-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A6zlOOiXQFtkNBtY2mfmS7DigVv5O0cGu4wbE6yd7eK5lm0TwhGICTqReoriizej BuH7088I79Vsl/aEjkBAMw== /in/edgar/work/0000950142-00-000875/0000950142-00-000875.txt : 20001026 0000950142-00-000875.hdr.sgml : 20001026 ACCESSION NUMBER: 0000950142-00-000875 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 20001025 GROUP MEMBERS: GAP COINVESTMENT PARTNERS II, L.P. GROUP MEMBERS: GENERAL ATLANTIC PARTNERS 61, L.P. GROUP MEMBERS: GENERAL ATLANTIC PARTNERS LLC GROUP MEMBERS: GENERAL ATLANTIC PARTNERS, LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WIT SOUNDVIEW GROUP INC CENTRAL INDEX KEY: 0001071620 STANDARD INDUSTRIAL CLASSIFICATION: [6211 ] IRS NUMBER: 133900397 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-57679 FILM NUMBER: 745850 BUSINESS ADDRESS: STREET 1: 826 BROADWAY 6TH FL CITY: NEW YORK STATE: NY ZIP: 10003 BUSINESS PHONE: 2122534400 MAIL ADDRESS: STREET 1: 826 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10003 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL ATLANTIC PARTNERS LLC CENTRAL INDEX KEY: 0001017645 STANDARD INDUSTRIAL CLASSIFICATION: [ ] STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 3 PICKWICK STREET 2: 3 PICKWICK PLAZA CITY: GREENWICH STATE: CT ZIP: 08330 BUSINESS PHONE: 2036223050 MAIL ADDRESS: STREET 1: 3 PICKWICK STREET 2: 3 PICKWICK PLAZA CITY: GREENWICH STATE: CT ZIP: 08330 SC 13D 1 0001.txt SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- SCHEDULE 13D Under the Securities Exchange Act of 1934 ----------------------- WIT SOUNDVIEW GROUP, INC. (Name of Issuer) COMMON STOCK, PAR VALUE $0.01 PER SHARE (Title of Class of Securities) 977383108 (CUSIP Number) ------------------ WILLIAM E. FORD C/O GENERAL ATLANTIC SERVICE CORPORATION 3 PICKWICK PLAZA GREENWICH, CONNECTICUT 06830 TEL. NO.: (203) 629-8600 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) ----------------------- OCTOBER 16, 2000 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 1(f) or 1(g), check the following box.|_| Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). ================================================================================ - ---------------------------- ------------------------------ 977383108 PAGE 2 OF 13 PAGES - ---------------------------- ------------------------------ - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON General Atlantic Partners, LLC - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ------------------------------------------------ BENEFICIALLY OWNED 8 SHARED VOTING POWER BY EACH REPORTING PERSON 8,964,186 WITH ------------------------------------------------ 9 SOLE DISPOSITIVE POWER -0- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 8,964,186 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,964,186 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.2% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON OO - -------------------------------------------------------------------------------- - ---------------------------- ------------------------------ 977383108 PAGE 3 OF 13 PAGES - ---------------------------- ------------------------------ - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON General Atlantic Partners 61, L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ------------------------------------------------ BENEFICIALLY OWNED 8 SHARED VOTING POWER BY EACH REPORTING PERSON 8,964,186 WITH ------------------------------------------------ 9 SOLE DISPOSITIVE POWER -0- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 8,964,186 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,964,186 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.2% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN - -------------------------------------------------------------------------------- - ---------------------------- ------------------------------ 977383108 PAGE 4 OF 13 PAGES - ---------------------------- ------------------------------ - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON GAP Coinvestment Partners II, L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ------------------------------------------------ BENEFICIALLY OWNED 8 SHARED VOTING POWER BY EACH REPORTING PERSON 8,964,186 WITH ------------------------------------------------ 9 SOLE DISPOSITIVE POWER -0- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 8,964,186 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,964,186 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.2% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN - -------------------------------------------------------------------------------- - ---------------------------- ------------------------------ 977383108 PAGE 5 OF 13 PAGES - ---------------------------- ------------------------------ Item 1. SECURITY AND ISSUER. ------------------- The title of the class of equity securities of Wit SoundView Group, Inc. (f/k/a Wit Capital Group, Inc.), a Delaware corporation (the "Company"), to which this statement relates is the Company's Common Stock, par value $0.01 per share (the "Common Stock"). The address of the principal executive offices of the Company is 826 Broadway, New York, New York 10003. Item 2. IDENTITY AND BACKGROUND. ----------------------- This statement is being filed by a group, as defined in Rule 13d-5 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended. The members of the group are General Atlantic Partners, LLC, a Delaware limited liability company ("GAP"), General Atlantic Partners 61, L.P., a Delaware limited partnership ("GAP 61") and GAP Coinvestment Partners II, L.P., a Delaware limited partnership ("GAPCO II" and, collectively with GAP and GAP 61, the "Reporting Persons"), all of which are located at 3 Pickwick Plaza, Greenwich, Connecticut 06830. Each of the Reporting Persons is engaged in acquiring, holding and disposing of interests in various companies for investment purposes. The general partner of GAP 61 is GAP. The managing members of GAP are Steven A. Denning, Peter L. Bloom, David C. Hodgson, William O. Grabe, William E. Ford, Clifton S. Robbins, Matthew Nimetz, Franchon M. Smithson, Mark F. Dzialga, Rene M. Kern and John Wong (collectively, the "GAP Managing Members"). Mr. Ford is a director of the Company. The GAP Managing Members are also the general partners of GAPCO II. The business address of each of the GAP Managing Members is 3 Pickwick Plaza, Greenwich, Connecticut 06830, and the present principal occupation or employment of - ---------------------------- ------------------------------ 977383108 PAGE 6 OF 13 PAGES - ---------------------------- ------------------------------ each of the GAP Managing Members is as a managing member of GAP. Each of the GAP Managing Members, other than Messrs. Kern and Wong, is a citizen of the United States. Mr. Kern is a citizen of Germany and Mr. Wong is citizen of Singapore. None of the Reporting Persons and none of the above individuals has, during the last five years, been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction which resulted in such Reporting Person or individual being subject to a judgment, decree or final order finding any violation of federal or state securities laws or enjoining future violations of, or prohibiting or mandating activities subject to, such laws. Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. ------------------------------------------------- Pursuant to an Agreement and Plan of Merger, dated as of May 15, 2000, as amended (the "Merger Agreement"), by and among the Company, Wit SoundView Corporation, a Delaware corporation and a wholly-owned subsidiary of the Company ("Merger Sub"), and E*OFFERING Corp., a California corporation ("E*OFFERING"), E*OFFERING was merged with and into Merger Sub (the "Merger"). GAPCO II and GAP 61 were shareholders of E*OFFERING. At the effective time of the Merger on October 16, 2000, each of GAPCO II and GAP 61 exchanged its shares of Series C Convertible Preferred Stock of E*OFFERING for 1,235,899 and 5,728,287 shares of Common Stock, respectively. Pursuant to the Stock Purchase Agreement, dated as of May 15, 2000 (the "Stock Purchase Agreement"), by and among the Company, E*TRADE Group, Inc. ("E*Trade"), General Atlantic Partners 68, L.P. ("GAP 68"), GAPCO II and GapStar, LLC - ---------------------------- ------------------------------ 977383108 PAGE 7 OF 13 PAGES - ---------------------------- ------------------------------ ("GapStar" and, together with GAP 68 and GAPCO II, the "Purchasers"), the Company agreed to issue and sell to the Purchasers (or their designees), and the Purchasers agreed to purchase from the Company, an aggregate of 2,000,000 shares of Common Stock at a price per share equal to $10.25, for an aggregate purchase price of $20,500,000. Pursuant to the Letter of Agreement, dated October 16, 2000 (the "Letter"), by and among the Company, E*Trade, GAP 68, GapStar, GAP 61 and GAPCO II, GAP 68 and GapStar agreed to assign and transfer all of their rights under the Stock Purchase Agreement to GAP 61 and GAPCO II, and each of GAP 61 and GAPCO II agreed to purchase an aggregate of 1,645,070 and 354,930 shares of Common Stock, respectively, for an aggregate purchase price of $16,861,967.50 and $3,638,032.50, respectively. On October 24, 2000, each of GAP 61 and GAPCO II funded such aggregate purchase price to the Company. The source of funds are contributions from the partners of GAP 61 and GAPCO II. The foregoing summaries of the Merger Agreement, the Stock Purchase Agreement and the Letter are qualified in their entirety by reference to Exhibits 2, 3 and 4 which are incorporated by reference herein. Item 4. PURPOSE OF TRANSACTION. ---------------------- GAPCO II and GAP 61 acquired the shares of Common Stock for investment purposes. From time to time the Reporting Persons may acquire additional shares of Common Stock or dispose of some or all of the shares of Common Stock owned by them. None of the Reporting Persons has any other plans which relate to or would result in any of the items listed in paragraphs (a) through (j) of Item 4. - ---------------------------- ------------------------------ 977383108 PAGE 8 OF 13 PAGES - ---------------------------- ------------------------------ Item 5. INTEREST IN SECURITIES OF THE ISSUER. ------------------------------------ (a) As of the date hereof, GAP, GAP 61 and GAPCO II each owns of record no shares of Common Stock, 7,373,357 shares of Common Stock and 1,590,829 shares of Common Stock, respectively, or 0.0%, 6.7% and 1.5%, respectively, of the Company's issued and outstanding shares of Common Stock. By virtue of the fact that the GAP Managing Members are also the general partners authorized and empowered to vote and dispose of the securities held by GAPCO II, and that GAP is the general partner of GAP 61, the Reporting Persons may be deemed to share voting power and the power to direct the disposition of the shares of Common Stock owned by each of the Reporting Persons. Accordingly, as of the date hereof, each of the Reporting Persons may be deemed to own beneficially an aggregate of 8,964,186 shares of Common Stock or 8.2% of the Company's issued and outstanding shares of Common Stock. (b) Each of the Reporting Persons has the shared power to direct the vote and the shared power to direct the disposition of the 8,964,186 shares of Common Stock that may be deemed to be owned beneficially by each of them. (c) Except as set forth herein, to the knowledge of the Reporting Persons with respect to the persons named in response to paragraph (a), none of the persons named in response to paragraph (a) has effected any transactions in shares of Common Stock during the past 60 days. - ---------------------------- ------------------------------ 977383108 PAGE 9 OF 13 PAGES - ---------------------------- ------------------------------ (d) No person other than the persons listed is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any securities owned by any member of the group. (e) Not Applicable. Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIP WITH ------------------------------------------------------------ RESPECT TO THE SECURITIES OF THE ISSUER. --------------------------------------- In accordance with Sections 4.2(b) and 4.2(c) of the Merger Agreement, the 5,728,287 and 1,235,899 shares of Common Stock received in the Merger by GAP 61 and GAPCO II, respectively, may not be transferred for the three-year period commencing on October 16, 2000, provided that such transfer restrictions terminate upon a Change in Control (as defined in the Merger Agreement) of the Company. In accordance with Section 10.1 of the Merger Agreement, the Company, E*Trade, as the agent (the "Shareholders' Agent") of certain shareholders of E*OFFERING listed on Annex A thereto, including without limitation, GAP 61 and GAPCO II (the "Shareholders"), and The Chase Manhattan Bank, as escrow agent (the "Escrow Agent"), entered into the Escrow Agreement, dated as of October 16, 2000 (the "Escrow Agreement"), pursuant to which 10% of the shares of Common Stock issued in the Merger were deposited in an escrow fund (the "Escrow Fund") with the Escrow Agent to provide for and satisfy the indemnification obligations, if any, of the Shareholders described in the Merger Agreement. Pursuant to the Change of Shareholders' Agent Agreement, dated as - ---------------------------- ------------------------------ 977383108 PAGE 10 OF 13 PAGES - ---------------------------- ------------------------------ of October 12, 2000 (the "Change of Agent Agreement"), by and among E*Trade and the Shareholders, the parties thereto, in accordance with Section 10.7 of the Merger Agreement, removed E*Trade as the Shareholders' Agent and appointed GAP 61 as the Shareholders' Agent. In addition, pursuant to the Share Reallocation and Escrow Participation Agreement, dated as of September 30, 2000 (the "Share Reallocation Agreement"), by and among the Company, Merger Sub, E*Trade and certain of the Shareholders, in order to facilitate the transactions contemplated by the Merger Agreement, the parties agreed that (i) certain shares of Common Stock received by the Shareholders (other than E*Trade) in the Merger that would not otherwise be deposited in the Escrow Fund under the Merger Agreement would be deposited in the Escrow Fund in lieu of certain shares of Common Stock received by E*Trade and its affiliates in the Merger that would otherwise have been deposited in the Escrow Fund and (ii) certain shares of Common Stock that would otherwise be received by the Shareholders (other than E*Trade) in the Merger would instead be allocated to E*Trade under the Merger Agreement. Accordingly, GAP 61 and GAPCO II deposited in the Escrow Fund 913,693 and 197,133 shares of Common Stock, respectively, received in the Merger. In addition, pursuant to Section 4.2(d) of the Merger Agreement and the Special Escrow Agreement, dated as of October 16, 2000 (the "Special Escrow Agreement"), by and among the Company, E*Trade, as the agent of certain shareholders of E*OFFERING listed on Annex A thereto, including, without - ---------------------------- ------------------------------ 977383108 PAGE 11 OF 13 PAGES - ---------------------------- ------------------------------ limitation, GAP 61 and GAPCO II, and The Chase Manhattan Bank, as escrow agent, GAP 61 and GAPCO II deposited in a special escrow fund (the "Special Escrow Fund"), an additional 1,543,736 and 333,067 shares of Common Stock, respectively, received in the Merger (such shares, the "Special Escrow Shares"). One thirty-sixth of the Special Escrow Shares shall be released to GAP 61 and GAPCO II from the Special Escrow Fund on the last business day of each calendar month following October 2000; PROVIDED, HOWEVER, that in the event of a Change in Control (as defined in Section 4.2(a) of the Merger Agreement) of E*Trade and a non-assumption of the Strategic Alliance Agreement (as defined in the Merger Agreement) by the acquiring or successor entity, the Special Escrow Shares then remaining in the Special Escrow Fund shall be surrendered to the Company for cancellation; and PROVIDED, FURTHER, that in the event of a Change in Control of the Company, the Special Escrow Shares then remaining in the Special Escrow Fund shall be released to GAP 61 and GAPCO II. Finally, in connection with the closing of the transactions contemplated by the Merger Agreement, the Company and certain shareholders of the Company, including GAP 61 and GAPCO II, entered into the Registration Rights Agreement, dated as of October 16, 2000 (the "Registration Rights Agreement"). Pursuant to the Registration Rights Agreement, the Company agreed, at its own expense, to use its reasonable best efforts, immediately after the closing of the Merger, to register for sale pursuant to a shelf registration statement filed under Rule 415 of the Securities Act of 1933, as amended, the shares of Common Stock acquired by GAP 61 and GAPCO II in the Merger. The foregoing summaries of the Escrow Agreement, the Change of Agent Agreement, the Share Reallocation Agreement, the Special Escrow Agreement and the Registration Rights Agreement are qualified in their entirety by reference to Exhibits 5, 6, 7, 8 and 9 which are incorporated herein by reference. As noted above, the GAP Managing Members are the partners authorized and empowered to vote and dispose of the securities held by GAPCO II, and GAP is the partner authorized and empowered to vote the dispose of the securities held by GAP 61. Accordingly, GAP and the GAP Managing Members may, from time to time, consult among themselves and coordinate the voting and disposition of the shares of Common Stock as well as - ---------------------------- ------------------------------ 977383108 PAGE 12 OF 13 PAGES - ---------------------------- ------------------------------ such other action taken on behalf of the Reporting Persons with respect to the shares of Common Stock as they deem to be in the collective interest of the Reporting Persons. Item 7. MATERIALS TO BE FILED AS EXHIBITS. --------------------------------- Exhibit 1: Agreement relating to the filing of joint acquisition statements as required by Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended. Exhibit 2: Merger Agreement, incorporated by reference to the Company's Registration Statement on Form S-4, filed with the Commission on July 24, 2000. Exhibit 3: Stock Purchase Agreement, incorporated by reference to the Company's Registration Statement on Form S-4, filed with the Commission on July 24, 2000. Exhibit 4: Letter of Agreement, dated as of October 16, 2000, by and among the Company, E*Trade, GAP 68, GapStar, GAP 61 and GAPCO II. Exhibit 5: Escrow Agreement, dated as of October 16, 2000, among the Company, the Shareholders' Agent and The Chase Manhattan Bank, as escrow agent. Exhibit 6: Change of Shareholders' Agreement, dated as of October 12, 2000, among E*Trade and certain shareholders of the Company. Exhibit 7: Share Reallocation and Escrow Participation Agreement, dated as of September 30, 2000, by and among the Company, Merger Sub, E*Trade and certain shareholders of the Company. Exhibit 8: Special Escrow Agreement, dated as of October 16, 2000, among the Company, the Shareholders' Agent and The Chase Manhattan Bank, as escrow agent. Exhibit 9: Registration Rights Agreement, dated as of October 16, 2000, among the Company and certain shareholders of the Company, including GAP 61 and GAPCO II. - ---------------------------- ------------------------------ 977383108 PAGE 13 OF 13 PAGES - ---------------------------- ------------------------------ Exhibit 10: Powers of Attorney related to GAP and GAPCO II. SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated as of October 25, 2000. GENERAL ATLANTIC PARTNERS, LLC By: /s/ Thomas J. Murphy --------------------------- Name: Thomas J. Murphy Title: Attorney-In-Fact GENERAL ATLANTIC PARTNERS 61, L.P. By: General Atlantic Partners, LLC, Its general partner By: /s/ Thomas J. Murphy --------------------------- Name: Thomas J. Murphy Title: Attorney-In-Fact GAP COINVESTMENT PARTNERS II, L.P. By: /s/ Thomas J. Murphy --------------------------- Name: Thomas J. Murphy Title: Attorney-In-Fact EX-2 2 0002.txt EXHIBIT 1 EXHIBIT 1 to SCHEDULE 13D JOINT ACQUISITION STATEMENT PURSUANT TO RULE 13D-(k)(1) The undersigned acknowledge and agree that the foregoing statement on Schedule 13D is filed on behalf of each of the undersigned and that all subsequent amendments to this statement on Schedule 13D shall be filed on behalf of each of the undersigned without the necessity of filing additional joint acquisition statements. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning him, her or it contained herein, but shall not be responsible for the completeness and accuracy of the information concerning the other entities or persons, except to the extent that he, she or it knows or has reason to believe that such information is accurate. Dated as of October 25, 2000. GENERAL ATLANTIC PARTNERS, LLC By: /s/ Thomas J. Murphy --------------------------- Name: Thomas J. Murphy Title: Attorney-In-Fact GENERAL ATLANTIC PARTNERS 61, L.P. By: General Atlantic Partners, LLC, Its general partner By: /s/ Thomas J. Murphy --------------------------- Name: Thomas J. Murphy Title: Attorney-In-Fact GAP COINVESTMENT PARTNERS II, L.P. By: /s/ Thomas J. Murphy --------------------------- Name: Thomas J. Murphy Title: Attorney-In-Fact EX-99 3 0003.txt EXHIBIT 4 October 16, 2000 Wit Soundview Group, Inc. 826 Broadway New York, New York 10003 Dear Sirs: Reference is made to the Stock Purchase Agreement, dated May 15, 2000 (the "Agreement"), by and among Wit Soundview Group, Inc. (f/k/a Wit Capital Group, Inc.), E*Trade Group, Inc., General Atlantic Partners 68, L.P. ("GAP 68"), GapStar, LLC ("GapStar") and GAP Coinvestment Partners II, L.P. ("GAP Coinvestment"). Capitalized terms used herein and not otherwise defined herein shall have the meaning ascribed to such terms in the Agreement. The undersigned are writing to confirm that (i) GAP 68 and GapStar have assigned and transferred all of their rights and obligations under the Agreement to General Atlantic Partners 61, L.P. ("GAP 61") and GAP Coinvestment, (ii) each of GAP 61 and GAP Coinvestment shall purchase the aggregate number of shares of Common Stock set forth below opposite its name, at a purchase price equal to $10.25 per share, for the aggregate purchase price set forth below opposite its name and (iii) subject to the satisfaction or waiver of the conditions set forth in Section 4 of the Agreement, GAP 61 and GAP Coinvestment shall fund such aggregate purchase price on or prior to October 26, 2000. NAME NUMBER OF SHARES PURCHASE PRICE ---- ---------------- -------------- General Atlantic Partners 61, L.P. 1,645,070 $16,861,967.50 GAP Coinvestment Partners II, L.P. 354,930 3,638,032.50 Total 2,000,000 $20,500,000.00 The parties hereto hereby agree that GAP 61 shall be deemed a Purchaser under the Agreement. 2 Please confirm your agreement with the foregoing by signing this letter in the appropriate space below and faxing it to the undersigned at 203-618-9207. Very truly yours, General Atlantic Partners 68, L.P. By: General Atlantic Partners, LLC, its general partner By: /s/ Thomas J. Murphy ---------------------------------- Name: Thomas J. Murphy Title: Attorney-in-Fact GapStar, LLC By: General Atlantic Partners, LLC, its managing member By: /s/ Thomas J. Murphy ---------------------------------- Name: Thomas J. Murphy Title: Attorney-in-Fact General Atlantic Partners 61, L.P. By: General Atlantic Partners, LLC, its general partner By: /s/ Thomas J. Murphy ---------------------------------- Name: Thomas J. Murphy Title: Attorney-in-Fact GAP Coinvestment Partners II, L.P. By: /s/ Thomas J. Murphy ---------------------------------- Name: Thomas J. Murphy Title: Attorney-in-Fact 3 Accepted and agreed: Wit Soundview Group, Inc. By: /s/ Lloyd H. Feller ---------------------------------- Name: Lloyd H. Feller Title: Senior V.P. and Co-General Counsel E*Trade Group, Inc. By: /s/ Theodore J. Theophilos ---------------------------------- Name: Theodore J. Theophilos Title: Chief Legal Affairs Officer and Corporate Secretary EX-10.5 4 0004.txt EXHIBIT 5 ESCROW AGREEMENT THIS ESCROW AGREEMENT, dated as of October 16, 2000 (the "Escrow Agreement"), is by and among Wit SoundView Group, Inc., a corporation organized under the laws of Delaware ("Parent"), E*TRADE Group, Inc. as the agent (the "Shareholders' Agent") of the shareholders, each of whom is listed on ANNEX A hereto (individually, a "Shareholder" and collectively the "Shareholders") of E*OFFERING Corp., a California corporation (the "Company"), and The Chase Manhattan Bank as escrow agent (the "Escrow Agent"). Capitalized terms not otherwise defined in this Escrow Agreement have the meanings ascribed to them in the Amendment Agreement (as defined below) or, if not otherwise defined in the Amendment Agreement, in the Merger Agreement (as defined below). Pursuant to the Agreement and Plan of Merger, dated as of May 15, 2000 (the "Merger Agreement"), as amended by the Amendment Agreement, dated as of September 26, 2000 (the "Amendment Agreement"), by and among Parent, Wit SoundView Corp., a corporation