FIRST AMENDMENT
TO SOFTWARE LICENSE AGREEMENT
April 8, 2002
X.X. Xxxxxx Group Inc. ("XXXXXX") and E*TRADE Group, Inc. ("E*TRADE") hereby
agree to amend the Software License Agreement dated November __, 2000 between
E*TRADE and Xxxxxx (the "SOFTWARE LICENSE AGREEMENT"), effective immediately, as
follows.
The first three sentences of Section 1(a) are deleted and replaced with:
Upon the terms and conditions contained in this Agreement, Xxxxxx
grants to E*TRADE and E*TRADE's Affiliates a limited, worldwide,
perpetual, irrevocable, fully paid-up license to use the Software (as
hereinafter defined) on E*TRADE's and E*TRADE's Affiliate's servers and
to sublicense object code versions of the Software to, and make object
code versions of the Software available through E*TRADE's service
offerings for use only by, Authorized Users. An "Authorized User" is an
E*TRADE customer who has been sublicensed by E*TRADE to use object code
versions of the Software.
Section 1(b) is deleted and replaced with:
The Software will be provided to E*TRADE in object code and source code
versions, along with any documentation related thereto.
Sections 1(d)(i) and 1(d)(iv) are deleted. Section 1(d) is amended to further
include:
To the extent that E*TRADE allows a third party to access source code
included in the Software, such access shall be governed by the
provisions of Section 16.
Section 1(e) is deleted.
Section 1(f) is deleted and replaced with:
E*TRADE acknowledges and agrees that, as between Xxxxxx and E*TRADE,
Xxxxxx owns the Software (including the source code thereof) and the
ideas, methods of operation, processes, know-how and intellectual
property rights, including without limitation, all patent, copyright,
trade secret and trademark rights, associated therewith, as well as any
and all derivative works related thereto created by or on behalf of
Xxxxxx and, other than as expressly set forth in this Agreement,
E*TRADE further acknowledges and agrees that it has no interest
whatsoever therein. Xxxxxx acknowledges and agrees that, as between
Xxxxxx and E*TRADE, E*TRADE owns all derivative works in the Software
(including the source code thereof) created by or on behalf of E*TRADE
and the ideas, methods of operation, processes, know-how and
intellectual property rights, including without limitation, all patent,
copyright, trade secret and trademark rights, associated therewith, as
well as any and all derivative works related thereto created by or on
behalf of E*TRADE and Xxxxxx further acknowledges and agrees that it
has no interest whatsoever therein.
Section 1(g) is deleted.
Section 2(a) is deleted and replaced by:
"Software" includes the object code and source code versions,
as well as any documentation related thereto, of:
(A) the current version of the E*TRADE Pro platform;
(B) the current version of the Xxxxxx UltimateTrader platform;
and
EXECUTION DRAFT
(C) the current version of the Xxxxxx UltimateTrader platform
(which includes such features as Comtex news, hot keys, the
Island and Arca ECN books, order entry window/level II window,
improved chart studies/improved performance, market ticker,
high and low ticker, position ticker and export order status,
as such features currently exist) modified to include the
features and customizations by Xxxxxx for E*TRADE included in
the current version of the E*TRADE Pro platform.
Section 3 is deleted and replaced with:
This Agreement shall become effective as of the date first above
written and shall remain in effect in perpetuity (the "TERM"), unless
earlier terminated in accordance with the provisions of Section 4.
Sections 4(a) and (b) are deleted.
Section 5 is deleted and replaced with:
(a) In consideration for the license and the Transition (as defined
in Section 13 hereof) provided hereby,
(i) Upon delivery of the source code for the customized
version of the UltimateTrader platform provided for
by Section 13(c)(1)(C), E*TRADE will pay Xxxxxx
$1,000,000.
(ii) Upon successful completion of the Transition as
determined in the reasonable judgment of E*TRADE,
E*TRADE agrees to: (i) issue to Xxxxxx $2,400,000 of
shares of the common stock, par value $.01 per share,
of E*TRADE (the "SHARES"), with the number of such
Shares to be issued determined by dividing $2,400,000
by the average closing price for the shares on the
New York Stock Exchange for the ten trading days
prior to the completion of the Transition and (ii)
pay Xxxxxx $1,000,000.
