binding or effective until the effective time
of the Merger.
WHEREAS, the parties hereto are entering into an Account
Transfer Agreement (the "Account Transfer Agreement"), pursuant to which Wit
will cause Wit Capital Corporation to transfer to E*TRADE Securities, Inc. all
right, title and interest in and to the online retail brokerage accounts
maintained by Wit Group, in connection with Wit Group's agreement to no longer
engage in the online retail brokerage business; and
WHEREAS, Wit Group (as defined herein) wishes to offer, and E
Group (as defined herein) wishes for Wit Group to offer, existing and future
investment banking products and services to customers of E Group, upon the terms
and conditions hereof;
NOW, THEREFORE, in consideration of the covenants and agree
ments contained herein, and for other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. CERTAIN DEFINITIONS.
(a) "Accounts" means those non-online brokerage accounts main
tained by Wit Group for natural persons whose individual net worth, or joint net
worth with that person's spouse, exceeds $5,000,000. As of the date of this
Agree ment, Wit Group maintains approximately 300 of such accounts and hereby
covenants and agrees that it will not seek to expand this segment of its
business at any time during the term of this Agreement, and in any event shall
not at any time during the term of this Agreement maintain more than 500 of such
accounts. Wit
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(1) Confidential treatment has been requested for the redacted portions of
this document, which are indicated by the symbol *. The confidential
redacted portions have been filed separately with the Securities and
Exchange Commission as Exhibit 10.14(a) to the Registration Statement
on Form S-4 of Wit SoundView Group, Inc. (File No. 333-42062).
Group shall use its reasonable efforts to cause any potential new Accounts
for natural persons to open online accounts at E Group and maintain retail
brokerage accounts with E Group.
(b) "Affiliate" of any Person means any other Person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with such Person. For purposes of this
definition, "control" (or "controlled," as the context may require) shall have
the meanings set forth in Rule 12b-2 promulgated under the Securities Exchange
Act of 1934, as amended.
(c) "Change in Control" means, with respect to any Person, (i)
the acquisition of such Person by another Person of a majority of the voting
interests in such first Person; (ii) the sale of all or substantially all of the
assets of such first Person; (iii) a merger, consolidation, or other business
combination pursuant to which the stockholders of such Person prior to the
effective date of such transaction have beneficial ownership of less than fifty
percent (50%) of the total combined voting power or economic interests of the
surviving or continuing entity immediately following such transaction; or (iv)
any other acquisition by another Person of primary control (as defined for
purposes of the above definition of Affiliate) of the first Person, including
through a proxy contest, proxy solicitation or the election or appointment of
directors nominated or designated by such other Person. For purposes of the
foregoing definition, a Person shall also include and refer separately to any
subsidiaries of such Person that taken together account for more that 50% of
such Person's broker-dealer or investment banking (including research) assets or
revenues on a consolidated basis.
(d) "Covered Issuer" means any issuer that (i) is organized in
the U.S., (ii) is not a registered or an unregistered investment company (other
than any particular registered closed-end investment company with respect to
which Wit Group is acting as an Underwriter or dealer **************, it being
understood that the foregoing exception is designed to provide exclusivity for
registered closed-end funds only on a case-by-case basis) or an investment fund,
pooled investment vehicle or trust; and (iii) is not a registered investment
company or is not an invest ment fund or a pooled investment vehicle managed by
E Group or Wit Group as a proprietary securities product.
(e) "Covered Offering" means the U.S. tranche of any private
placement of equity or equity derivative securities (including common stock,
preferred stock, convertible debt securities and warrants or other securities
convertible into or exchangeable for the same or other equity or equity
derivative
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securities) of a Covered Issuer.
(f) "Covered Securities" means all securities offered in
Covered Offerings that are allocated through Wit Group for qualified retail
investors.
(g) "E Group" means E*TRADE and/or its controlled Affiliates,
as the context may require.
(h) "Excluded Securities" means (i) securities that are
allocated by Wit Group for offering or sale to the Accounts and (ii) securities
that are allocated by Wit Group for offering or sale to employees, directors and
Affiliates of Wit Group.
(i) "Initial Public Offering" means an underwritten initial
public offering in the United States of common stock, ordinary shares, American
Deposi tory Shares or the equivalent by whatever name, of a Covered Issuer that
is not a registered investment company or real estate investment trust, that is
offered and sold in an initial public offering in which the aggregate offering
price of the shares in the U.S. tranche without exercise of any overallotment
option exceeds $**** and is less than $****.
(j) "IPO Retail Shares" means Retail Securities consisting of
common stock, ordinary shares, American Depository Shares or the equivalent by
whatever name offered and sold in an Initial Public Offering.
(k) "Merger" means the merger of E*OFFERING Corp. into Wit
SoundView Corp. pursuant to the Merger Agreement.
(l) "Merger Agreement" means the Agreement and Plan of Merger
dated as of May 15, 2000, by and among Wit, Wit SoundView Corporation and
E*OFFERING Corp.
(m) "NASD" means the National Association of Securities
Dealers, Inc.
(n) "Person" means any individual, corporation, partnership,
limited liability company, firm, joint venture, association, joint stock
company, trust, unincorporated organization or other entity or organization.
(o) "Qualified Co-manager" means, with respect to any calendar
year, one of the ten highest ranked investment banks in the United States from
the previous calendar year, based on the total number of completed initial
public
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offerings in the United States (as published by Commscan or, if Commscan ceases
to publish such transaction statistics, Bloomberg, L.P. or another nationally
recognized financial research organization).
(p) "Registered Offering" means the U.S. tranche of any
initial public offering, follow-on or secondary offering or other offering of
equity or equity derivative securities (including common stock, preferred stock,
convertible debt securities and warrants or other securities convertible into or
exchangeable for the same or other equity or equity derivative securities) of a
Covered Issuer that is registered with the U.S. Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended.
(q) "Retail Securities" means all securities offered in a
Registered Offering that are allocated by Wit Group for retail distribution,
which shall not in any event be less than ****% of the amount of
"non-designated" shares available to Wit Group in such Registered Offering;
provided, however, that any "non-designated" shares allocated by Wit Group that
are Excluded Securities shall not be deemed available to Wit Group for purposes
of determining compliance with Section 4(a) of this Agreement.
(r) "Start Date" means July 1, 2000.
(s) "Wit Group" means Wit and/or its controlled Affiliates, as
the context may require.
2. RELATIONSHIP.
During the term of this Agreement, Wit Group, on a
non-exclusive basis (except as specifically provided in Section 3(a)(ii) below),
shall be entitled to offer securities of all kinds through E Group to customers
of E Group. E Group shall be entitled to reject any such securities at its sole
discretion; provided, however, that E Group may not offer for sale or sell any
securities being offered by Wit in an E Group rejected offering that are subject
to Wit Group's Exclusivity Right that are offered to it by another Person who is
participating in such rejected offering (an "Alternative Allocation"), provided,
further that E Group may accept an Alternative Allocation in an offering
rejected by E Group that is not subject to Wit Group's Exclusivity Right if the
relevant per unit selling concession or similar economic consideration payable
to E Group in such Alternative Allocation is greater than that which Wit Group
is prepared to pay after having been given an opportunity to match such selling
concession or other economic consideration. Beginning as early as
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practicable in the course of each securities offering and placement, Wit Group
shall consult with E Group regarding E Group's interest in offering the
securities to customers of E Group. E Group shall endeavor to advise Wit Group
within a commercially reasonable time of its intention to accept or not accept
any offering. In any offering that E Group accepts that is not subject to Wit
Group's Exclusivity Right, E Group shall take from or through Wit Group a
mutually agreed upon proportion of the securities made available for
distribution by E Group hereunder for offering and sale to its customers.