organized under the laws of the State of Delaware ("Merger Sub"), and the Company, the Company has been merged with and into Merger Sub (the "Merger"). Pursuant to Section 10.1 of the Merger Agreement, __________ shares of common stock, $0.01 par value per share, of Parent (the "Escrow Shares") are being deposited by Parent into the escrow fund established hereunder (the "Escrow Fund") on behalf of the Shareholders to provide for the indemnification of the Indemnified Persons (as defined in the Amendment Agreement) under Article X of the Merger Agreement and the Amendment Agreement. The Schedule delivered by the Shareholders' Agent pursuant to Section 4.1 of the Merger Agreement, attached hereto as ANNEX A, sets forth the name of each Shareholder and the number of Escrow Shares initially being deposited on each Shareholder's behalf. NOW THEREFORE, the parties hereto agree as follows: 1. ESTABLISHMENT OF ESCROW. Parent has delivered to the Escrow Agent and the Escrow Agent acknowledges receipt of the Escrow Shares in the form of a single stock certificate registered in the name of Cudd & Co. as nominee for the Escrow Agent. The address of each Shareholder and (if applicable) the taxpayer identification of each Shareholder are set forth in ANNEX B attached hereto. The Escrow Agent shall hold the Escrow Shares, and any dividends or other distributions on the Escrow Shares and other securities or property into which the Escrow Shares may be converted or reclassified into or exchanged for, in escrow, in its name or the name of its nominee, in accordance with this Escrow Agreement. The Escrow Shares shall not be subject to any lien, attachment, trustee process or any other judicial process of any creditor of any party hereto. The Escrow Agent shall have no responsibility for the genuineness, validity, market value, title or sufficiency for any intended purpose of the Escrow Shares. The Escrow Agent shall be under no obligation to preserve, protect or exercise rights in the Escrow Shares, and shall be responsible only for reasonable measures to maintain the physical safekeeping thereof, and otherwise to perform and observe such duties on its part as are expressly set forth in this Escrow Agreement. Notwithstanding the foregoing, if the Escrow Agent is so requested in a written request of the Shareholders' Agent received by the Escrow Agent at least three (3) business days prior to the date on which the Escrow Agent is requested therein to take such action (or such later date as may be acceptable to the Escrow Agent), the Escrow Agent shall execute or cause its nominee to execute, and deliver to the Shareholders' Agent a proxy or other instrument in the form supplied to it by the Shareholders' Agent for voting or otherwise exercising any right of consent with respect to any of the Escrow Shares held by it hereunder, to authorize therein the Shareholders' Agent to exercise such voting or consent authority in respect of the Escrow Shares (provided that the Escrow Agent shall not be obliged to execute any such proxy or other instrument if, in its judgment, the terms thereof may subject the Escrow Agent to any liabilities or obligations in its individual capacity). The Escrow Agent shall not be responsible for forwarding to any party, notifying any party with respect to, or taking any action with respect to, any notice, solicitation or other document or information, written or otherwise, received from Parent or other person with respect to the Escrow Shares, including but not limited to, proxy material, tenders, options, the pendency of calls and maturities and expiration of rights. 2. DIVIDENDS AND DISTRIBUTIONS ON ESCROW SHARES. Until distributed pursuant to Section 7, (a) the Escrow Agent shall invest all cash dividends and other cash distributions, if any, on the Escrow Shares (such cash dividends and other cash distributions are referred to herein as the "Escrow Cash Dividends") at, and pursuant to, the written direction of the Shareholders' Agent in Eligible Investments (as defined below) (including any interest earned thereon) and shall not be responsible or liable for any loss accruing from any investment made in accordance herewith, and (b) the Escrow Agent shall hold any noncash dividends and other noncash distributions on the Escrow Shares. Dividends payable in securities or other distributions of any kind, whether by way of stock dividends, stock splits or otherwise, shall be delivered to the Escrow Agent and added to the Escrow Fund and become a part of the Escrow Fund. Such securities or other distributions shall be considered Escrow Shares for purposes hereof and allocated pursuant to the terms of this Escrow Agreement. "Eligible Investments" means (a) obligations issued or guaranteed by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support of interest and principal thereto); (b) certificates of deposit of any domestic commercial bank having capital and surplus in excess of $500,000,000; (c) repurchase obligations for underlying securities of the type described in clause (a); (d) shares of any registered money market fund at least ninety-five percent (95%) of the assets of which constitute obligations of the type described in clause (a) above; (e) a trust account with The Chase Manhattan Bank (thirty (30) day libor minus fifty (50) bps); or (f) one or more portfolios of The Chase Vista Money Market Mutual Funds, for which affiliates of The Chase Manhattan Bank provide investment advisory and shareholder services for a fee as described in the prospectus for these funds which has been provided to the parties hereto, in addition to a twenty-five (25) basis point fee as compensation for administrative and accounting services provided to clients. No investment except for investments in money market funds shall have a term of more than thirty (30) days. If otherwise qualified, obligations of the Escrow Agent shall qualify as Eligible Investments. 2 Absent its timely receipt of such specific written investment instruction from the Shareholders' Agent, the Escrow Agent shall have no obligation or duty to invest (or otherwise pay interest on) the Escrow Cash Dividends. All earnings received from the investment of the Escrow Cash Dividends shall be credited to, and shall become a part of, the Escrow Fund (and any losses on such investments shall be debited to the Escrow Fund). The Escrow Agent shall have no liability for any investment losses, including any losses on any investment required to be liquidated prior to maturity in order to make a payment required hereunder. All trust investment orders involving Treasuries, commercial paper and other direct investments will be executed through Chase Asset Management (CAM), in the investment management division of The Chase Manhattan Bank. Subject to the principles of best execution, transactions are effected on behalf of the account through a broker dealer selected by CAM. In this regard, CAM seeks to attain the best overall result for the account, taking into consideration quality of service and reliability. An agency fee will be assessed in connection with each transaction. Periodic statements will be provided to Parent and Shareholders' Agent reflecting transactions executed on behalf of the Escrow Fund. The Parent and Shareholders' Agent, upon written request, will receive a statement of transaction details upon completion of any securities transaction in the Escrow Fund without any additional cost. 3. TAX TREATMENT AND ALLOCATION. Dividends and other distributions on the Escrow Shares shall be allocable for tax purposes to the Shareholders in proportion to their respective Escrow Shares at the time of such allocation, and the Shareholders will include any such allocations constituting income in their gross income for federal, state and local income tax purposes and pay any tax resulting therefrom. Any interest or other earnings on the Escrow Shares and Escrow Cash Dividends shall be allocable for tax purposes to Parent. Parent and the Shareholders' Agent will provide the Escrow Agent with certified tax identification numbers for each of Parent and the Shareholders by furnishing appropriate Forms W-9 (or Forms W-8, in the case of non-U.S. persons) and other forms and documents that the Escrow Agent may reasonably request to the Escrow Agent within fourteen (14) days of the date hereof. The parties hereto acknowledge that in the event that a Shareholder's tax identification number is not certified to the Escrow Agent, the Escrow Agent may be required to withhold a portion of any interest, dividend or other income earned on the Escrow Fund. The Escrow Agent will be permitted to withhold and pay to the appropriate taxing authority any amount of the Escrow Shares, Escrow Cash Dividends and earnings thereon that the Escrow Agent in its determination reasonably believes is required to be withheld and paid to the applicable taxing authority. 4. TAX INDEMNIFICATION. Each Shareholder: (i) assumes any and all obligations imposed now or hereafter by any applicable tax law with respect to any payment or distribution of the Escrow Shares and Escrow Cash Dividends, or performance of other activities under this Escrow Agreement, with respect to the Shareholder's Escrow Shares; (ii) shall instruct the Shareholders' Agent to instruct the Escrow Agent in writing with respect to the Escrow Agent's responsibility for withholding and other taxes, assessments or other governmental charges, and shall instruct the Shareholders' Agent to instruct the Escrow Agent with respect to any certifications and governmental reporting that may be required under any laws or regulations that may be applicable in connection with its acting as Escrow Agent under this Escrow Agreement with respect to the Shareholder's Escrow Shares; and (iii) shall indemnify and hold 3 the Escrow Agent harmless from any liability or obligation on account of taxes, assessments, additions for late payment, interest, penalties, expenses and other governmental charges that may be assessed or asserted against the Escrow Agent in connection with or relating to any payment made or other activities performed under this Escrow Agreement with respect to the Shareholder's Escrow Shares, including without limitation any liability for the withholding or deduction of (or the failure to withhold or deduct) the same, and any liability for failure to obtain proper certifications or to report properly to governmental authorities in connection with this Escrow Agreement, including costs and expenses (including reasonable legal fees and expenses), interest and penalties. 5. PARENT CLAIMS AGAINST ESCROW SHARES. At any time or times prior to the Expiration Date (as defined in Section 7 of this Escrow Agreement), Parent may make claims against the Escrow Shares for amounts potentially eligible for indemnification under Section 10.2 of the Merger Agreement and the Amendment Agreement (including, without limitation, Specified Matters) by delivering to the Escrow Agent an Officer's Certificate, in substantially the same form as set forth in ANNEX C attached hereto, prepared in accordance with Section 10.4 of the Merger Agreement and the Amendment Agreement, with a copy delivered at the same time to the Shareholders' Agent. The Officer's Certificate shall set forth (i) the number of Escrow Shares, calculated by dividing the amount or amounts of Parent's claim or claims by the Escrow Share Value (as defined below), equivalent in value to such Parent's claim or claims, (ii) the number of Escrow Shares to be subtracted from each Shareholder's portion of the Escrow Fund, and (iii) the Set Aside Amount (as defined below) and the allocation of the Set Aside Amount among each Shareholder's portion of the Escrow Fund. Upon the earliest of: (x) receipt of written authorization from the Shareholders' Agent or from the Shareholders' Agent jointly with Parent to make such delivery, (y) receipt of written notice presented by the prevailing party of a final decision in arbitration of the claim, or (z) in the event the claim set forth in the Officer's Certificate is uncontested by the Shareholders' Agent within a twenty (20) business day period after the date the Escrow Agent received such Officer's Certificate, in accordance with Section 10.5 of the Merger Agreement and the Amendment Agreement, and for Specified Matters and/or if the aggregate amount of undisputed claims (other than Specified Matters) exceeds Three Million Dollars (US$3,000,000) (the "Indemnity Threshold"), as set forth in one or more Officer's Certificates, each such undisputed claim shall be deemed to have been acknowledged