(iii) Any dispute with respect to successful completion of
the Transition as determined in the reasonable
judgment of E*TRADE shall be resolved by arbitration
under the Commercial Rules of the American
Arbitration Association. Three arbitrators shall be
selected. Each party shall select one arbitrator and
the two chosen arbitrators shall select the third
arbitrator or, failing agreement on the selection of
the third arbitrator, the American Arbitration
Association shall select the third arbitrator. Unless
otherwise agreed by the parties, arbitration will
take place in New York City, New York. Any court
having jurisdiction over the matter may enter
judgment on the award of the arbitrator(s).
(iv) Payments made to date (including the payment for
February 2002) made by E*TRADE to Xxxxxx shall not be
refunded.
(b) Investment Representations of Xxxxxx.
Xxxxxx hereby represents and warrants that it is an
accredited investor within the meaning of Regulation
D prescribed by the Securities and Exchange
Commission (the "SEC") pursuant to the Securities Act
of 1933, as amended (the "SECURITIES ACT"), and that
it is acquiring the Shares for investment for its own
account and not with a view to, or for resale in
connection with, any distribution thereof. Xxxxxx
understands that the transaction in which Xxxxxx is
receiving the Shares has not been registered under
the Securities Act, that the Shares must be held
indefinitely unless subsequently registered under the
Securities Act or an exemption from such registration
is available, and that the certificates representing
the Shares shall bear an appropriate legend to such
effect.
(c) Registration Rights with respect to the Shares.
(i) From and after the date that the Shares are issued to
Xxxxxx (the "ISSUE DATE"), E*TRADE agrees to use
reasonable efforts to file a registration statement
(the
2
EXECUTION DRAFT
"REGISTRATION STATEMENT") with the SEC to effect the
registration under the Securities Act of the resale
by Xxxxxx of the Shares (together with any shares of
E*TRADE common stock issued in connection with any
stock dividend, split, combination or
recapitalization on, of or with respect to such
Shares, collectively, the "REGISTRABLE SHARES"), and
to respond promptly to any and all comments made by
the staff of the SEC to such Registration Statement
so as to cause the Registration Statement to be
declared effective by the SEC, subject to the
provisions of subsection (c)(ix) below. E*TRADE will
use reasonable efforts to file the Registration
Statement not later than thirty (30) days after the
Issue Date.
(ii) E*TRADE agrees that the Registration Statement shall
comply in all material respects with the requirements
of the Securities Act and the rules and regulations
of the SEC promulgated thereunder and shall not
contain any untrue statement of a material fact or
omit to state a material fact required to be stated
therein, or necessary to make the statements therein
not misleading. The financial statements of E*TRADE
included in the Registration Statement or
incorporated by reference therein will comply as to
form in all material respects with the applicable
accounting requirements and the published rules and
regulations of the SEC applicable with respect
thereto, and will be prepared in accordance with GAAP
consistently applied during the periods involved
(except as may be otherwise indicated in the
financial statements or the notes thereto or, in the
case of unaudited interim statements, as permitted by
the SEC) and fairly present the financial position of
E*TRADE at the dates thereof and the results of
operations and cash flows for the periods then ended
(subject, in the case of unaudited interim
statements, to immaterial year-end adjustments).
(iii) E*TRADE shall prepare and file with the SEC, as
promptly as is commercially reasonably practicable,
such amendments (including post-effective amendments)
and supplements to the Registration Statement and the
prospectus used in connection with the Registration
Statement as may be necessary to keep the
Registration Statement effective during the
Registration Period, and, during such period, to
comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Shares
covered by the Registration Statement.
(iv) E*TRADE shall furnish to Xxxxxx promptly after the
same is prepared and filed with the SEC, one copy of
the Registration Statement and any amendment thereto
and each preliminary prospectus and each amendment or
supplement thereto; (B) on the date of effectiveness
of the Registration Statement or any amendment
thereto, a notice to Xxxxxx stating that the
Registration Statement or amendment has been declared
effective; and (C) such number of copies of a
prospectus, including a preliminary prospectus, and
all amendments and supplements thereto and such other
documents as Xxxxxx may reasonably request in order
to facilitate the disposition of the Registrable
Shares owned by Xxxxxx.
(v) E*TRADE shall use reasonable efforts to cause all
Registrable Shares to be listed on each national
securities exchange or quotation service on which
securities of the same class or series issued by
E*TRADE are then listed.