3. EXCLUSIVITY.
(a) EXCLUSIVITY.
(i) WIT GROUP'S OBLIGATIONS. Subject to Section 15(a)
and the provisions of this Section 3, Wit Group shall make available
for sale solely and exclusively through E Group to customers of E Group
all Retail Securities and all Covered Securities (other than Excluded
Securities). Retail Securities offered through the auction facility of
Vostock shall be deemed to be offered solely and exclusively through E
Group to customers of E Group for purposes of the preceding sentence
and Section 4(a). Wit Group will coordinate and cooperate with E Group
such that an efficient and cost effective process is established
whereby all such Retail Securities and all Covered Securities are made
available to E Group for offer, sale and delivery through E Group to
customers of E Group. Wit Group and E Group will evaluate the Vostock
process to determine how best to provide access to auctions conducted
by Wit Group through Vostock with the objective of providing a seamless
interface to Vostock auctions to help maximize the number of shares
that can be distributed to E Group customers. In addition, Wit Group
and E Group will evaluate whether the Vostock process is appropriate
for initial public offerings and Wit Group agrees that it will not use
Vostock for initial public offerings without E Group's consent.
(ii) E GROUP'S OBLIGATIONS. Subject to Section 15(b)
and the provisions of this Section 3, so long as Wit Group is in
compliance with Section 3(a)(i) and is not then in default of any of
its material obligations under this Agreement, in each Registered
Offering and in each Covered Offering E Group shall only offer to its
United States retail customers Retail Securities and Covered
Securities, respectively, and shall not offer to its United States
customers any Retail Securities in a Registered Offering, or
Covered Securities in a Covered Offering, made available by any Person
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other than Wit Group in any Registered Offering or Covered Offering
(the "Exclusivity Right"); it being understood that, notwithstanding
anything herein to the contrary, E Group shall be permitted to offer to
its United States customers any and all non-equity or non-equity-linked
securities (such as debt securities) and equity or equity-linked
securities of companies located outside the United States to those of
its customers located either within or outside of the United States.
(iii) DURATION OF EXCLUSIVITY RIGHT. As a result of
the foregoing and subject to the other express provisions of this
Agreement, for the five years following the Start Date, the Exclusivity
Right shall be in existence.
(a) NON-COMPETITION.
(i) At all times that the Exclusivity Right is in
effect and E Group is not then in default of any of its material
obligations under this Agreement in any manner that would permit
termination of this Agreement by Wit pursuant to Section 18(c), Wit
shall not, and shall not permit any of its subsidiaries to:
(A) enter into or engage, directly or
indirectly, in the business of operating a retail securities brokerage
business in the United States, other than with respect to the Accounts;
or
(B) solicit retail customers, other than the
Accounts, in competition with E Group or any of its Affiliates in the
business of operating a retail securities brokerage business in the
United States.
(ii) At all times that the Exclusivity Right is in
effect and Wit Group is not then in default of any of its material
obligations under this Agreement in any manner that would permit
termination of this Agreement by E*TRADE pursuant to Section 18(c),
E*TRADE shall not, and shall not permit any of its subsidiaries to,
enter into or engage, directly or indirectly, in the investment banking
business in the United States with respect to those investment banking
activities of E Group that are restricted by the Exclusivity Right.
(iii) During the terms of this Agreement and for a
period of twelve months thereafter, Wit Group will not solicit any
employee of E
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Group for the purpose of offering employment to such Person and E Group
will not solicit any employee of Wit Group for the purposes of offering
employment to such person. The foregoing shall not prohibit Wit Group
or E Group from offering employment to or hiring any employee
responding to a newspaper or other general solicitation.
(iv) Without limitation, the parties agree and
intend that the covenants contained in this Section 3(b) shall be
deemed to be a series of separate covenants and agreements, one for
each and every political subdivi sion of each jurisdiction. If, in any
judicial proceeding, a court shall refuse to enforce in such action any
of the separate covenants deemed included herein, then at the option of
the party hereto entitled to the benefit of such covenants,
wholly-unenforceable covenants or components thereof shall be deemed
eliminated from the provisions hereof for the purpose of such
proceeding to the extent necessary to permit the remaining separate
covenants to be en forced in such a proceeding. The parties intend to
have covenants enforce able to the fullest extent of the law as to
scope, time and geography.
(v) The parties agree that due to the nature of the
services and capabilities of the parties, there can be no adequate
remedy at law for any breach of the obligations of the other party
under this Section 3(b) hereunder, that any such breach by one party
may allow the other party hereto and/or third parties to unfairly
compete with the breaching party and its affiliates resulting in
irreparable harm to the other party and therefore, that upon any such
breach or any threat thereof, the other party and its affiliates shall
be entitled to appropriate equitable relief in addition to whatever
remedies it might have at law and attorneys' fees and costs of suit, in
connection with any breach, or any enforcement, of the breaching
parties obligations pursuant to this Section 3(b).
(vi) Each party acknowledges, and represents and
warrants to the other, that its covenants in this Section 3(b) are
reasonably necessary for the protection of the other party's interests
under this Agreement and are not unduly restrictive upon it or any of
its Affiliates.
(vii) Each Party shall notify the other of any breach
or alleged breach by the other of any provision of this Section 3(b).
(b) ADDITIONAL CONSIDERATION. At or prior to the Closing under
the Account Transfer Agreement, Wit Group shall issue to E*TRADE, (i) four
million
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twenty-five thousand nine hundred and forty-eight (4,025,948) shares (the
"Alliance Shares") of Wit common stock, par value $0.01 per share ("Common
Stock") and (ii) a warrant issued to E Group in the form attached hereto as
Annex A (the "Warrant") to purchase up to an aggregate of two million
(2,000,000) shares of Common Stock, as further consideration, together with the
transactions contemplated by the Account Transfer Agreement, for E Group
entering into the strategic alliance contemplated hereby and terminating the
existing Letter of Intent referred to below. Certificates, in form reasonably
satisfactory to E*TRADE, representing the Alliance Shares shall be delivered to
E*TRADE at or prior to the Closing under the Account Transfer Agreement. The
Alliance Shares and the shares issuable upon exercise of the Warrant, in each
case upon issuance as provided herein, shall be (i) validly issued, fully paid,
non-assessable and free and clear of any liens, charges, preemptive rights or
other encumbrances or restrictions and (ii) issued in compliance with all
applicable laws.