to be payable from the Escrow Shares in the full amount of the Damages (as defined in the Amendment Agreement) as set forth in the Officer's Certificate, and the Escrow Agent shall deliver such number of Escrow Shares to Parent as soon as practicable after expiration of the twenty (20) business day dispute period provided for in Section 10.5 of the Merger Agreement. Damages with respect to Specified Matters shall not be subject to or limited by the Indemnity Threshold and shall not count as Damages for the purpose of determining whether aggregate Damages exceed the Indemnity Threshold, and only Damages for matters other than the Specified Matters shall be aggregated for the purpose of applying the Indemnity Threshold. The Escrow Agent shall effect such payment of Escrow Shares to Parent by surrendering the certificate representing the Escrow Shares to Parent's transfer agent for cancellation with instructions to issue a new certificate to the Escrow Agent for the number of Escrow Shares remaining after giving effect to such payment and a certificate to Parent for the number of Escrow Shares constituting such payment. If the aggregate amount of undisputed claims is less than the Indemnity Threshold, as set forth in one or more Officer's Certificates, the Escrow Agent shall continue to hold the Escrow Shares (except in the case of Damages with respect to 4 Specified Matters as set forth above). If the amount of the claim exceeds the aggregate value of the Escrow Shares, none of the Escrow Agent, the Shareholders' Agent, the Shareholders or any Company Indemnified Person shall have liability or responsibility for any deficiency. For purposes of determining how many Escrow Shares shall be delivered in satisfaction of any claim, each Escrow Share shall have a value (which shall be set forth in the Officer's Certificate) equal to the average of the closing prices for the common stock of Parent as reported for the primary trading session (currently ending at 4:00 p.m. on the Nasdaq National Market) during the period comprised of ten (10) consecutive trading days ending on the trading day two business days preceding the date of the Officer's Certificate (the "Escrow Share Value"). The number of Escrow Shares to be paid to Parent by the Escrow Agent shall be set forth in the Officer's Certificate and calculated by dividing the amount of the Damages to which such claim relates by the Escrow Share Value. Any payment to Parent shall reduce the number of Escrow Shares in which the Shareholder or Shareholders obligated to make such payment have an interest. All claims paid out of the Escrow Shares shall be rounded to the nearest whole share. If the shares of Parent common stock originally constituting the Escrow Shares are converted or reclassified into or exchanged for any other securities or property, the foregoing claim and payment provisions shall apply to such other security or property. To the extent that the Escrow Agent is required to deliver Escrow Shares to Parent under this Escrow Agreement, it shall deliver such Escrow Shares based on the respective ownership of the Escrow Shares among the shareholder parties. If the value to be distributed to Parent by a Shareholder to compensate Damages is not evenly divisible by the Escrow Share Value, the number of Escrow Shares to be distributed shall be rounded up to the next highest number of Escrow Shares to the extent available. In lieu of the excess fractional interest distributed, Parent shall furnish to the Escrow Agent cash equal to such fractional interest times the Escrow Share Value and such cash shall be added to the Escrow Fund and shall be invested in accordance with Section 2 of this Escrow Agreement. The Escrow Agent is hereby authorized to rely on the Escrow Share Value set forth in the Officer's Certificate, unless the Shareholders' Agent timely disputes such Escrow Share Value pursuant to Section 6 below. The parties hereto understand that the Escrow Agent shall not be responsible for making any of the calculations hereunder. 6. DISPUTED PARENT CLAIMS. The Shareholders' Agent may dispute any claim or the Escrow Share Value set forth on an Officer's Certificate by giving written notice thereof to Parent and the Escrow Agent within twenty (20) business days after the date Parent delivered the Officer's Certificate to the Escrow Agent with a copy thereof to the Shareholders' Agent. If the Shareholders' Agent disputes a claim, the Escrow Agent shall provisionally allocate that portion of the Escrow Shares equal to one hundred and five percent (105%) of the amount of the Damages (the "Set Aside Amount") divided by the Escrow Share Value, in the manner set forth on the Officer's Certificate. No distribution of Escrow Shares allocated to a Set Aside Amount shall be made by the Escrow Agent to Parent or to the Shareholders until such disputed claim has been resolved, as evidenced by a written notice executed by both Parent and the Shareholders' Agent or a final court order, decree or judgment or an arbitration award determination instructing the Escrow Agent as to the distribution of the Escrow Shares allocated to such Set Aside Amount or portion thereof. The Escrow Agent shall adjust the number of allocated Escrow Shares pursuant to written notice provided by both Parent and the Shareholders' Agent, which shall be provided in good faith by the parties hereto at least once each quarter prior to resolution of such dispute, and which shall be determined by dividing the Set Aside Amount with the average of the 5 closing prices for the common stock of Parent as reported for the primary trading session (currently ending at 4:00 p.m. on the Nasdaq National Market) during the period comprised of ten (10) consecutive trading days ending on the trading day two business days preceding the date of the such notice. 7. TERMINATION. On October 16, 2001 (the "Expiration Date"), upon notification from Parent and the Shareholders' Agent, the Escrow Agent shall deliver any and all remaining Escrow Shares and Escrow Cash Dividends to the Shareholders' Agent with instructions to deliver to the Shareholders according to their respective Escrow Shares then held in escrow, provided that the Escrow Agent shall retain and continue to hold in escrow all Escrow Shares then allocated to Set Aside Amounts until such time or time as such Escrow Shares may be distributed pursuant to Section 6 of this Escrow Agreement. Escrow Shares delivered in this manner upon the Expiration Date shall be registered in the name of the Shareholders' Agent, and the Escrow Cash Dividends shall be delivered to the Shareholders' Agent in the form of a check made payable to the Shareholders' Agent. The Escrow Agent shall deliver any interest or other earnings on any dividends or other distributions to Parent via check to Parent's address in Section 10. This Escrow Agreement shall terminate upon the later of the Expiration Date or the distribution of all the Escrow Shares in accordance with this Escrow Agreement, provided that Section 4 shall survive termination of this Escrow Agreement. If, upon the Expiration Date, the number of the remaining Escrow Shares to be distributed to any Shareholder pursuant to this Escrow Agreement is not a whole number, the number of Escrow Shares to be distributed to such Shareholder shall be rounded down to the next lowest number of Escrow Shares, and the Escrow Agent shall cause the Transfer Agent to distribute that number of Escrow Shares to such Shareholder. In lieu of the additional fractional Escrow Share interest to which such Shareholder is entitled, Parent shall furnish the Escrow Agent cash equal to the value of such fractional Escrow Share interest, which value shall be set forth in a certificate delivered to the Escrow Agent by both Parent and the Shareholders' Agent, and the Escrow Agent shall pay such cash to such Shareholder via check to the address set forth in ANNEX B. Parent shall be deemed to have purchased such fractional Escrow Share interests with respect to which it has furnished funds to the Escrow Agent. 8. THE ESCROW AGENT. (a) Notwithstanding anything herein to the contrary, the Escrow Agent shall deliver all or any part of the Escrow Shares as directed by a writing jointly signed by the Shareholders' Agent and Parent as soon as practicable upon receipt of such notice. The Escrow Agent shall not be liable for any act or failure to act under this Escrow Agreement, including any and all claims made against the Escrow Agent as a result of its holding the Escrow Shares or Escrow Cash Dividends in its own name, except for its own gross negligence, bad faith or willful misconduct. Subject to the foregoing, the Escrow Agent shall not be liable for, and Parent and the Shareholders' Agent shall, jointly and severally, indemnify and hold harmless the Escrow Agent and its directors, employees, officers, agents, successors and assigns against any losses or claims (including reasonable out-of-pocket expenses and attorney fees) arising out of any action taken or omitted hereunder and reasonable costs of investigation and counsel fees and expenses which may be imposed on the Escrow Agent or reasonably incurred by it in connection with its acceptance of this appointment or performance of its duties hereunder. The Escrow Agent may 6 decline to act and shall not be liable for failure to act if in doubt as to its duties under this Escrow Agreement. The Escrow Agent may act upon any instrument or signature (including wire transfer instructions) believed by it to be genuine and may assume that any person purporting to give any notice or instruction hereunder, believed by it to be authorized, has been duly authorized to do so. The Escrow Agent's duties shall be determined only with reference to the express duties set forth in this Escrow Agreement, each of which duties are ministerial in nature, and applicable law. The Escrow Agent shall not be deemed to be a fiduciary and is not charged with knowledge of or any duties or responsibilities in connection with any other document or agreement, including without limitation, the Merger Agreement and the Amendment Agreement. The parties hereto agree that the use of defined terms incorporated by reference to the Merger Agreement and the Amendment Agreement is solely for the convenience of the other parties, and the Escrow Agent may rely on the use of defined terms in any communication received by it. In no event will the Escrow Agent be liable for punitive, special or consequential damages or losses (including lost profits) whatsoever, even if the Escrow Agent has been informed of the likelihood of such damages or losses. The parties hereto acknowledge that the foregoing indemnities shall survive the resignation or removal of the Escrow Agent or the termination of this Escrow Agreement. (b) Parent agrees to (i) pay the Escrow Agent upon execution of this Escrow Agreement and annually thereafter reasonable compensation for the services to be rendered hereunder, which unless otherwise agreed in writing shall be as set forth in ANNEX D attached hereto, and (ii) pay or reimburse the Escrow Agent upon request for all expenses, disbursements and advances, including reasonable attorneys' fees and expenses, incurred or made by it in connection with the preparation, execution, performance, delivery, modification and termination of this Escrow Agreement. (c) The Escrow Agent shall have the right at any time to resign hereunder by giving written notice of its resignation to the parties hereto, at the addresses set forth herein or at such other address as the parties shall provide, at least thirty days prior to the date specified for such resignation to take effect. The Escrow Agent shall have the right to withhold an amount equal to any amount due and owing to the Escrow Agent, plus any costs and expenses the Escrow Agent shall reasonably believe may be incurred by the Escrow Agent in connection with the termination of this Escrow Agreement. In such event Parent shall with the approval of the Shareholders' Agent, which approval shall not be unreasonably withheld, appoint a successor escrow agent within that thirty-day period; if Parent does not designate a successor escrow agent within such period, the Escrow Agent may appoint a successor escrow agent. Upon the effective date of such resignation, the Escrow Shares and Escrow Cash Dividends then held by the Escrow Agent hereunder shall be delivered by it to such successor escrow agent or as otherwise shall be designated in writing by Parent and the Shareholders' Agent. If no successor escrow agent is appointed as provided herein, the Escrow Agent may apply to a court of competent jurisdiction for appointment of a successor escrow agent. (d) In the event that the Escrow Agent shall be uncertain as to its duties or rights hereunder or shall receive instructions, claims or demands from any party hereto which, in its opinion, conflict with any of the provisions of this Escrow Agreement, it shall be entitled to refrain from taking any action and its sole obligation shall be to keep safely all property held in escrow until it shall be directed otherwise in writing by all of the other parties 7 hereto or by a final order or judgment of a court of competent jurisdiction. The Escrow Agent may consult counsel satisfactory to it, including in-house counsel, and will be protected in respect of any action taken or omitted in reliance thereon. (e) The Escrow Agent may execute any of its powers or responsibilities hereunder and exercise any rights hereunder, either directly or by or through its agents or attorneys. Nothing in this Escrow Agreement shall be deemed to impose upon the Escrow Agent any duty to qualify to do business in any jurisdiction other than New York or to act as fiduciary. The Escrow Agent shall not be responsible for and shall not be under a duty to examine, inquire into or pass upon the validity, binding effect, execution or sufficiency of this Escrow Agreement or of any amendment or supplement hereto. 