(vi) As promptly as practicable after becoming aware of
such event, E*TRADE shall notify Xxxxxx of the
happening of any event, of which E*TRADE has
knowledge, as a result of which the prospectus
included in the Registration Statement, as then in
effect, includes an untrue statement of a material
fact or omission to state a material fact required to
be stated therein or necessary to make the statements
therein not misleading, and use reasonable efforts to
promptly prepare a supplement or amendment to the
Registration Statement to correct such untrue
statement or omission, and deliver such number of
copies of such supplement or amendment to Xxxxxx as
it may reasonably request.
3
EXECUTION DRAFT
(vii) E*TRADE shall use reasonable efforts to prevent the
issuance of any stop order or other suspension of
effectiveness of the Registration Statement, and, if
such an order is issued, to obtain the withdrawal of
such order as soon as practicable (including in each
case by amending or supplementing the Registration
Statement) and to notify Xxxxxx of the issuance of
such order and the resolution thereof, and if the
Registration Statement is supplemented or amended,
deliver such number of copies of such supplement or
amendment to Xxxxxx as it may reasonably request.
(viii) E*TRADE will keep the Registration Statement
effective until the earlier of (A) such date as all
of the Registrable Shares have been resold or (B) two
years from the date such Registration Statement is
declared effective by the SEC (the "REGISTRATION
PERIOD").
(ix) Without limiting the generality of subsections (vi)
and (vii) above, E*TRADE may defer filing of the
Registration Statement or refuse to permit Xxxxxx to
resell any Registrable Shares pursuant to the
Registration Statement at any time if E*TRADE
determines in good faith that such a sale would be in
violation of the requirements of the Securities Act
and the regulations promulgated by the SEC thereunder
or there exists at the time material non-public
information relating to E*TRADE which, in the
business judgment of E*TRADE, should not be
disclosed. E*TRADE shall not under any circumstances
be entitled to exercise its right to defer filing of
the Registration Statement or suspend sales under
this subsection more than two times in any twelve
(12)-month period, and the period during which the
Registration Statement under this subsection may be
withdrawn shall not exceed 90 days each such time.
(x) Xxxxxx agrees that, upon receipt of any notice from
E*TRADE of the happening of any event of the kind
described in (vi), (vii) or (ix) above, Xxxxxx will
immediately discontinue disposition of the
Registrable Shares pursuant to the Registration
Statement until Xxxxxx'x receipt of the copies of the
supplemented or amended prospectus contemplated by
(vi), (vii) or (ix) above, if so directed by E*TRADE,
Xxxxxx shall deliver to E*TRADE or destroy (and
deliver to E*TRADE a certificate of destruction) all
copies in Xxxxxx'x possession, of the prospectus
covering such Registrable Shares current at the time
of receipt of such notice.
(xi) Xxxxxx agrees that E*TRADE shall not be required to
conduct an underwritten offering and that any sales
of Registerable Shares shall be made through E*TRADE
Securities Inc., provided that no commission shall be
payable by Xxxxxx in connection with such sales.
(xii) Xxxxxx, by its acceptance of the Registrable Shares,
agrees to cooperate with E*TRADE as reasonably
requested by E*TRADE in connection with the
preparation and filing of the Registration Statement,
unless Xxxxxx has notified E*TRADE in writing of its
election to waive the obligations of E*TRADE with
respect to the Registration Statement, including
without limitation that (A) Xxxxxx will provide
E*TRADE all information and statements about or
pertaining to Xxxxxx, and shall execute such
documents in connection with such registration as
E*TRADE may reasonably request, on such timely basis
as is reasonably deemed by E*TRADE to be necessary or
appropriate for the Registration Statement or to
comply with applicable requirements of the National
Association of Securities Dealers or other applicable
regulatory requirements, and (B) Xxxxxx will furnish
promptly to E*TRADE in writing all information
required from time to time to be disclosed in order
to make the information previously furnished to
E*TRADE by Xxxxxx not misleading. E*TRADE shall have
no obligation to register the resale of the
Registerable Shares or to cause or maintain the
effectiveness of the Registration Statement unless
Xxxxxx complies with the terms hereof.