The Alliance Shares shall be subject to prohibitions on
transfer for a three-year period from the date of the Closing under the Merger
Agreement, and each certificate for such Alliance Shares shall be subject to a
restrictive legend substan tially in the form set forth in Exhibit A to the
Merger Agreement providing for a thirty-six month prohibition on transfer.
4. SHARE ALLOCATION.
(a) WIT GROUP SHARE ALLOCATION. Wit Group agrees that (i) in
each and every Registered Offering that Wit Group participates in as an
underwriter, placement agent, broker-dealer, selling group member, distributor
or otherwise, the amount of Retail Securities in such offering that shall be
made available to E Group shall be **** percent (****%) of the total Retail
Securities (other than Excluded Securities) in such offering and (ii) in each
and every Registered Offering that Wit Group participates in as an underwriter,
placement agent, broker-dealer, selling group member, distributor or otherwise,
the amount of "non-designated" shares in such offering that shall be made
available to E Group shall be at least **** percent (****%) of the total of such
"non-designated" shares available to Wit Group in such offering; provided,
however, that any "non-designated" shares allocated by Wit Group that are
Excluded Securities shall not be deemed available to Wit Group for purposes of
determining compliance with the preceding percentage threshold. For purposes of
this Agreement, "non-designated" shares shall mean those shares that are not
specifically designated for allocation to institutional accounts or other
accounts by the lead managing underwriter or placement agent.
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Each of the allocation requirements set forth above may only
be waived by the written approval of E Group or the member of the commitment
committee of Wit Group designated by E Group. E*TRADE shall be entitled to
reject or not accept participation in any equity offering at its sole
discretion.
(b) E GROUP'S ALLOCATIONS IN LEAD MANAGED PUBLIC OFFERINGS.
Solely with respect to Registered Offerings in which Wit Group is the lead
managing underwriter and in which shares are not rejected by E Group for
distribution to customers of E Group, the amount of equity securities allocated
or made available to E Group in each such offering must be at least ****% of the
total amount of securi ties offered in each such offering.
(c) E GROUP CUSTOMER ALLOCATION. E Group shall establish
commercially reasonable criteria for the allocation to retail brokerage accounts
of securities made available by Wit Group to E Group in any offerings under this
Agreement. E Group shall undertake commercially reasonable steps to maximize
share retention of Registered Securities by its retail customers for at least
thirty (30) days, subject to applicable regulatory requirements.
(d) PRIVATE PLACEMENTS. The parties hereto shall negotiate in
good faith the terms and conditions under which Wit Group shall make available
Covered Securities for offering by E Group in private placements, and such terms
and conditions shall be evidenced in an addendum to this Agreement. Such
addendum shall include matters such as identifying which types of Covered
Offerings are appropriate or eligible for offering to qualified retail investor
customers of E Group, the methods of qualifying customers for particular Covered
Offerings, the methods for determining the amount of Covered Securities in such
offerings that should be made available to qualified retail investors, the
proportion thereof that should be made available for customers of E Group and
the compensatory arrangements for E Group's participation in Covered Offerings,
and other matters relating to such offerings. To the extent that the parties are
unable to agree upon the terms and conditions of such addendum, any such
disagreements shall be resolved by the Committee (as defined in Section 16(c)).
5. RETAIL ACCOUNT INQUIRIES; SHARE PROGRAMS.
(a) ACCOUNT INQUIRIES. Wit Group shall promptly direct to E
Group all inquiries with respect to Retail Securities or retail accounts (other
than Accounts) that Wit Group receives, either directly or indirectly.
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(b) SHARE PROGRAMS. E Group shall pay to Wit Group, within 30
days following the end of each calendar quarter during the term of this
Agreement, the Program Fee described below for each new retail brokerage account
opened at E Group by a retail customer for the purpose of participating in an
"affinity" or "directed" share program, or similar such program, administered by
Wit Group, including without limitation, (i) Wit Group's electronic Affinity
Share Program ("eASP") and (ii) Wit Group's electronic Directed Share Program
("eDSP"). The "Program Fee" shall be $**** for each such new account opened at
any time prior to the first anniversary of the Merger, and shall be a mutually
agreed upon comparable amounts paid by E Group to other Persons for similar
customer account acquisitions executed by E Group over the then preceding
12-month period. E Group and Wit Group shall negotiate in good faith on an
annual basis to determine the amount of the Program Fee prior to each yearly
anniversary of the Merger, and the amount so determined shall be in effect
thereafter until the next succeeding anniversary of the Merger. E Group shall be
entitled to reject or not accept any such new account at its sole discretion.
Notwithstanding Section 6 hereof, Wit Group shall pay to E Group **** percent
(****%) of the selling concession in connection with the Retail Securities
allocated to any eASP account or eDSP account.
6. SELLING CONCESSIONS.
(a) LEAD/CO-MANAGED DEALS. Subject to the requirements of
NASD Rule 2710 (Corporate Finance Rule), in connection with all public
offerings in which Wit Group participates as a lead managing underwriter or
co-managing underwriter, E Group, on the one hand, and Wit Group, on the
other hand, will share the dealer selling concession otherwise allocable in
respect of such offerings as follows: (i) E Group will receive ***** percent
(****%) of such concession on offerings in which the number of shares
allocated or made available for sale through E Group to its customers in
connection with the offering is **** percent (****%) or less of the total
number of shares (before giving effect to any over-allotment option) offered
to the public in such offering; (ii) E Group will receive **** percent
(****%) of such concession on offerings in which the number of shares
allocated or made available for sale through E Group to its customers in
connection with the offering is greater than **** percent (****%), but less
than **** percent (****%), of the total number of shares (before giving
effect to any over-allotment option) offered to the public in such offering
and (iii) E Group will receive **** percent (****%) of such concession on
offerings in which the number of shares allocated or made available for sale
through E Group pursuant to the offering is equal to or greater than ****
percent (****%) of the total number of shares (before giving effect to any
over-
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allotment option) offered to the public in such offering.
(b) MINIMUM PAYMENTS ON CO-MANAGED DEALS. With respect to each
and every Registered Offering in which Wit Group is a co-managing under writer,
to the extent the amount of Retail Securities allocated or made available for
sale by E Group to its customers does not in the aggregate equal at least ****%,
****%, and ****% of the total amount of all securities offered in each such
public offering during any of the first, second or third ****-month periods
following the Start Date (the amount of securities representing such shortfall,
the "Allocation Deficiency"), Wit Group shall pay to E Group an amount equal to
the portion of the dealer selling concession which would have been otherwise
allocable under Section 6(a) above with respect to the Allocation Deficiency.
All such payments shall be made on a quarterly basis, by wire transfer of
immediately available funds to an account or accounts designated by E Group to
Wit Group, within 15 days after the end of the calendar quarter in which the
obligation to make such payments arise (or in the case of the last quarter or
portion thereof during the term of this Agreement, within 15 days after the
expiration or termination of this Agreement).