9. SHAREHOLDERS' AGENT. (a) The Shareholders' Agent represents and warrants to Parent and the Escrow Agent that it is authorized to execute this Escrow Agreement for and on behalf of the Shareholders and to take any action deemed by it appropriate or necessary to carry out the provisions of, and to determine the rights of the Shareholders under, the Merger Agreement, the Amendment Agreement and this Escrow Agreement. The Shareholders' Agent shall serve as the agent of the Shareholders for all purposes related to this Escrow Agreement, including without limitation service of process upon the Shareholders. By execution of this Escrow Agreement, the Shareholders' Agent accepts and agrees to use its best efforts to discharge the duties and responsibilities of the Shareholders' Agent set forth in this Escrow Agreement without compensation for its services hereunder. Parent and the Escrow Agent shall be entitled to rely upon the authorization and designation of the Shareholders' Agent under this Section 9 and shall be fully protected in dealing with the Shareholders' Agent, and shall have no duty to inquire into the authority of any person reasonably believed by any of them to be the Shareholders' Agent. (b) The Shareholders' Agent shall serve without compensation but shall be reimbursed from the Escrow Fund for all out of pocket expenses reasonably incurred, including expenses for lawyers and accountants employed on behalf of the Shareholders' interests in the Escrow Fund. The Shareholders' Agent may cause the Escrow Agent, at its written request, to exchange Escrow Shares held, with Parent, for cash for each reimbursement by delivering to the Escrow Agent a certificate which shall set forth the number of Escrow Shares equivalent in value to each reimbursement and the manner in which the reimbursement shall be allocated among the Shareholders' interests in the Escrow Fund. Parent shall deliver such cash at a per share price equal to the price of such Escrow Shares at the close of market on the next trading day preceding such exchange, and Parent shall become the beneficial owner of such Escrow Shares. In no event shall the Shareholders' Agent be entitled to incur expenses reimbursable by the Escrow Fund in excess of a total of $500,000 without first obtaining the written consent of the holders of a majority in interest of the Escrow Fund. The Escrow Agent shall have no duty to ensure that such written consent is properly obtained by the Shareholders' Agent. 10. THIRD-PARTY CLAIMS. If Parent or the Shareholders' Agent becomes aware of a third-party claim and believes that this may result in a demand against the Escrow Fund, Parent or the Shareholders' Agent shall promptly notify the other party of that claim, and the 8 other party and the Shareholders shall be entitled, at their own expense, to participate in any defense of that claim. Parent or the Shareholders' Agent shall each have the right in its sole discretion to settle any claim. However, Parent or the Shareholders' Agent may not effect the settlement of any claim without the consent of the other party, which consent shall not be unreasonably withheld. In the event that Parent or the Shareholders' Agent has consented to any such settlement, that party shall have no power or authority to object under Section 10.5 of the Merger Agreement or any other provision of the Merger Agreement or the Amendment Agreement or under this Escrow Agreement to any claim by the other party against the Escrow Fund for indemnity in the amount of such settlement. Upon notification by Parent and the Shareholders' Agent, the Escrow Agent shall deliver the Escrow Shares in the amount of such settlement to Parent or the Shareholders' Agent, as the case may be. 11. NOTICES. Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed given when delivered in person, by overnight courier, by facsimile transmission (with receipt confirmed by telephone or by automatic transmission report) or five (5) business days after being sent by registered or certified mail (postage prepaid, return receipt requested), as follows: If to Parent: Wit SoundView Group, Inc. 826 Broadway, New York, New York 10003 Facsimile: 212 253-5289 Attention: Robert H. Lessin Chief Executive Officer With copies to: Wit SoundView Group, Inc. 826 Broadway New York, New York 10003 Facsimile: 212 253-5289 Attention: Lloyd H. Feller Senior Vice President and Co-General Counsel and Skadden, Arps, Slate, Meagher & Flom, LLP Four Times Square, 30th Floor New York, New York 10036 Facsimile: (212) 735-2000 Attention: Richard T. Prins, Esq. 9 and Skadden, Arps, Slate, Meagher & Flom, LLP 525 University Avenue, Suite 220 Palo Alto, CA 94301 Facsimile: (650) 470-4570 Attention: Kenton J. King, Esq. If to Shareholders' Agent: E*TRADE Group, Inc. 4500 Bohannon Drive Menlo Park, CA 94025 Facsimile: (650)331-6803 Attention:Thomas A. Bevilacqua Chief Strategic Investment Officer With copies to: Wilson Sonsini Goodrich & Rosati 650 Page Mill Road Palo Alto, CA 94304 Facsimile: (650) 461-5380 Attention: Alan K. Austin, Esq. and Brobeck Phleger & Harrison Two Embarcadero Place 2200 Geng Road Palo Alto, CA 94303 Facsimile: (650) 496-2885 Attention: Curtis L. Mo, Esq. and Paul, Weiss, Rifkind, Wharton & Garrison 1285 Avenue of the Americas New York, NY 10019 Facsimile: (212) 757-3990 Attention: Douglas A. Cifu, Esq. 10 If to Escrow Agent: Chase Manhattan Bank Capital Markets Fiduciary Services 450 West 33rd Street, 10th Floor New York, NY 10001 Facsimile: (212) 946-3935 Attention: Debbie DeMarco Any party may by notice given in accordance with this section to the other parties designate another address or person for receipt of notices hereunder. 12. VOTING. Until the Expiration Date, until directed otherwise by the Shareholders' Agent pursuant to Section 1, the Escrow Agent will vote each of the Escrow Shares as directed in writing by the Shareholders' Agent. 13. GOVERNING LAW. This Escrow Agreement is governed by the laws of New York without regard to its conflict of law provisions, and shall inure to the benefit of and be binding upon the successors, assigns, heirs and personal representatives of the parties hereto. 14. COUNTERPARTS. This Escrow Agreement may be executed in two or more counterparts, all of which documents shall be considered one and the same document. 15. ADDITIONAL TERMS. (a) The Escrow Agent shall have no more or less responsibility or liability on account of any action or omission of any book-entry depository, securities intermediary or other subescrow agent employed by the Escrow Agent than any such book-entry depository, securities intermediary or other subescrow agent has to the Escrow Agent, except to the extent that such action or omission of any book-entry depository, securities intermediary or other subescrow agent was caused by the Escrow Agent's own gross negligence, bad faith or willful misconduct. (b) Each of the parties hereby absolutely and irrevocably consents and submits to the jurisdiction of the courts in New York and of any Federal court located in New York in connection with any actions or proceedings brought against any of the parties (or each of them) by the Escrow Agent arising out of or relating to this Escrow Agreement. In any such action or proceeding, the parties each hereby absolutely and irrevocably (i) waive any objection to jurisdiction or venue, (ii) waive personal service of any summons, complaint, declaration or other process, and (iii) agree that the service thereof may be made by certified or registered first-class mail directed to such party, as the case may be, at their respective addresses in accordance with Section 10 hereof. (c) The Escrow Agent shall not be responsible for delays or failures in performance resulting from acts beyond its control. Such acts shall include but not be limited to acts of God, strikes, lockouts, riots, acts of war, epidemics, governmental regulations 11 superimposed after the fact, fire, communication line failures, computer viruses, power failures, earthquakes or other disasters. (d) This Escrow Agreement shall be binding upon the respective parties hereto and their heirs, executors, successors and assigns. (e) This Escrow Agreement may not be altered or modified without the express written consent of the parties hereto. No course of conduct shall constitute a waiver of any of the terms and conditions of this Escrow Agreement, unless such waiver is specified in writing, and then only to the extent so specified. A waiver of any terms and conditions of this Escrow Agreement on one occasion shall not constitute a waiver of the other terms of this Escrow Agreement, or of such terms and conditions on any other occasion. (f) The parties agree that this Escrow Agreement and all documents relating thereto, including, without limitation, (i) consents, waivers and modifications which may hereafter be executed, and (ii) certificates and other information previously or hereafter furnished, may be reproduced by any photographic, photostatic, microfilm, optical disk, micro-card, miniature photographic or other similar process and shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. (g) In the event funds transfer instructions are given (other than in writing at the time of execution of this Escrow Agreement), whether in writing, by telecopier or otherwise, the Escrow Agent is authorized to seek confirmation of such instructions by telephone call-back to the person or persons designated on ANNEX E, and the Escrow Agent may rely upon the confirmation of anyone purporting to be the person or persons so designated. The persons and telephone numbers for call-backs may be changed only in a writing actually received and acknowledged by the Escrow Agent. The Escrow Agent and the beneficiary's bank in any funds transfer may rely solely upon any account numbers or similar identifying numbers provided by the Parent or the Shareholders' Agent to identify (i) the beneficiary, (ii) the beneficiary's bank, or (iii) an intermediary bank. The Escrow Agent may apply any of the escrowed funds for any payment order it executes using any such identifying number, even where its use may result in a person other than the beneficiary being paid, or the transfer of funds to a bank other than the beneficiary's bank or an intermediary bank designated. The parties to this Escrow Agreement acknowledge that these security procedures are commercially reasonable. [Remainder of Page Intentionally Left Blank] Counterpart Signature Page Escrow Agreement IN WITNESS WHEREOF, the parties have executed this Escrow Agreement on the date first above written. WIT SOUNDVIEW GROUP, INC. By: /s/ Mark F. Loehr ---------------------------------- Name: Mark F. Loehr Title: Co-President E*TRADE GROUP, INC. as Shareholders' Agent By: /s/ Theodore J. Theophilos ---------------------------------- Name: Theodore J. Theophilos Title: Chief Legal Affairs Officer and Corporate Secretary THE CHASE MANHATTAN BANK as Escrow Agent By: /s/ Debbie DeMarco ---------------------------------- Authorized Signatory Name: Debbie DeMarco Title: Assistant Vice President 13 ANNEX A ------- SCHEDULE - -------------------------------------------------------------------------------- Shareholder Number