(xiii) E*TRADE pay all Registration Expenses (as defined
below) in connection with any registration,
qualification or compliance hereunder, and Xxxxxx
shall pay all Selling
4
EXECUTION DRAFT
Expenses (as defined below) and other expenses that
are not Registration Expenses relating to the
Registrable Shares to be resold by Xxxxxx.
"Registration Expenses" shall mean all expenses,
except for Selling Expenses, incurred by E*TRADE in
complying with the registration provisions set forth
herein, including, without limitation, all
registration, qualification and filing fees, printing
expenses, escrow fees, fees and disbursements of
counsel for E*TRADE, blue sky fees and expenses and
the expense of any special audits incident to or
required in connection with any such registration.
"Selling Expenses" shall mean selling commissions,
underwriting fees, expenses of counsel to Xxxxxx and
stock transfer taxes applicable to the Registrable
Shares.
Section 6(c) is amended by deleting the first sentence thereof and replacing
such first sentence with:
E*TRADE will have sole responsibility for obtaining the third-party
software licenses needed to host the Software specified as follows:
Oracle 8i, BEA Tuxedo, BEA Jolt, Veritas, Sonic Software Sonic MQ,
Rogue Wave Tools.H++, Tools.H++ Professional and Threads.H++.
Section 7 is deleted.
Section 8(c) is deleted and replaced with:
EXCEPT FOR BREACHES OF SECTION 16, NEITHER PARTY SHALL HAVE ANY
LIABILITY WHATSOEVER FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL
DAMAGES ARISING OUT OF OR RELATING TO THE LICENSING, DESIGN,
MANUFACTURE, INSTALLATION OR USE OF THE SOFTWARE, WHETHER DUE TO
NEGLIGENCE OR ANY OTHER CAUSE INCLUDING, WITHOUT LIMITATION, DAMAGES
FOR LOSS OF DATA OR GOODWILL, OR THE COST OF PROCUREMENT OF SUBSTITUE
GOODS. EXCEPT IN THE EVENT OF E*TRADE'S VIOLATION OF XXXXXX'X
INTELLECTUAL PROPERTY RIGHTS IN AND TO THE SOFTWARE (INCLUDING, WITHOUT
LIMITATION, E*TRADE'S WILLFULL BREACH OF THE RESTRICTIONS ON
SUBLICENSING THE SOFTWARE AND E*TRADE'S BREACH OF SECTIONS 1(d), 11 OR
16 HEREOF), EITHER PARTY'S LIABILITY TO THE OTHER FOR ANY CLAIMS
HEREUNDER SHALL BE LIMITED TO THE AGGREGATE CONSIDERATION PAID XXXXXX
BY E*TRADE.
Section 8(d) is deleted.
Section 9 is deleted.
Section 10 is deleted.
Section 11 is deleted and replaced with:
E*TRADE shall not remove or otherwise change any terms of the End-User
Agreement or the copyright notice contained in the Software without the
prior written consent of Xxxxxx, provided that E*TRADE may include in
the Software a copyright notice with respect to any additions to or
modifications of the Software created by or on behalf of E*TRADE.
Notwithstanding the foregoing, the Software shall not feature or
display any trademarks, service marks or trade names of Xxxxxx unless
approved in advance and in writing by E*TRADE.
Section 13(a) is amended to further include:
Xxxxxx shall not be responsible for providing Maintenance and Support
Services in connection with derivative works based on the Software made
by E*TRADE.
Section 13 is amended to further include:
5
EXECUTION DRAFT
(c)
(1) Xxxxxx and E*TRADE shall each use reasonable best efforts to effect
the following transition (the "Transition"):
(A) provide on the date hereof copies of and familiarize
E*TRADE personnel with the source code and operation of the
current version of the E*TRADE Pro platform based on the
Software;
(B) on the date hereof, provide E*TRADE with copies of the
source code of the current version of the Xxxxxx
UltimateTrader platform;
(C) within sixty (60) days of the date hereof, customize the
current version of the UltimateTrader platform (which includes
such features as Comtex news, hot keys, the Island and Arca
ECN books, order entry window/level II window, improved chart
studies/improved performance, market ticker, high and low
ticker, position ticker and export order status, as such
features currently exist) to include those features unique to
the current version of the E*TRADE Pro platform (including
removing Times Ten and replacing it with Oracle) and provide
copies of and familiarize E*TRADE personnel with the source
code and operation of such customized version;
(D) on the date hereof, provide all source code and
documentation related to Super SOES order entry to enable
E*TRADE to implement Super SOES order entry when its back end
is ready; and
(E) to the extent required by E*TRADE, provide those services
necessary to operate the E*TRADE Pro platform (or
UltimateTrader platform, as appropriate) using competent and
qualified personnel, including the data feeds and related
hardware and software.