(c) OTHER EQUITY PUBLIC OFFERINGS. Subject to the requirements
of NASD Rule 2710 (Corporate Finance Rule), in connection with all Registered
Offerings in which Wit Group participates as an underwriter, dealer or a member
of the selling group, but is not a lead managing underwriter or co-managing
underwriter, E Group, on the one hand, and Wit Group, on the other hand, will
share the dealer selling concession otherwise allocable to Wit Group in respect
of such public offerings as follows: (i) E Group will receive **** percent
(****%) of such conces sion on offerings in which the number of shares allocated
or made available for sale through E Group to its customers in connection with
the offering is less than **** shares and (ii) E Group will receive **** percent
(****%) of such concession on offerings in which the number of shares allocated
or made available for sale through E Group to its customers in connection with
the offering is greater than **** shares.
(d) OTHER PUBLIC OFFERINGS. Subject, where applicable, to the
requirements of NASD Rule 2710 (Corporate Finance Rule), in connection with all
other public offerings in which Wit Group participates as an underwriter, dealer
or other member of the selling group, but is not the lead managing or
co-managing underwriter, E Group and Wit Group shall negotiate the selling
concession or similar payment in connection with any such offering on a
class-by-class or case-by-case basis.
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(e) TIME OF PAYMENT. The foregoing selling concession and
comparable payments shall be paid to E Group at the same time as paid to other
selling group participants, and as consistent with industry practice, except as
provided in Section 6(b) of this Agreement.
7. TRADING FLOW.
(a) LEAD MANAGED OFFERINGS. For any Registered Offering in
which Wit Group is a lead managing underwriter, E Group shall use commercially
reasonable efforts to direct all secondary market orders with respect to the
particular security offered in such offering to Wit Group, or to a broker-dealer
specified by Wit Group, for a period of **** months from the date on which such
public offering commences trading. Wit Group shall pay to E Group a market rate
trading flow rebate (currently $**** per share, to be adjusted at least annually
to reflect adjust ment to the prevailing market rate) for each share so
directed. Notwithstanding anything herein to the contrary, E Group and Wit Group
understand and agree that no provision of this Agreement shall restrict the
other, in its reasonable good faith judgment, from taking, without liability to
the other, any action required by any rule or regulation of the SEC, any
self-regulatory organization or any governmental entity to which it is subject,
or from complying with any fiduciary duties to its customers; provided that it
shall, prior to taking such action, to the extent reasonably feasible in light
of the then circumstances, notify the other in writing thereof and consult with
the other regarding the steps to be taken to ensure compliance with such rule or
regulation.
(b) CO-MANAGED OFFERINGS. For any Registered Offering in which
Wit Group is a co-managing underwriter but not a lead managing underwriter, E
Group shall use commercially reasonable efforts to direct all secondary market
orders with respect to the particular security offered in such public offering
to Wit Group, or to a broker-dealer specified by Wit Group, for a period of 6
months from the date on which such public offering commences trading.
Notwithstanding any thing herein to the contrary, E Group and Wit Group
understand and agree that no provision of this Agreement shall restrict the
other, in its reasonable good faith judgment, from taking, without liability to
the other, any action required by any rule or regulation of the SEC, any
self-regulatory organization or any governmental entity to which it is subject,
or from complying with any fiduciary duties to its customers; provided that it
shall, prior to taking such action, to the extent reasonably feasible in light
of the then circumstances, notify the other in writing thereof and consult with
the other regarding the steps to be taken to ensure compliance with such rule or
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regulation. Wit Group shall pay to E Group, in addition to the selling
concession paid pursuant to Section 6 hereof, an incremental **** percent
(****%) of the selling concession that would otherwise be attributable to such
allocated securities.
(c) MARKET MAKING. Except for shares already covered by
Section 7(a) and (b) above, E Group shall use commercially reasonable efforts to
direct all secondary market orders with respect to each security for which Wit
acts as market maker, to Wit Group from the time that Wit notifies E Group that
it is properly registered and prepared to commence making a market in such
security until Wit Group ceases making a market in such security. Except for
shares already covered by Section 7(a) and (b) above, Wit Group shall pay to E
Group a trading flow rebate (currently $**** per share for all shares directed
to Wit Group (the "Blended Rate)). The parties agree to review the Blended Rate
at least quarterly and to negotiate in good faith adjustments to the Blended
Rate to ensure that the Blended Rate remains competitive with the highest
trading flow rebate or other consideration received by E Group for similar types
and sizes of orders from the two market makers, electronic communication
networks, securities exchanges or other securities trading markets other than
Wit Group ("Market Centers") to which E Group routes the largest and second
largest number of secondary market orders for execution during the immediately
preceding quarter. Notwithstanding anything herein to the contrary, E Group and
Wit Group understand and agree that (i) no provision of this Agreement shall
restrict the other, in its reasonable good faith judgment, from taking, without
liability to the other, any action required by any rule or regulation of the
SEC, any self-regulatory organization or any governmental entity to which it is
subject, or from complying with any fiduciary duties to its customers, provided
that it shall, prior to taking such action, to the extent reasonably feasible in
light of the then circumstances, notify the other of such action prior to, or
within a reasonable time after taking such action, and (ii) following the thirty
(30) month anniversary of the effective time of the Merger, E Group or Wit Group
may each release itself thereafter from the obligations under this Section 7(c)
upon 180 days' written notice to the other.
(d) CORRESPONDENT ORDERS. The phrase secondary market orders
as used in this Section 7, shall not include orders placed by customers of third
parties unaffiliated with E Group who introduce orders to E Group pursuant to a
correspondent clearing arrangement between such third parties and E Group if E
Group receives direction by the correspondent to place such order through
another Market Center.
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(e) TRADE INFORMATION. Subject to Section 9(a), Wit Group
shall forward to E Group no less than monthly, information, in a mutually agreed
upon format, requested by E Group that will assist E Group in analyzing the
execution quality of secondary market orders directed to Wit Group in accordance
with this Section 7. Such information shall include transaction order files that
provide an audit trail for each secondary market order, including the time the
order was received by Wit Group, the time of execution, relevant quotation
information and other information that E Group reasonably requests. Wit Group
agrees to provide reports to E Group that permit E Group to analyze the elements
of secondary market order execution quality, including but not limited to, price
improvement/disimprovement, execution speed, liquidity enhancement and
auto-execution.
8. SALES AND MARKETING; PRIORITY STATUS.
(a) GENERAL. Wit Group and E Group shall each create and
develop advertising and marketing products and materials, and shall engage in
mutually agreed upon co-branding activities, to promote the strategic alliance
between the parties, which shall include the display of Wit's logos and brand
names, including Vostock, on the E*TRADE web site, and E*TRADE's name and logos
on the Wit Group web site, in each case as appropriate (in the reasonable
discretion of E*TRADE or Wit, as applicable) for the location on the website, at
no charge to the other party. The parties hereto shall negotiate in good faith
the terms and conditions of an agreement covering other advertising and
marketing, web site presentation, potential new product development and customer
presentation, all as related to the ongoing business activities between the
parties contemplated by this Agreement. Following execution of this Agreement,
the parties shall designate appropriate representatives of their organizations
to engage in such negotiations and to establish a timetable therefor; it being
the intent of the parties to enter into such agreement as soon as reasonably
practicable. Wit Group and E Group shall conduct their joint advertising and
marketing activities in coordination with and subject to the approval of the
other party and in a manner consistent with applicable NASD rules, securities
regulations and other applicable laws.