of Escrow Shares - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Total - -------------------------------------------------------------------------------- ANNEX B ------- SHAREHOLDER ADDRESS AND TAXPAYER INFORMATION (IF APPLICABLE) - -------------------------------------------------------------------------------- NAME OF SHAREHOLDER ADDRESS OF SHAREHOLDER TAXPAYER IDENTIFICATION NO. ================================================================================ - -------------------------------------------------------------------------------- Austin, Alan - -------------------------------------------------------------------------------- Battery Ventures V L.P. - -------------------------------------------------------------------------------- Bevilacqua, Thomas - -------------------------------------------------------------------------------- Conley, Peter J. - -------------------------------------------------------------------------------- Cotsakos, Christos - -------------------------------------------------------------------------------- Crosspoint Venture Partners 2000 - -------------------------------------------------------------------------------- Cruttenden Partners LLC - -------------------------------------------------------------------------------- Cruttenden, Christopher - -------------------------------------------------------------------------------- Cruttenden, Walter W. - -------------------------------------------------------------------------------- Cutler, Frank - -------------------------------------------------------------------------------- E*TRADE - -------------------------------------------------------------------------------- GA Coinvestment Partners II LP - -------------------------------------------------------------------------------- GA Partners 61 LP - -------------------------------------------------------------------------------- GC&H Investments - -------------------------------------------------------------------------------- Gregory, J. H. Company - -------------------------------------------------------------------------------- James Creigh - -------------------------------------------------------------------------------- Levinson, Kathy - -------------------------------------------------------------------------------- Long, R. D. - -------------------------------------------------------------------------------- NEA Ventures 2000 L.P. - -------------------------------------------------------------------------------- Okada, Michael - -------------------------------------------------------------------------------- Owen, William A. - -------------------------------------------------------------------------------- Red Rock Advisors Fund - -------------------------------------------------------------------------------- Robertson, Sandford - -------------------------------------------------------------------------------- Softbank TV Adv. Fund V L.P. - -------------------------------------------------------------------------------- Softbank TV Entrep. Fund V L.P. - -------------------------------------------------------------------------------- Softbank TV V L.P. - -------------------------------------------------------------------------------- WS Investment Company 2000A - -------------------------------------------------------------------------------- [Additional Shareholder] - -------------------------------------------------------------------------------- [Additional Shareholder(s)] - -------------------------------------------------------------------------------- ANNEX C ------- FORM OF OFFICER'S CERTIFICATE Reference is made to the Escrow Agreement, dated as of October ___, 2000 (the "Escrow Agreement"), by and among Wit SoundView Group, Inc., a corporation organized under the laws of Delaware ("Parent"), E*TRADE Group, Inc. as the agent of the shareholders of E*OFFERING Corp., a California corporation ("E*OFFERING") and The Chase Manhattan Bank as escrow agent; and the Agreement and Plan of Merger, dated as of May 15, 2000 (the "Merger Agreement"), as amended by the Amendment Agreement, dated as of September 26, 2000 (the "Amendment Agreement"), by and among Parent, Wit SoundView Corp., a corporation organized under the laws of the State of Delaware, and E*OFFERING. Capitalized terms used and not otherwise defined herein have the same meaning herein ascribed to such term in the Escrow Agreement, the Amendment Agreement or, if not otherwise defined in the Amendment Agreement, the Merger Agreement. 1. The undersigned hereby certifies that, pursuant to Section 5 of the Escrow Agreement, actual or potential Damages exist from the following unreimbursed claim or claims for indemnification under Section 10.2 of the Merger Agreement and the Amendment Agreement for (i) Damages with respect to Specified Matters or (ii) Damages with respect to a claim or claims other than for Specified Matters in an aggregate amount greater than Three Million Dollars (US$3,000,000), as set forth below or in previous Officer's Certificate(s) or any combination thereof: - -------------------------------------------------------------------------------- Brief description of nature of claim - -------------------------------------------------------------------------------- Amount of Damages in such claim - -------------------------------------------------------------------------------- Itemized description and amount of Damages in such claim - -------------------------------------------------------------------------------- Date each such item was properly accrued or arose - -------------------------------------------------------------------------------- Date each such item was paid (if applicable) - -------------------------------------------------------------------------------- *Additional claims, if any, are attached hereto. 2. The Escrow Share Value, as set forth in the Escrow Agreement, for the purpose of determining the number of Escrow Shares to be delivered in satisfaction of the Damages above, is ___________. 3. The number of Escrow Shares equivalent in value to the Damages above (calculated by dividing the total amount of the Damages by the Escrow Share Value) is ____________. 4. The Damages shall be allocated among the Shareholders, in proportion to their percentage interests in the Escrow Fund, as follows:
- ---------------------------------------------------------------------------------------------- Name of Shareholder Number of Escrow Shares equal Number of Escrow Shares equal to Shareholder's portion of the to Shareholder's portion of actual or potential Damages the Set Aside Amount (if applicable) ============================================================================================== - ---------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------- ============================================================================================== TOTAL - ---------------------------------------------------------------------------------------------- *Additional Shareholders are attached hereto.
IN WITNESS WHEREOF, the undersigned has hereunto signed his name. Dated: ------------------------------- Name: Title: ANNEX D ------- FEES OF ESCROW AGENT -------------------- 15 basis points of the highest value of collateral held on deposit per annum or any part thereof without proration for partial years, subject to a minimum of $7,500.00 per annum or any part thereof without proration for partial years (includes investment in a Chase Manhattan Bank Money Market Account, Chase Manhattan Bank Deposit Acount or The Chase Manhattan Bank Mutual Fund known as the Vista Fund). $75 per investment (excludes Money Market, Deposit Account or Vista Fund Investments). ANNEX E ------- TELEPHONE NUMBER(S) FOR CALL-BACKS AND PERSON(S) DESIGNATED TO CONFIRM FUNDS TRANSFER INSTRUCTIONS ----------------------------------------------------------- If to Parent: NAME TELEPHONE NUMBER ---- ---------------- 1. Curt Snyder (212) 253-5207 2. Jennifer Fleissner (212) 253-5285 3. Cynthia Alegre (212) 253-4602 If to Shareholders' Agent: NAME TELEPHONE NUMBER ---- ---------------- 1. _________________ _______________ 2. _________________ _______________ 3. _________________ _______________ Telephone call-backs shall be made to both Parent and Shareholders' Agent if joint instructions are required pursuant to this Escrow Agreement. EX-10.6 5 0005.txt EXHIBIT 6 CHANGE OF SHAREHOLDERS' AGENT AGREEMENT This CHANGE OF SHAREHOLDERS' AGENT AGREEMENT (this "Agreement") is entered into as of October 12, 2000, by and among E*TRADE Group, Inc., a Delaware corporation ("E*TRADE"), and certain shareholders (the "Shareholders") of E*OFFERING Corp., a California corporation (the "Company"). Capitalized terms used and not otherwise defined in this Agreement shall have the respective meanings assigned to such terms in the Agreement and Plan of Merger, dated as of May 15, 2000, as amended pursuant to the Amendment Agreement dated as of September 26, 2000 (as so amended, the "Merger Agreement"), by and among Wit SoundView Group, Inc. (formerly Wit Capital Group, Inc., the "Parent"), Wit SoundView Corporation ("Wit") and the Company. RECITALS WHEREAS, pursuant to the Merger Agreement, an Escrow Fund consisting of ten percent (10%) of the Parent Shares issued thereunder will be established to compensate Indemnified Persons for certain Damages; WHEREAS, E*TRADE and the Shareholders desire to change the Shareholders' Agent under the Merger Agreement from E*TRADE to General Atlantic Partners 61, L.P. NOW, THEREFORE, the parties hereto agree as follows: 1. SHAREHOLDERS' AGENT. Pursuant to Section 10.7 of the Merger Agreement, the holders of a majority in interest of the Escrow Fund hereby remove E*TRADE as Shareholders' Agent and constitute and appoint General Atlantic Partners 61, L.P. ("General Atlantic") as Shareholders' Agent for and on behalf of the shareholders of the Company to give and receive notices and communications, to authorize delivery to Parent of the Parent Shares from the Escrow Fund in satisfaction of claims by Parent, to object to such deliveries, to agree to, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to such claims, and to take all action necessary or appropriate in the judgment of the Shareholders' Agent for the accomplishment of the foregoing. General Atlantic, in its capacity as Shareholders' Agent, shall have the rights and obligations of the Shareholders' Agent as set forth in the Merger Agreement, including, without limitation, Article X. This change in agency will take effect upon ten (10) days' prior written notice to all of the Company shareholders and to Parent. 2. Further Assurances. Each of the parties hereto shall enter into such other instruments and documents, and take such further actions, as are reasonably necessary to effect the purposes of this Agreement. 3. Acknowledgment. Each of the parties hereto acknowledges and agrees that each other party has given them the opportunity to seek, and has recommended that such 1 parties obtain, independent legal advice with respect to the subject matter of this Agreement. Further, each of the parties hereto hereby represent and warrant to each of the other parties that such party has sought such independent legal advice or has knowingly waived such advice. 4. Assignment. No party may, without the prior express written consent of each other party, assign this Agreement in whole or in part. This Agreement shall be binding upon and inure to the benefit of the respective permitted successors and assigns of the parties hereto, and may only be amended or modified pursuant to a written instrument executed by each of the parties hereto. 5. Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware (other than the conflicts of law principles thereof). Each of the parties hereto irrevocably consents to the exclusive jurisdiction of any court located within the State of Delaware, 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 Delaware for such persons and waives and covenants not to assert or plead any objection which they might otherwise have to such jurisdiction and such process. 6. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart. [SIGNATURE PAGE FOLLOWS] 2 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf as of the date first written above. E*TRADE Group, Inc. By: /s/ Theodore J. Theophilos ---------------------------------- Name: Theodore J. Theophilos Title: Chief Legal Affairs Officer and Corporate Secretary /s/ Walter Cruttenden --------------------------------------- Walter W. Cruttenden Cruttenden Partners LLC By: /s/ Walter Cruttenden ---------------------------------- Name: Walter W. Cruttenden Title: Managing Member /s/ Frank W. Cutler --------------------------------------- Frank Cutler --------------------------------------- Christopher Cruttenden /s/ Sanford R. Robertson --------------------------------------- Sanford R. Robertson GAP Coinvestment Partners II, L.P. By: /s/ Matthew Nimetz ---------------------------------- Name: Matthew Nimetz Title: A General Partner General Atlantic Partners 61, L.P. By: General Atlantic Partners LLC, its general partner By: /s/ Matthew Nimetz ---------------------------------- Name: Matthew Nimetz Title: Managing Member New Enterprise Associates 9 L.P. By: NEA Partners 9, L.P., its general partner By: /s/ Peter T. Morris ---------------------------------- Name: Peter T. Morris Title: General Partner NEA Ventures 2000 L.P. By: /s/ Jacqueline Myers ---------------------------------- Name: Jacqueline Myers Title: Vice President Battery Ventures V L.P. By: /s/ Kenneth P. Lawler ---------------------------------- Name: Kenneth P. Lawler Title: Member Manager Crosspoint Venture Partners 2000 By: /s/ Robert A. Hoff ---------------------------------- Name: Robert A. Hoff Title: General Partner Softbank Technology Ventures V L.P. By: SBTV LLC By: ---------------------------------- Name: Title: Softbank Technology Advisors Fund V L.P. By: SBTV LLC By: ---------------------------------- Name: Title: Softbank Technology Entrepreneurs Fund V L.P. By: SBTV LLC By: ---------------------------------- Name: Title: ACKNOWLEDGED: E*OFFERING, Inc. By: /s/ Steven R. King ----------------------------- Name: Steven R. King Title: Interim President EX-10.7 6 0006.txt EXHIBIT 7 SHARE REALLOCATION AND ESCROW PARTICIPATION AGREEMENT This SHARE REALLOCATION AND ESCROW PARTICIPATION AGREEMENT (this "Agreement") is entered into as of September 30, 2000, by and among E*TRADE Group, Inc., a Delaware corporation ("E*TRADE"), and the shareholders of E*OFFERING Corp., a California corporation ( the "Company") listed on Exhibit A hereto (the "Shareholders"). Capitalized terms used and not otherwise defined in this Agreement shall have the respective meanings assigned to such terms in the Agreement and Plan of Merger, dated as of May 15, 2000, as amended pursuant to the Amendment Agreement dated as of September 26, 2000 (as so amended, the "Merger Agreement"), by and among Wit SoundView Group, Inc. (formerly Wit Capital Group, Inc., the "Parent"), Wit SoundView Corporation ("Wit") and the Company. RECITALS WHEREAS, pursuant to the Merger Agreement, an Escrow Fund consisting of ten percent (10%) of the Parent Shares issued thereunder will be established to compensate Indemnified Persons for certain Damages; WHEREAS, in order to facilitate the transactions contemplated by the Merger Agreement, E*TRADE has agreed to certain amendments to its Strategic Alliance Agreement dated May 15, 2000 (the "Alliance Agreement"), with the Parent; and WHEREAS, in order to induce E*TRADE to enter into such amendments, the Shareholders desire to cause certain of their Escrow Shares to be deposited into the Escrow Fund in lieu of Parent Shares issuable to E*TRADE in the Merger which would otherwise be deposited into the Escrow Fund under the current terms of the Merger Agreement, and to adjust their beneficial interests in the Escrow Fund accordingly. In addition, the parties hereto further desire to adjust the Final Allocation Schedule in order to reallocate the Parent Shares to be received as part of the Aggregate Consideration in the Merger. NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for E*TRADE's agreement to certain amendments to the Alliance Agreement, the parties hereto agree as follows: 1. ESCROW ALLOCATION SCHEDULE. Notwithstanding anything to the contrary in the Merger Agreement, the Final Allocation Schedule of Parent Shares to be deposited into the Escrow Fund shall be adjusted at the Effective Time so as to not include any Parent Shares beneficially owned by E*TRADE or affiliates controlled, in whole or in part, by E*TRADE. The number of Parent Shares beneficially owned by E*TRADE and such affiliates that would otherwise be included on the Final Allocation Schedule and contributed into the Escrow Fund as Escrow Shares pursuant to the terms of the Merger Agreement shall instead be comprised, in the aggregate, of an equal number (not to exceed 800,000) of Parent Shares (the "Participation Shares") beneficially owned by the Shareholders listed on Exhibit A hereto. At the Effective Time, the Participation Shares shall be allocated to, and contributed and deposited in escrow on behalf of, each Shareholder on a pro rata basis in the proportion which the number of Parent Shares issued to each such Shareholder bears to the total number of Parent Shares issued to all of the Shareholders in the Merger, and by way of illustration such allocation according to the Preliminary Allocation Schedule under the Merger Agreement is set forth on the Allocation Schedule attached hereto as Exhibit A. For the avoidance of confusion, the parties will inform the Exchange Agent and the Escrow Agent of the substitution of the Participation Shares as Escrow Shares in lieu of Parent Shares issuable to E*TRADE in the Merger, as well as the beneficial ownership interests of the Shareholders in the Participation Shares, promptly following the Effective Time of the Merger, based upon the final number of Parent Shares issued to each Shareholder as set forth on the Final Allocation Schedule. Following the deposit of the Participation Shares into the Escrow Fund as provided hereunder, the Shareholders will continue to have all right, title and interest in and to their Participation Shares, subject to the terms of the Merger Agreement and the Escrow Agreement. 2. REALLOCATION SCHEDULE. Notwithstanding anything to the contrary in the Merger Agreement, the Final Allocation Schedule shall be adjusted at the Effective Time so as to provide that 1,200,000 Parent Shares that would otherwise be allocated on the Final Allocation Schedule to the Shareholders pursuant to the terms of the Merger Agreement, shall instead be allocated to E*TRADE in accordance with the terms of this Agreement (the "Reallocation Shares"). At the Effective Time, the Reallocation Shares shall be allocated from and on behalf of each Shareholder on a pro rata basis in the proportion which the number of Parent Shares issued to each such Shareholder bears to the total number of Parent Shares issued to all of the Shareholders in the Merger, and such allocation is set forth on the Allocation Schedule attached hereto as Exhibit A. Notwithstanding anything herein to the contrary, the foregoing reallocation of Parent Shares shall not affect or be taken into account in determining the number of Escrow Shares deposited in the Escrow Fund for the account of any particular Shareholder, it being understood that ten percent (10%) of the total number of Parent Shares issuable to each Shareholder before giving effect to the reallocation of Reallocation Shares (i.e. assuming solely for such purposes no such reallocation) shall be so deposited into the Escrow Fund for the account of such Shareholder. For the avoidance of confusion, the parties will inform the Exchange Agent and the Escrow Agent of the redistribution of the Reallocation Shares from the Shareholders to E*TRADE promptly following the Effective Time of the Merger. Following the distribution of the Reallocation Shares to E*TRADE as provided hereunder, E*TRADE will have all right, title and interest in and to the Reallocation Shares. 3. FURTHER ASSURANCES. Each of the parties hereto shall enter into such other instruments and documents, and take such further actions, as are reasonably necessary to effect the purposes of this Agreement. 4. ACKNOWLEDGMENT. Each of the parties hereto acknowledges and agrees that each other party has given them the opportunity to seek, and has recommended that such parties obtain, independent legal advice with respect to the subject matter of this Agreement. Further, each of the parties hereto hereby represent and warrant to each of the other parties that such party has sought such independent legal advice or has knowingly waived such advice. 5. ASSIGNMENT. No party may, without the prior express written consent of each other party, assign this Agreement in whole or in part. This Agreement shall be binding upon and inure to the benefit of the respective permitted successors and assigns of the parties hereto, and may only be amended or modified pursuant to a written instrument executed by each of the parties hereto. 6. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware (other than the conflicts of law principles thereof). Each of the parties hereto irrevocably consents to the exclusive jurisdiction of any court located within the State of Delaware, 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 Delaware for such persons and waives and covenants not to assert or plead any objection which they might otherwise have to such jurisdiction and such process. 7. COUNTERPARTS. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart. [SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf as of the date first written above. E*TRADE Group, Inc. By: /s/ Theodore J. Theophilos ---------------------------------- Name: Theodore J. Theophilos Title: Chief Legal Affairs Officer /s/ Walter Cruttenden --------------------------------------- Walter W. Cruttenden Cruttenden Partners LLC By: /s/ Walter Cruttenden ---------------------------------- Name: Walter W. Cruttenden Title: Managing Member /s/ Frank Cutler --------------------------------------- Frank Cutler /s/ Christopher Cruttenden --------------------------------------- Christopher Cruttenden /s/ Sanford R. Robertson --------------------------------------- Sanford Robertson GAP Coinvestment Partners II LP By: /s/ Matthew Nimetz ---------------------------------- Name: Matthew Nimetz Title: A General Partner General Atlantic Partners 61 LP By: General Atlantic Partners LLC, its general partner By: /s/ Matthew Nimetz ---------------------------------- Name: Matthew Nimetz Title: A Managing Member New Enterprise Associates 9 L.P. By: NEA Partners 9, L.P., its general partner By: /s/ Thomas C. McConnell ---------------------------------- Name: Thomas C. McConnell Title: General Partner NEA Ventures 2000 L.P. By: /s/ Jacqueline Myers ---------------------------------- Name: Jacqueline Myers Title: Vice President Battery Ventures V L.P. By: /s/ Kenneth P. Lawler ---------------------------------- Name: Kenneth P. Lawler Title: Member Manager Crosspoint Venture Partners 2000 By: /s/ R.A. Hoff ---------------------------------- Name: R.A. Hoff Title: General Partner Softbank Technology Ventures V L.P. By: SBTV LLC By: ---------------------------------- Name: Title: Softbank Technology Advisors Fund V L.P. By: SBTV LLC By: ---------------------------------- Name: Title: Softbank Technology Entrepreneurs Fund V L.P. By: SBTV LLC By: ---------------------------------- Name: Title: ACKNOWLEDGED: E*OFFERING, Inc. By: /s/ Steven R. King ----------------------------- Name: Steven R. King Title: President Wit Capital Group, Inc. By: /s/ Mark F. Loehr ----------------------------- Name: Mark F. Loehr Title: Co-President Wit Soundview Corporation By: /s/ Mark F. Loehr ----------------------------- Name: Mark F. Loehr Title: Co-President EXHIBIT A SHAREHOLDERS AND ALLOCATION SCHEDULE Escrow Shares Merger Shares Reallocated to E*TRADE Reallocated to E*TRADE Shareholder Name (Participation Shares) (Reallocation Shares) - ---------------- ---------------------- --------------------- Walter W. Cruttenden 61,847 93,073 Cruttenden Partners LLC 17,303 26,040 Frank Cutler 46,719 70,307 Christopher Cruttenden 6,106 9,188 Sanford Robertson 71,686 107,878 General Atlantic Coinvestment Partners II LP 64,038 96,367 General Atlantic Partners 61 LP 296,806 446,659 New Enterprise Associates 9 L.P. 70,935 106,749 NEA Ventures 2000 L.P. 71 107 Battery Ventures V L.P. 21,302 32,057 Crosspoint Venture Partners 2000 21,302 32,057 Softbank Technology Ventures V L.P. 114,196 171,852 Softbank Technology Ventures Advisors Fund V L.P. 3,042 4,578 Softbank Technology Ventures Entrepreneurs Fund V L.P. 2,052 3,088 TOTAL 797,405 1,200,000 Note: The above figures are based on the Preliminary Allocation Schedule. At the time of closing, the above figures will be revised to reflect the Final Allocation Schedule, PROVIDED, HOWEVER, that in no event shall the Participation Shares exceed 800,000 in the aggregate. EX-10.8 7 0007.txt EXHIBIT 8 SPECIAL ESCROW AGREEMENT THIS ESCROW AGREEMENT, dated as of October 