(2) Until the Transition is completed, Xxxxxx shall continue to provide
the services and access to intellectual property and data feeds
currently provided by Xxxxxx to E*TRADE and its customers and otherwise
as necessary to allow E*TRADE to continue to operate its E*TRADE Pro
platform based on the Software ("TRANSITION SUPPORT"). Transition
Support shall include providing the levels of availability set forth in
Schedule 3. The Transition shall be completed and no further Transition
Support shall be required only when:
(A) E*TRADE is able to operate the customized version of the
UltimateTrader platform (including the data feeds and ticker
plant) at the same level of functionality and performance as
currently provided by Xxxxxx in an E*TRADE or an E*TRADE
authorized third party data center (such as the AT&T
Co-Location center) without assistance from Xxxxxx or
dependence on third-party data feeds to Xxxxxx; and
(B) all of the special features unique to E*TRADE's current
production version of the E*TRADE Pro platform are fully
integrated into the current Xxxxxx production version of the
UltimateTrader platform such that the E*TRADE specific
features run as well as on the current E*TRADE production
version, and the Xxxxxx-specific features run as well as on
the current Xxxxxx production version;
provided that:
(C) E*TRADE shall have 21 business days from the date of
delivery of the source code (as part of a complete CD-ROM
package or via FTP over a web site) for the current version of
the E*TRADE Pro platform to compile such source code to
determine if the resulting object code is equivalent to the
version of object code currently used by E*TRADE; and
(D) E*TRADE shall have 21 business days from the date of
delivery of the source code (as part of a complete CD-ROM
package or via FTP over a web site) for the customized version
of the UltimateTrader platform to perform acceptance tests in
accordance with the criteria set forth in subsections (A) and
(B) above.
6
EXECUTION DRAFT
In each case in subsections (C) and (D) above, unless E*TRADE informs
Xxxxxx within such 21 business day period that such source code is not
acceptable, such source code will be deemed accepted.
(3) For a period of at least six (6) months and until the Transition is
complete; provided that such period shall not exceed twelve (12)
months, E*TRADE shall pay $100,000 per month as follows:
(i) E*TRADE shall pay Xxxxxx'x UltimateTrader
platform data feed vendors directly on behalf of Xxxxxx upon
presentation of invoices by Xxxxxx; then
(ii) E*TRADE shall apply any remaining funds to cover
E*TRADE's costs of implementing Co-Location (as defined
below); then
(iii) E*TRADE shall pay any remaining funds to Xxxxxx
to be applied by Xxxxxx first to paying for costs associated
with Xxxxxx'x technology infrastructure (e.g., servers,
networks, etc.), maintenance, and technical facilities (either
owned or leased) to ensure the delivery of the data feeds and
redundancy necessary to support E*TRADE production trading,
and second to paying the salaries of employees required to
support E*TRADE production trading.
(4) Xxxxxx represents and warrants that the following activities are
all of the principal tasks required to co-locate the communications and
routing equipment necessary to support E*TRADE in the manner in which
Xxxxxx has supported E*TRADE to date ("CO-LOCATION"):
(A) Re-terminating the following circuits inside of the AT&T
Co-Location space in Allen, TX.
(i) NASDAQ T1 circuit from Worldcom (carries Level I,
Level II, and NTDS feeds)
(ii) SIAC T3 circuit from AT&T (carries CQS and CTS
feeds)
(iii) E*Trade T1 circuit.
(B) Connecting the above-listed circuits to a router in the
Co-Location space.
(C) Installing a Sun departmental machine with 4 CPUs (as well
as a back-machine, which also runs the processes that provides
the needed market data for the market feed servers located at
E*Trade's site) to run the ticker plant and distribution
processes in the facility.
(5) The data feeds required to support the UltimateTrader platform are
CQS and CTS (both from Siac), Xxxxx 0, Xxxxx 0 and NTDS (all from
NASDAQ), the Island ECN book and the Arca ECN book. E*TRADE shall apply
for such data feeds within 14 days of the date hereof and use
reasonable best efforts to get them up and running as soon as
reasonably possible.