(b) APPROVALS. Any use by Wit Group of any E Group trademark,
license or tradename in any sales, marketing or advertising-related materials,
including without limitation, press releases, marketing literature, print
advertisements and commercials, must be approved by the Chief Marketing Officer
of E*TRADE or such other person as E*TRADE duly authorizes and designates to Wit
Group in writing (which approval shall not be unreasonably withheld). Any use
14
by E Group of any Wit Group trademark, license or tradename in any sales,
marketing or advertising-related materials, including without limitation, press
releases, marketing literature, print advertisements and commercials, must be
approved by the Senior Vice President of Marketing of Wit or such other person
as Wit duly authorizes and designates to E Group in writing (which approval
shall not be unreasonably with held). Wit Group and E Group shall use
commercially reasonable efforts to imple ment and maintain sales support
capability for the purpose of offering and selling Wit Group's products and
services to E Group's customers.
(c) PRIORITY STATUS. E Group agrees that with respect to
investment funds managed by Wit Group or one of its Affiliates, it shall
provide a priority status for such products compared to other competitor's
products that E Group is distributing at the same time.
9. ACCOUNT DATA
(a) ACCESS TO DATA. Prior to the occurrence of a Performance
Failure or any other default by Wit Group of its obligations under this
Agreement and subject to applicable law, regulatory requirements and E*TRADE's
customer privacy policies, E Group shall share demand data, trading data and
other customer account data as shall be determined by the parities for all
retail customer accounts to which shares are allocated form Wit Group. Wit Group
shall share such share demand data, trading data and other customer account data
as shall be determined by the parties. Any such data shall be made available in
an aggregated format such that individual account information is not made
available to the other party.
(b) PRIVACY OF CONSUMER FINANCIAL INFORMATION. Wit Group and E
Group are mindful of the interests of customers and consumers in privacy of
their financial information. Accordingly, performance of the parties obligations
under this Agreement shall be made in conformity with Regulation S-P of the SEC
and other applicable privacy regulations. The parties agree that it is their
intent in the performance of their obligations under this Agreement and in the
sharing of customer and consumer financial information to utilize the exceptions
for sharing of information afforded by sections 9, 10 and 11 of Regulation S-P.
10. RESEARCH PRODUCTS
Wit Group shall provide any and all research products in
connection with the operation of the underwriting, investment banking and
financial services business of Wit Group (to a comparable extent as the written
research products
15
provided to Wit Group's institutional clients, subject to the last sentence of
this paragraph) to E Group for the benefit and use by the retail customers of E
Group, subject to E Group's reasonable discretion and at no cost or expense to E
Group or its Affiliates or such retail customers. E Group and Wit Group will
cooperate with each other to develop promptly after the closing of the Merger
the regulatory and technological processes and mechanisms for providing such
research to retail customers of E Group at the same time as it is provided to
institutional clients of Wit Group, reflecting the parties' intent to place
retail and institutional recipients of such research products in the same
position from a time perspective. Wit Group shall cooperate with E Group to
develop such research products for the tailored use by retail customers, making
such adjustments and modifications as are reasonably necessary. Wit Group shall
not distribute any such research products to Competitors of E Group without
E*TRADE's prior written consent. "Competitors" shall mean direct competitors in
the online brokerage industry including, but not limited to, Xxxxxxx Xxxxxx,
Xxxxxxx Xxxxx, Ameritrade and TD Waterhouse. Wit Group shall be able to
distribute its research products through all other distribution channels and
independent sources of research content; provided, however, that in providing
any such research products, Wit Group shall work with E Group to develop
differences in the delivery of content thereof in order to provide the customers
of E Group with a meaningful advantage.
11. COMMITMENT COMMITTEES.
Prior to the expiration of the Exclusivity Right and provided
that E Group is not then in default of any of its material obligations under
this Agree ment, subject to appropriate confidentiality provisions, E Group
shall be entitled to participate in all meetings of Wit Group's commitment
committees and shall receive all notices and materials provided to members of
such committees at the same time as they are provided to other members of such
committees.
16
12. BOARD REPRESENTATION.
Prior to the occurrence of a Change of Control of E*TRADE and
provided that E Group is not then in default of any its material obligations
under this Agreement, and that either (a) E*TRADE continues to own at least 50%
of the sum of (i) the number of shares of Common Stock of Wit (adjusted for
stock splits and similar events) that it receives pursuant to the Merger and
(ii) the Alliance Shares it receives pursuant to the terms of this Agreement or
(b) the Exclusivity Right is then in effect; (i) E Group shall be entitled to
designate for nomination one representative of E Group reasonably acceptable to
Wit Group as a director of Wit Group (and Wit Group and its Board of Directors
shall recommend and nominate for election of, and solicit votes in favor of
election of, such nominee to the Board) and (ii) General Atlantic Partners, LLC
shall be entitled to designate for nomination one representative of General
Atlantic Partners, LLC reasonably acceptable to Wit Group as a director of Wit
Group (and Wit Group and its Board of Directors shall recommend and nominate for
election of, and solicit votes in favor of election of, such nominee to the
Board). It shall be deemed reasonably acceptable to Wit Group for E Group and
General Atlantic Partners, LLC to designate for nomination the chief executive
officer of E Group and a managing member of General Atlantic Partners, LLC,
respectively. Wit Group shall use its reasonable best efforts to cause such
designees to be elected to its Board of Directors.
13. INTERNATIONAL ALLIANCE.
Wit Group and E Group agree that Wit Group, whether directly
or through its affiliates, shall have a non-exclusive right to distribute its
equity security offerings originating in foreign countries through E Group, its
subsidiaries and affiliates, on economic terms that are customary for similar
arrangements in such countries or if no such custom exists, substantially
similar to those applicable to comparable transactions in the United States,
except to the extent that E Group or such subsidiary or affiliate is subject, as
of the date of this Agreement, to a contractual obligation that prevents it
from entering into such an arrangement and such obligation has not been
terminated. Wit Group and E Group shall use commercially reasonable efforts to
negotiate an extension of the exclusivity provisions of the strategic alliance
contemplated by this Agreement to the comparable activities of Wit Group and E
Group in countries other than the United States in which they now or in the
future might operate. In addition, E Group shall make a good faith effort to
include Wit Group in offerings of issuers organized outside the United States
with respect to securities offered and sold within the United
17
States if the relevant per unitselling concession or similar economic
consideration payable to E Group (after the potential inclusion of Wit Group in
a particular offering) with respect to its United States sales is no less than
that otherwise available to E Group. Notwithstanding the foregoing, this
Agreement shall not prohibit E Group from either directly or indirectly
engaging in such transactions.
