EXHIBIT 10.14
CONFIDENTIAL TREATMENT
AMENDED AND RESTATED STRATEGIC ALLIANCE AGREEMENT
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 agreements
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 maintained
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 Agreement,
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 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
Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *****. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
CONFIDENTIAL TREATMENT
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 investment 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 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
Depository 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.
***** Confidential treatment has been requested for the redacted portions. The
confidential redacted portions have been filed separately with the Securities
and Exchange Commission.
2.
CONFIDENTIAL TREATMENT
(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
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.
***** Confidential treatment has been requested for the redacted portions. The
confidential redacted portions have been filed separately with the Securities
and Exchange Commission.
3.
CONFIDENTIAL TREATMENT
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 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
4.
CONFIDENTIAL TREATMENT
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 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.
(b) 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
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
5.
CONFIDENTIAL TREATMENT
agreements, one for each and every political subdivision 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 enforced in such a proceeding. The parties intend to have
covenants enforceable 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).
(c) Additional Consideration. At or prior to the Closing under the
Account Transfer Agreement, Wit Group shall issue to E*TRADE, (i) four million
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 substantially in the form set forth in Exhibit A to the Merger Agreement
providing for a thirty-six month prohibition on transfer.
6.
CONFIDENTIAL TREATMENT
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.
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 securities 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.
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
***** Confidential treatment has been requested for the redacted portions. The
confidential redacted portions have been filed separately with the Securities
and Exchange Commission.
7.
CONFIDENTIAL TREATMENT
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.
(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.
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
***** Confidential treatment has been requested for the redacted portions. The
confidential redacted portions have been filed separately with the Securities
and Exchange Commission.
8.
CONFIDENTIAL TREATMENT
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-allotment option) offered to
the public in such offering.
(a) Minimum Payments on Co-Managed Deals. With respect to each and
------------------------------------
every Registered Offering in which Wit Group is a co-managing underwriter, 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).
(b) 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 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 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.
(c) 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.
***** Confidential treatment has been requested for the redacted portions. The
confidential redacted portions have been filed separately with the Securities
and Exchange Commission.
9.
CONFIDENTIAL TREATMENT
(d) 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 ***** 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
adjustment 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
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. 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
***** Confidential treatment has been requested for the redacted portions. The
confidential redacted portions have been filed separately with the Securities
and Exchange Commission.
10.
CONFIDENTIAL TREATMENT
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.
(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-
***** Confidential treatment has been requested for the redacted portions. The
confidential redacted portions have been filed separately with the Securities
and Exchange Commission.
11.
CONFIDENTIAL TREATMENT
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 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 withheld). Wit Group and E Group shall use commercially reasonable
efforts to implement 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
12.
CONFIDENTIAL TREATMENT
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 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
Agreement, 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.
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
13.
CONFIDENTIAL TREATMENT
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 States if the relevant per unit
selling 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).
14.
CONFIDENTIAL TREATMENT
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 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, encumbrances 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
15.
CONFIDENTIAL TREATMENT
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 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
consideration 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 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
16.
CONFIDENTIAL TREATMENT
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 controversies
-----------
of every kind and nature between the parties hereto arising out of or in
connection 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 disagreements 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.
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
17.
CONFIDENTIAL TREATMENT
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 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
18.
CONFIDENTIAL TREATMENT
(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,
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
19.
CONFIDENTIAL TREATMENT
with a copy (for legal notices) to: with a copy (for legal notices) to:
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 construed
--------------
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 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 performance), 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
20.
CONFIDENTIAL TREATMENT
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.
21.
CONFIDENTIAL TREATMENT
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:
22.
CONFIDENTIAL TREATMENT
ANNEX A
FORM OF WARRANT
23.
CONFIDENTIAL TREATMENT
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 result ing
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 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.
24.