(6) The parties agree that:
(A) in order to assist in the Transition, E*TRADE will send
one senior Java developer with Swing experience, one senior
Java developer with Oracle or Times Ten database experience,
server experience and some C++ experience, and one senior
developer with real time multi-tasking C++ experience, to work
with Xxxxxx developers during the Transition; and
(B) because the services of personnel with in-depth knowledge
of the operation of the UltimateTrader platform and the
E*Trade Pro platform are essential to competing the
Transition, Xxxxxx will make available the services of each of
Xxxx Xxxxxxxx, Xxxx Xxxxxx, Xxx Xxxxxxx, Xxxxx Xxxxxx, Xxxx
Xxxxxx, Xxxxx Xxxxx and Xxxx Xxxxxx (along with other
necessary Xxxxxx employees) to assist in the Transition and as
required by E*TRADE.
(C) because the services of personnel with in-depth knowledge
of the operation of the E*Trade Pro platform are essential to
completing the Transition, E*TRADE will make available the
7
EXECUTION DRAFT
services of its personnel with the greatest familiarity with
the E*Trade Pro platform (along with other necessary E*TRADE
employees) to assist in the Transition.
(7) Until the Transition is completed, E*TRADE may have an E*TRADE
employee present on the Xxxxxx premises, and such employee shall be
given access to management and all such information or documents as he
or she shall reasonably request, to monitor the progress of the
Transition and the compliance by Xxxxxx with the terms of this
Amendment.
(8) As part of the Transition, Xxxxxx will modify its ticker plant to
allow the use of E*TRADE's existing Bridge data feed to E*TRADE's data
room for providing index quotes and as a back-up for market feeds.
(e) Xxxxxx and E*TRADE agree that E*TRADE shall be entitled to all of
the benefits of 11 U.S.C. Section 365(n) in connection with this
license.
Section 14 is deleted and replaced by:
E*TRADE shall have the right to solicit all of Xxxxxx'x employees;
provided that E*TRADE may not solicit Xxxx Xxxxxxxx, Xxxx Xxxxxx, Xxxxx
Xxxxxx, Xxxxx Xxx Xxxxxx or Xxxxx Xxxx during their employment by
Xxxxxx.
Section 17 is amended to further include:
(d) For purposes of Section 17(a), "Software" shall not include any
modifications to the Software made by E*TRADE. For purposes of Section
17(b), "Software" shall include any modifications to the Software made
by E*TRADE.
Section 18 (m) is deleted and replaced with:
The provisions of Sections 11, 14, 16, 17 and 18 shall survive
termination or expiration of this Agreement.
Schedule 3 (Preferred Escrow Agreement) is deleted and replaced by:
A. Infrastructure Services Availability.
------------------------------------
Xxxxxx will provide the following level of availability for the market
data feeds, connectivity and Xxxxxx technology infrastructure necessary
to support delivery of market data to E*TRADE (the "XXXXXX PLATFORM"):
1. Xxxxxx Platform Availability. During Market Hours (as defined
below), Xxxxxx will provide 99.0% average Xxxxxx Platform availability
in any given month and 99.0% average Xxxxxx Platform availability in
any given calendar quarter (not including Scheduled Xxxxxx Platform
Maintenance). "Xxxxxx Platform availability" will not be affected by
failures of E*TRADE developed applications or E*TRADE's systems, or any
other failures beyond the reasonable control of Xxxxxx. The Xxxxxx
Platform is considered unavailable if a Severity 1 Problem or a
Severity 2 Problem occurs.
2. Definition of Market Hours. "Market Hours" shall mean 8:00 am to
8:00 pm ET on days on which the NASD considers normal operating days.
In the event that those hours of operation are expanded beyond normal
"Market Hours," the parties shall meet in good faith to discuss whether
to make any appropriate modifications.
3. Notification of Scheduled Xxxxxx Platform Downtime. Xxxxxx will
notify E*TRADE of scheduled platform changes a minimum of seventy-two
(72) hours in advance.