14. BUSINESS NAME.
Simultaneously with, or immediately following, the closing of
the Merger, Wit shall, and shall cause Wit SoundView Corp., as the successor to
E*OFFERING Corp. to unconditionally and irrevocably (i) forever set aside, and
permanently discontinue any and all use in and to (and shall not assign,
transfer or deliver to any third party, other than E*TRADE) the "E*OFFERING"
corporate and trade name, and the E*OFFERING logo, or any part or combination of
the "E*OFFERING" corporate and trade name, and the E*OFFERING logo, (ii) forever
set aside, and permanently discontinue any and all use in and to, (and shall not
assign, transfer or deliver to any third party, other than E*TRADE) the
E*OFFERING website address, and (iii) destroy all documents, business stationery
and cards, marketing literature, print advertisements, recordings and other
physical indicia or embodiments of the "E*OFFERING" name or logo (provided that
Wit Group shall be entitled to retain a copy of all books and records necessary
for tax, accounting and corporate record keeping for non-commercial purposes).
15. CHANGE IN CONTROL.
(a) CHANGE IN CONTROL OF E*TRADE. In the event of any
Change in Control of E*TRADE during any period in which the Exclusivity Right
is in effect and the Person who acquires control of E*TRADE or is its
successor either breaches its obligations as the successor to E Group or does
not honor the Exclusivity Right (or, in the case of a Person who acquires
control of E*TRADE, fails to provide contractual assurances that it will
cause E Group to honor the Exclusivity Right or satisfy such obligations)
(all such Persons and successors collectively being referred to as the "E
Group Successor") or materially breaches its obligations under Section 3 of
this Agreement, (i) Wit Group shall continue to have the right (on a
non-exclusive basis) to provide to E Group securities of all types for
offering by E Group to its retail customers under the terms of this Agreement
for a period of two years following such Change in Control as if the E Group
Successor were E Group, but shall no longer be obligated to offer all of its
Retail Securities (other than Excluded Securities) exclusively to customers
of E Group and will no longer be the exclusive provider of Retail Securities
to customers of the Successor; (ii) E Group or the
18
E Group Successor shall pay to Wit the E Group Liquidated Damages Amount as
liquidated damages and not as a penalty, in either (A) United States dollars or
(B), subject to the following sentence, at its option, in the same nature, form
and value as the consideration received by E*TRADE in the Change in Control
transaction, if any, and (iii) Wit shall be entitled to transfer to it, free and
clear of all liens, encum brances and claims, title to all shares of common
stock of Wit remaining at such time in the escrow established pursuant to
Section 4.2 of the Merger Agreement. In lieu of accepting the same consideration
that E*TRADE received in such Change in Control transaction, Wit Group may elect
to receive up to that number of Wit Shares then held by E Group equal in value
to the E Group Liquidated Damages Amount. Any consideration other than cash must
be freely transferable, free and clear of all liens, encumbrances, restrictions
and claims, so that Wit Group may immediately convert such consideration (other
than Wit Shares) into cash. Value for such consideration shall be the Closing
price for the primary trading session on the primary market for such security on
the last business day immediately preceding payment to Wit Group; PROVIDED,
HOWEVER, that the value per share of Wit Common Stock shall not be less than
$10.25 (as adjusted for stock splits and similar changes in capitalization). The
option of paying the E Group Liquidated Damages Amount in other than cash
applies only when such consideration involves fully registered and freely
marketable common or preferred stock. The "E Group Liquidated Damages Amount"
means the sum of $120,000,000, reduced by $3,333,333 at the end of each calendar
month, commencing the month in which the Merger Closing occurs and continuing
until the E Group Liquidated Damages Amount equals $80,000,000.
(b) CHANGE IN CONTROL OF WIT. In the event of a Change in
Control of Wit during any period in which the exclusivity rights of E Group are
in effect and the Person who acquires control of Wit or is its successor either
breaches its obligations as the successor to Wit Group or does not assume the
obligations of Wit Group under this Agreement (or, in the case of a Person who
acquires control of Wit Group, fails to provide contractual assurances that it
will cause Wit to satisfy such obligations) (all such Persons and successors
collectively being referred to as the "Wit Group Successor") or materially
breaches its obligations under Section 3 of this Agreement (i) Wit or the Wit
Group Successor shall continue to offer (on a non-exclusive basis) securities to
customers of E Group through E Group, and E Group shall no longer be obligated
to utilize the Wit Group Successor as its exclusive provider of Retail
Securities for offering and sale to customers; and (ii) the Wit Group Successor
shall pay to E*TRADE the Wit Group Liquidated Damages Amount as liquidated
damages and not as a penalty, in either (A) United States
19
dollars or (B), subject to the following sentence, at its option, in the same
nature, form and value as the consideration received by Wit in the Change in
Control transaction, if any, and (iii) E*TRADE shall be entitled to transfer to
it, free and clear of all liens, encumbrances and claims, of title to it to all
shares of Common Stock of Wit that it beneficially owns remaining at such time
in the escrow established pursuant to Section 4.2 of the Merger Agreement. Any
consideration other than cash must be freely transferable, free and clear of all
liens, encumbrances, restrictions and claims, so that E Group may immediately
convert such consideration into cash. Value for such consideration shall be the
closing price for the primary trading session on the primary market for such
security on the last business day immediately preceding payment to E Group. The
option of paying the Wit Group Liquidated Damages Amount in other than cash
applies only when such consider ation involves fully registered and freely
marketable common or preferred stock. The "Wit Group Liquidated Damages Amount"
means the sum of $75,000,000, reduced by $2,083,333 at the end of each calendar
month, commencing the month in which the Merger Closing occurs and continuing
until the Wit Group Liquidated Damages Amount equals $50,000,000.
(c) Payment of the E Group Liquidated Damages Amount and the
transfer of the shares of Wit common stock referred to in Section 15(a)(iii)
shall constitute the sole and exclusive remedy of Wit with respect to any Change
in Control of E*TRADE or its subsidiaries. Payment of the Wit Group Liquidated
Damages Amount shall constitute the sole and exclusive remedy of E*TRADE with
respect to any Change in control of Wit Group or its subsidiaries. The parties
hereto expressly agree that they have arrived at the foregoing amounts as
reasonable estimates of their total damages in light of their inability to agree
on the amount of actual damages each would incur in the event of a breach or
non-assumption by the other party following a Change in Control of such other
party and their agreement that it would be extremely difficult to determine such
damages at the time in light of the consideration being paid in connection with
this Agreement, the scope of their business relationship, the exclusive nature
of a portion of their business relationship, the creation of goodwill and the
dynamic nature of the businesses they are in.
16. DISPUTE RESOLUTION.
(a) DISPUTES. If despite the use of all reasonable efforts by
Wit Group and E Group, they are unable to resolve any disagreement, dispute,
controversy or claim arising under or related to this Agreement (a "Dispute")
under or regarding this Agreement relating to the Strategic Alliance, either Wit
Group or E Group may, at
20
any time and from time to time, provide written notice to that effect to the
other with a reasonably complete description of the nature of the Dispute,
whereupon the Chief Executive Officers of each of Wit and E*TRADE shall
themselves use all commercially reasonable efforts to reach agreement or
resolve such Dispute. If such Dispute remains unresolved after the 30th day
after receipt by Wit or E*TRADE of such notice, either party may refer such
Dispute to binding arbitration pursuant to Section 16(b). In the case of a
Dispute consisting of failure to reach agreement on a Dispute, the arbitrator(s)
shall select from among the courses of action or inaction proposed by each party
that course of action which the arbitrator(s) believe would best further the
objective of this Agreement. In the case of a Dispute over the interpretation of
this Agreement, the arbitrator(s) shall rule in accordance with his
interpretation thereof under applicable law.