B. Response and Resolution Times.
-----------------------------
1. Definitions.
8
EXECUTION DRAFT
* A "Response" is an acknowledgement of a trouble
ticket delivered by E*TRADE to Xxxxxx (a "Trouble Ticket") or a
response initiated by Xxxxxx to E*TRADE in those cases where Xxxxxx
discovers the problem without contact from E*TRADE. Xxxxxx will
proactively escalate problems that are unresolved in accordance with
the intervals of time listed in the escalation chart. To determine
compliance with the Response intervals, a Response shall be deemed to
be provided to E*TRADE when: (1) in response to a Trouble Ticket,
E*TRADE has received a communication (phone or email or page) from
Xxxxxx acknowledging the problem; or (2) Xxxxxx notifies E*TRADE
through phone or email or page contact of such problem, if such problem
was discovered by Xxxxxx or one of its other partners.
* "Resolution" is reached when one or more of the
following actions have occurred: (1) corrective actions by Xxxxxx has
resumed service; (2) further use of the application during the
resolution period does not reproduce the problem (in this case, the
problem is considered closed, but can be reopened should the same
problem occur at a later date); (3) the suspected problem is determined
by Xxxxxx, in its reasonable discretion and evidenced through records,
to be known code restriction, caused by the applications or the
facilities, equipment, and personnel of E*TRADE other than Xxxxxx, its
agents, subcontractors or any third party service provider of Xxxxxx
(in which case, it will no longer be classified as a problem); or (4)
Xxxxxx and E*TRADE mutually agree that the problem is either resolved
or not considered severe.
* A "problem" is a failure of the
Infrastructure Services as described below.
* A "Severity 1 Problem" is a problem that
causes a complete outage of the market data services provided by
Xxxxxx. For example, E*TRADE is unable to retrieve market data at
E*Trade's site. This would be an indication of an outage. This
example must occur multiple times and be reproducible by Xxxxxx
employees
* A "Severity 2 Problem" is a problem that causes a
significant failure or degradation in performance of market data
services provided by Xxxxxx. Examples: (1) delivery of market data
which is delayed more than one second (1 sec) or (2) Xxxxxx code
modules fail to return the correct result. These examples must have
occurred multiple times and be reproducible by Xxxxxx employees.
* A "Severity 3 Problem" is a problem that that
causes a minor portion of an application to run in degraded mode or not
work as expected but has only minimal impact upon the use of the
application. This problem must have occurred multiple times and be
reproducible by Xxxxxx employees.
2. Response and Resolution Times.
Severity 1 Problem:
Response: within fifteen (15) minutes
Resolution: within four (4) hours
Severity 2 Problem:
Response: within thirty (30) minutes
Resolution: within twenty-four (24) hours
Severity 3 Problem:
Response: within one (1) business day
Resolution: within five (5) business days
Although Xxxxxx is under no obligation to resolve non-reproducible
errors, Xxxxxx will respond to any such error in the time-frame set
forth above and will use commercially reasonable efforts in
collaborating with E*TRADE to resolve such non-reproducible error.
3. Escalation Procedures: If Xxxxxx does not respond to requests for
service from E*TRADE within the time frames described above, E*TRADE
may contact Xxxxxx escalation contacts below.
Escalation Level Severity 1 Severity 2 Severity 3
Support Engineer 15 minutes 1 hour 24 hours
Manager 2 hours 4 hours 48 hours
9
EXECUTION DRAFT
Vice President 8 hours 24 hours 96 hours
Severity 1 Update Frequency: Every 30 minutes or as otherwise
agreed to by the parties.
Severity 2 Update Frequency: Every hour during business hours or
as otherwise agreed to by the parties.
Severity 3 Update Frequency: Every business day or as otherwise
agreed to by the parties.
4. Customer Assistance: E*TRADE employees or E*TRADE authorized
independent contractors with sufficient knowledge of the problem must
be available during the Resolution interval to explain and/or describe
the problem if the Xxxxxx staff deems it necessary. Timely resolution
of the problem may require E*TRADE to provide web access logs,
application error logs etc.
E*TRADE GROUP, INC.
By: /s/ Xxxxxx Xxxxxxx
___________________
Name: Xxxxxx Xxxxxxx
_________________
Date: April 8, 2002
__________________
X.X. XXXXXX GROUP INC.
By: /s/ Xxxx X. Xxxxxxxx
___________________
Name: Xxxx X. Xxxxxxxx
_________________
Date: April 4, 2002
__________________
10