(b) ARBITRATION. All Disputes and all other disputes and
controver sies of every kind and nature between the parties hereto arising out
of or in connec tion with this Agreement as to the construction, validity,
interpretation or meaning, performance, non-performance, enforcement, operation,
or breach, shall, after the procedures required by Section 16(a) above, be
submitted to arbitration pursuant to the following procedures in accordance with
the provisions of the NASD Code of Arbitration Procedures.
(c) DISPUTES OVER THE DETAILS OF IMPLEMENTATION. The Parties
recognize that the precise terms of the contemplated marketing agreement
referred to in Section 8(a) and the basis of exclusivity for private placements
referred to in Section 4(e) have not been determined, and that in negotiating
such terms disagree ments will inevitably occur. To assure that these
disagreements do not delay or hinder the strategic alliance, the parties agree
that any disagreement over the details of negotiations of such matters shall be
decided by a committee initially consisting of Xxxxxxxx X. Xxxxxxxx, the
designee of E*TRADE, Xxxxxx X. Xxxxxxxxxx, the designee of Wit Group and Xxxxxxx
Xxxx, the designee of General Atlantic Partners, LLC (the "Committee"). All
decisions of this Committee shall be by majority vote and shall be binding on
each party; provided, however, that if there is a change in the identity of the
Wit Group representative that is not consented to by the E Group representative,
then all decisions of the Committee must be unanimous. Either party may bring a
disagreement to the Committee and the Committee shall meet in person or by
telephone to resolve the disagreement within ten business days of written
notification to the members of the Committee that a dispute exists. All
decisions must be made within ten business days of such meeting.
21
Each party recognizes that the members of the Committee are
subject to multiple conflicts of interest, and each hereby waives such conflicts
and agrees to indemnify each member to the fullest extent permitted by Delaware
law as if such member were acting as a director of such party at all times. If
any of the designated parties resigns from or is otherwise unable to serve on
the Committee, the remaining members of the Committee shall choose a successor
from a list of three names submitted by the employer of the member that is no
longer serving, at least one of whom must be the CEO or comparable executive for
that entity.
17. SUBLEASE.
E Group and Wit shall enter into non-binding negotiations for
the possible sublease of a mutually agreed portion of the property located at
000 Xxxxxxxx, Xxx Xxxxxxxxx, XX 00000.
18. TERM; TERMINATION.
(a) TERM. The term of this Agreement shall remain in effect
until the fifth anniversary of the Start Date, unless terminated earlier in
accordance with the terms of this Agreement. On or after the fourth anniversary
of the closing of the Merger, the Agreement shall be automatically renewed on a
daily basis unless and until nine (9) months notice of cancellation is provided
by either party to the other party. Notice of cancellation pursuant to the
preceding sentence may be given at any time during the term of this Agreement.
(b) AUTOMATIC TERMINATION. This Agreement shall be
automatically terminated if either the Merger Agreement or the Account Transfer
Agreement is terminated in accordance with their respective terms. In the event
of such early termination of this Agreement, the rights and obligations of the
respective parties under this Agreement shall terminate and be of no further
force or effect.
(c) TERMINATION FOR BREACH. This Agreement may be terminated
at any time by (i) Wit Group, on the one hand, or by E*TRADE on the other hand,
if there shall have been a material breach of any of the covenants or agreements
set forth in this Agreement on the part of E Group (in the case of termination
by Wit Group) or on the part of Wit Group (in the case of termination by E
Group), which breach shall not have been cured within thirty (30) business days
following receipt by the breaching party of written notice of such breach from
the other and a determination through the last step of the dispute resolution
process taken that such
22
party has materially breached the Agreement and has not cured such breach or
(ii) by Wit, on the one hand, or by E*TRADE on the other hand in the event that
the NASD, the Securities Exchange Commission or any other regulatory body,
places a material restriction on the business of the other that materially
limits the other's ability to perform its obligations hereunder.
19. LETTER OF INTENT.
The binding letter of intent dated January 12, 2000 between
E*OFFERING Corp. and E*TRADE (the "Letter of Intent") shall be deemed terminated
and superceded in its entirety by this Agreement upon the closing of the Merger.
Notwithstanding anything to the contrary in this Agreement, the Letter of Intent
shall remain in full force and effect until the closing of the Merger and the
performance by E Group of its obligations pursuant to the Letter of Intent shall
not be deemed to be a breach by E Group of its obligations set forth in this
Agreement, including without limitation, the exclusivity provision set forth in
Section 3 hereof.
20. RIGHT OF INSPECTION; REPORTS.
(a) RIGHT OF INSPECTION. At all reasonable times during the
term of this Agreement, E Group and Wit shall each have the right to inspect and
copy, through its duly authorized representatives, books, records and accounts
of the other in order to determine compliance by the other with the terms and
conditions of this Agreement.
(b) YEARLY REPORTS. During the terms of this Agreement, each
party shall deliver to the other, within thirty (30) calendar days after the end
of each calendar year, a report (a "Yearly Report") certified by its chief
financial officer of setting forth the following information:
(i) statistical data relating to the performance by
it of its agreements hereunder;
(ii) statistical data relating to the compliance by
it with its exclusivity requirements set forth in Section 3; and
(iii) a schedule of every public offering, private
placement or other securities offering in which it or any of its
Affiliates participated in as an underwriter, placement agent,
broker-dealer, selling group member,
23
distributor or otherwise, including whether it acted in the capacity of
lead managing or co-managing underwriter (collectively, the "Compliance
Statistics").
(c) QUARTERLY REPORTS. During the term of this Agreement, each
party shall deliver to the other within twenty (20) calendar days after the end
of each of the first three calendar quarter of each calendar year, a report (a
"Quarterly Report") certified by its chief financial officer setting forth the
Compliance Statistics.
(d) CONFIDENTIALITY OF REPORTS. Except as otherwise required
by law, by governmental or regulatory authorities, or in response to court
order, or upon the prior written consent of a party, all non-public information
included in all Yearly Reports and Quarterly Reports shall be kept confidential
by the other and its directors, officers, employees, agents and
representatives, shall not be disclosed to any other person or entity, and shall
only be used for the purposes provided herein.
21. MISCELLANEOUS.
(a) NOTICES. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, one (1) day after delivery to a reputable overnight
courier service (charge prepaid) for overnight delivery to the recipient, three
(3) days after deposit with the U.S. Postal Service for mailing to the recipient
by certified or registered mail, return receipt requested and postage prepaid,
or when transmitted by facsimile (with request for immediate confirmation or
receipt in a manner customary for communications of such type and with physical
delivery of the communication being made by one of the other means specified in
this Section as promptly as practicable thereafter to the following addresses,
respectively, or to such alternative address as either party may furnish in
writing to the other from time to time:
If to E*TRADE or E Group: If to Wit or Wit Group:
E*TRADE Group, Inc. Wit SoundView Group, Inc.
0000 Xxxxxxxx Xxxxx 000 Xxxxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000 Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxxxx Attn: Xxxx X. Xxxxx
with a copy (for legal notices) to: with a copy (for legal notices) to:
24
Xxxxxxx, Phleger & Xxxxxxxx LLP Wit SoundView Group, Inc.
Two Embarcadero Place 826 Broadway
0000 Xxxx Xxxx Xxx Xxxx, Xxx Xxxx 00000
Xxxx Xxxx, XX 00000-0000 Attn: Xxxxx X. Xxxxxx, Esq.
Attn: Xxxxxx X. Mo, Esq. Fax: (000) 000-0000
Fax: (000) 000-0000
(b) SUCCESSORS AND ASSIGNS. This Agreement may not be assigned
or delegated, in whole or in part, by any party hereto without the prior written
consent of the other party hereto; provided, however, that this Agreement may be
assigned to a successor or acquiring entity without such consent in the event of
a Change in Control of the assigning party. Subject to the foregoing, this
Agreement shall be binding upon the inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
(c) SEVERABILITY. In the event that any provision of this
Agreement shall be declared invalid or unenforceable by a court of competent
jurisdiction in any jurisdiction, such provision shall, as to such jurisdiction,
be ineffective to the extent declared invalid or unenforceable without affecting
the validity or enforceability of the other provisions of this Agreement, and
the remainder of this Agreement shall remain binding on the parties hereto.
(d) SECTION HEADINGS. Section heading in this Agreement are
inserted for convenience of reference only, and shall not affect the
interpretation of this Agreement.
(e) GOVERNING LAWS. This Agreement shall in all respects be
con strued in accordance with and governed by the laws of the State of New York
without regard to the conflicts or choice of law provisions thereof. Each of the
parties hereto irrevocably consents to the exclusive jurisdiction of any court
located within the State of California or the State of New York, in connection
with any matter based upon or arising out of this Agreement or the matters
contemplated herein, agrees that process may be served upon them in any manner
authorized by the laws of the State of California or the State of New York for
such persons and waives and covenants not to assert or plead any objection that
they might otherwise have to such jurisdiction and such process.
(f) ENTIRE AGREEMENT. This Agreement (including the exhibits
hereto and the documents and instruments referred to herein) contains the entire
agreement and understanding of the parties with respect to the subject matter
hereof and
25
supersedes all prior written or oral agreements and understandings with respect
thereto.
(g) AMENDMENTS; WAIVERS. This Agreement may not be changed,
amended, terminated, augmented, rescinded, or discharged (other than by perfor
xxxxx), in whole or in part, except by a writing executed by the parties hereto,
and no waiver of any of the provisions or conditions of this Agreement or any of
the rights of a party hereto shall be effective or binding unless such waiver
shall be in writing and signed by the party claimed to have given or consented
thereto. Except to the extent that a party hereto may have otherwise agreed in
writing, no waiver by that party of any condition of this Agreement or breach by
the other party of any of its obligations or representations hereunder or
thereunder shall be deemed to be a waiver of any other condition or subsequent
or prior breach of the same or any other obligation or representation by the
other party, nor shall any forbearance by the first party to seek a remedy for
any noncompliance or breach by the other party be deemed to be a waiver by the
first party of its rights and remedies with respect to such noncompliance or
breach.
(h) REPRESENTATIONS AND WARRANTIES. E*TRADE hereby represents
to Wit that that all of the statements contained in Annex B to this Agreement
are true and correct as of the date of this Agreement (or, if made as of a
specified date, as of such date).
(i) COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and both of which
together shall be considered one and the same Agreement.
(j) MUTUAL COOPERATION. The parties shall cooperate in good
faith and take such other commercially reasonable actions as are reasonably
necessary to effect the intents and purposes of this Agreement and the strategic
alliance contemplated hereby.
26
IN WITNESS WHEREOF, the parties hereto have caused this
Strategic Alliance Agreement to be duly executed and delivered on its behalf as
of the date first written above.
E*TRADE GROUP INC. WIT SOUNDVIEW GROUP, INC.
By: _____________________________________ By: ____________________________
Name: Name:
Title: Title:
27
ANNEX A
FORM OF WARRANT
28
ANNEX B
REPRESENTATIONS AND WARRANTIES OF E*TRADE
Capitalized terms used in this Annex B but not otherwise defined in the
Agreement shall have the meanings set forth in the Merger Agreement.
1. AUTHORIZATION; VALIDITY OF AGREEMENT.
E*TRADE has full corporate power and authority to execute and deliver this
Agreement, and to consummate the transactions contemplated hereunder. The
execution, delivery and performance by E*TRADE of this Agreement, and the
consummation by it of the transactions contemplated hereby have been duly
authorized by the Board of Directors of E*TRADE and no other corporate action
on the part of E*TRADE is necessary to authorize the execution and delivery
by E*TRADE of this Agreement or the consummation by E*TRADE of such
transactions. This Agreement has been duly executed and delivered by E*TRADE
and, assuming due and valid authorization, execution and delivery thereof by
Wit, this Agreement is the valid and binding obligations of E*TRADE
enforceable against E*TRADE in accordance with its terms.
2. CONSENTS AND APPROVALS; NO VIOLATIONS.
Except for the filings, permits, authorizations, consents and approvals as
may be required under, and other applicable requirements of, the Advisers
Act, the Exchange Act, the Securities Act, the rules and regulations of the
NASD, the HSR Act, state securities or Blue Sky laws, Delaware Law and
California Law, none of the execution, delivery or performance of this
Agreement by E*TRADE, the consummation by E*TRADE of the transactions
contemplated hereby or compliance by E*TRADE with any of the provisions
hereof shall (i) conflict with or resulting any breach of any provision of
the Certificate of Incorporation, the Bylaws or similar organizational
documents of E*TRADE, (ii) require any filing with, or permit, authorization,
consent or approval of, any Governmental Entity, (iii) result in a violation
or breach of, or constitute (with or without due notice or the passage of
time or both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration) under any of the terms, conditions or
provisions of any material agreement or contract to which E*TRADE is a party
(the "E*TRADE Agreements"), or (iv) violate any order, writ, injunction,
decree, statute, rule or
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regulation applicable to E*TRADE, any to which E*TRADE is a party or by which
any of the assets of it is bound, excluding from the foregoing clauses (ii),
(iii) and (iv) such violations, breaches or defaults which would not,
individually or in the aggregate, have a material adverse effect on E*TRADE and
its Subsidiaries, taken as a whole. There are no third party consents or
approvals required to be obtained under any of E*TRADE Agreements prior to the
consummation of the transactions hereunder, except for such consents and
approvals the failure of which to be obtained would not, individually or in the
aggregate, have a material adverse effect on E*TRADE and its Subsidiaries, taken
as a whole.
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