16, 2000 (the "Escrow Agreement"), is by and among Wit SoundView Group, Inc., a corporation organized under the laws of Delaware ("Parent"), E*TRADE Group, Inc. as the agent (the "Shareholders' Agent") of certain shareholders, each of whom is listed on ANNEX A hereto (individually, a "Shareholder" and collectively the "Shareholders") of E*OFFERING Corp., a California corporation (the "Company"), and The Chase Manhattan Bank as escrow agent (the "Special Escrow Fund Agent"). Capitalized terms not otherwise defined in this Escrow Agreement have the meanings ascribed to them in the Merger Agreement (as defined below). Pursuant to the Agreement and Plan of Merger, dated as of May 15, 2000 (the "Merger Agreement"), and as amended on September 26, 2000 (the "Amendment Agreement"), by and among Parent, Wit SoundView Corp., a corporation organized under the laws of the State of Delaware ("Merger Sub"), and the Company, the Company has been merged with and into Merger Sub (the "Merger"). Pursuant to Section 4.2 of the Merger Agreement, __________ shares of common stock, $0.01 par value per share, of Parent (the "Special Escrow Shares") are being deposited by Parent into the escrow fund established hereunder (the "Special Escrow Fund") under Article IV of the Merger Agreement. NOW THEREFORE, the parties hereto agree as follows: 1. ESTABLISHMENT OF ESCROW. Pursuant to Section 4.2(d) of the Merger Agreement, Parent has delivered to the Special Escrow Fund Agent and the Special Escrow Fund Agent acknowledges receipt of the Special Escrow Shares in the form of stock certificates registered in the name of Cudd & Co. as nominee for the Special Escrow Fund Agent. The name and address of each Shareholder, the number of Special Escrow Shares initially being deposited on each Shareholder's behalf and (if applicable) the taxpayer identification of each Shareholder are set forth in ANNEX A attached hereto. The Special Escrow Fund Agent shall hold the Special Escrow Shares, and any dividends or other distributions on the Special Escrow Shares and other securities or property into which the Special Escrow Shares may be converted or reclassified into or exchanged for, in escrow, in its name or the name of its nominee, in accordance with this Escrow Agreement. The Special Escrow Shares shall not be subject to any lien, attachment, trustee process or any other judicial process of any creditor of any party hereto. The Special Escrow Fund Agent shall have no responsibility for the genuineness, validity, market value, title or sufficiency for any intended purpose of the Special Escrow Shares. The Special Escrow Fund Agent shall be under no obligation to preserve, protect or exercise rights in the Special Escrow Shares, and shall be responsible only for reasonable measures to maintain the physical safekeeping thereof, and otherwise to perform and observe such duties on its part as are expressly set forth in this Escrow Agreement. Notwithstanding the foregoing, if the Special Escrow Fund Agent is so requested in a written request of the Shareholders' Agent received by the Special Escrow Fund Agent at least three (3) business days prior to the date on which the Special Escrow Fund Agent is requested therein to take such action (or such later date as may be acceptable to the Special Escrow Fund Agent), the Special Escrow Fund Agent shall execute or cause its nominee to execute, and deliver to the Shareholders' Agent a proxy or other instrument in the form supplied to it by the Shareholders' Agent for voting or otherwise exercising any right of consent with respect to any of the Special Escrow Shares held by it hereunder, to authorize therein the Shareholders' Agent to exercise such voting or consent authority in respect of the Special Escrow Shares (provided that the Special Escrow Fund Agent shall not be obliged to execute any such proxy or other instrument if, in its judgment, the terms thereof may subject the Special Escrow Fund Agent to any liabilities or obligations in its individual capacity). The Special Escrow Fund Agent shall not be responsible for forwarding to any party, notifying any party with respect to, or taking any action with respect to, any notice, solicitation or other document or information, written or otherwise, received from Parent or other person with respect to the Special Escrow Shares, including but not limited to, proxy material, tenders, options, the pendency of calls and maturities and expiration of rights. 2. DIVIDENDS AND DISTRIBUTIONS ON SPECIAL ESCROW SHARES. The Special Escrow Fund Agent shall invest all cash dividends and other cash distributions, if any, on the Special Escrow Shares (such cash dividends and other cash distributions are referred to herein as the "Escrow Cash Dividends") at, and pursuant to, the written direction of the Shareholders' Agent in Eligible Investments (as defined below) (including any interest earned thereon) and shall not be responsible or liable for any loss accruing from any investment made in accordance herewith, and the Special Escrow Fund Agent shall hold any noncash dividends and other noncash distributions on the Special Escrow Shares. Dividends payable in securities or other distributions of any kind, whether by way of stock dividends, stock splits or otherwise, shall be delivered to the Special Escrow Fund Agent and added to the Special Escrow Fund and become a part of the Special Escrow Fund. Such securities or other distributions shall be considered Special Escrow Shares for purposes hereof and allocated pursuant to the terms of this Escrow Agreement. "Eligible Investments" means (a) obligations issued or guaranteed by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support of interest and principal thereto); (b) certificates of deposit of any domestic commercial bank having capital and surplus in excess of $500,000,000; (c) repurchase obligations for underlying securities of the type described in clause (a); (d) shares of any registered money market fund at least ninety-five percent (95%) of the assets of which constitute obligations of the type described in clause (a) above; (e) a trust account with The Chase Manhattan Bank (thirty (30) day libor minus fifty (50) bps); or (f) one or more portfolios of The Chase Vista Money Market Mutual Funds, for which affiliates of The Chase Manhattan Bank provide investment advisory and shareholder services for a fee as described in the prospectus for these funds which has been provided to the parties hereto, in addition to a twenty-five (25) basis point fee as compensation for administrative and accounting services provided to clients. No investment except for investments in money market funds shall have a term of more than thirty (30) days. If otherwise qualified, obligations of the Special Escrow Fund Agent shall qualify as Eligible Investments. 2 Absent its timely receipt of such specific written investment instruction from the Shareholders' Agent, the Special Escrow Fund Agent shall have no obligation or duty to invest (or otherwise pay interest on) the Escrow Funds. All earnings received from the investment of the Escrow Cash Dividends shall be credited to, and shall become a part of, the Special Escrow Fund (and any losses on such investments shall be debited to the Special Escrow Fund). The Special Escrow Fund Agent shall have no liability for any investment losses, including any losses on any investment required to be liquidated prior to maturity in order to make a payment required hereunder. All trust investment orders involving Treasuries, commercial paper and other direct investments will be executed through Chase Asset Management (CAM), in the investment management division of The Chase Manhattan Bank. Subject to the principles of best execution, transactions are effected on behalf of the account through a broker dealer selected by CAM. In this regard, CAM seeks to attain the best overall result for the account, taking into consideration quality of service and reliability. An agency fee will be assessed in connection with each transaction. Periodic statements will be provided to Parent and Shareholders' Agent reflecting transactions executed on behalf of the Escrow Fund. The Parent and Shareholders' Agent, upon written request, will receive a statement of transaction details upon completion of any securities transaction in the Escrow Fund without any additional cost. 3. TAX TREATMENT AND ALLOCATION. Dividends and other distributions on the Special Escrow Shares shall be allocable for tax purposes to the Shareholders in proportion to their respective Special Escrow Shares at the time of such allocation, and the Shareholders will include any such allocations constituting income in their gross income for federal, state and local income tax purposes and pay any tax resulting therefrom. Any interest or other earnings on the Special Escrow Shares and Escrow Cash Dividends shall be allocable for tax purposes to Parent. Parent and the Shareholders' Agent will provide the Special Escrow Fund Agent with certified tax identification numbers for each of Parent and the Shareholders by furnishing appropriate Forms W-9 (or Forms W-8, in the case of non-U.S. persons) and other forms and documents that the Special Escrow Fund Agent may reasonably request to the Special Escrow Fund Agent within fourteen (14) days of the date hereof. The parties hereto acknowledge that in the event that a Shareholder's tax identification number is not certified to the Special Escrow Fund Agent, the Special Escrow Fund Agent may be required to withhold a portion of any interest, dividends or other income earned on the Escrow Fund. The Special Escrow Fund Agent will be permitted to withhold and pay to the appropriate taxing authority any amount of the Special Escrow Shares, Escrow Cash Dividends and earnings thereon that the Special Escrow Fund Agent in its determination reasonably believes is required to be withheld and paid to the applicable taxing authority. 4. TAX INDEMNIFICATION. Each Shareholder: (i) assumes any and all obligations imposed now or hereafter by any applicable tax law with respect to any payment or distribution of the Special Escrow Shares or Escrow Cash Dividends, or performance of other activities under this Escrow Agreement, with respect to the Shareholder's Special Escrow Shares; (ii) shall instruct the Shareholders' Agent to instruct the Special Escrow Fund Agent in writing with respect to the Special Escrow Fund Agent's responsibility for withholding and other taxes, 3 assessments or other governmental charges, and shall instruct the Shareholders' Agent to instruct the Special Escrow Fund Agent with respect to any certifications and governmental reporting that may be required under any laws or regulations that may be applicable in connection with its acting as Special Escrow Fund Agent under this Escrow Agreement with respect to the Shareholder's Special Escrow Shares; and (iii) shall indemnify and hold the Special Escrow Fund Agent harmless from any liability or obligation on account of taxes, assessments, additions for late payment, interest, penalties, expenses and other governmental charges that may be assessed or asserted against the Special Escrow Fund Agent in connection with or relating to any payment made or other activities performed under this Escrow Agreement with respect to the Shareholder's Special Escrow Shares, including without limitation any liability for the withholding or deduction of (or the failure to withhold or deduct) the same, and any liability for failure to obtain proper certifications or to report properly to governmental authorities in connection with this Escrow Agreement, including costs and expenses (including reasonable legal fees and expenses), interest and penalties. 5. ESCROW PERIOD. This escrow shall commence on the date hereof and shall terminate on October 16, 2003 ("Escrow Period"). 6. THE SPECIAL ESCROW FUND AGENT. (a) The Special Escrow Fund Agent shall not be liable for any act or failure to act under this Escrow Agreement, including any and all claims made against the Special Escrow Fund Agent as a result of its holding the Special Escrow Shares or Escrow Cash Dividends in its own name, except for its own gross negligence, bad faith or willful misconduct. Subject to the foregoing, the Special Escrow Fund Agent shall not be liable for, and Parent and the Shareholders' Agent shall, jointly and severally, indemnify and hold harmless the Special Escrow Fund Agent and its directors, employees, officers, agents, successors and assigns against any losses or claims (including reasonable out-of-pocket expenses and attorney fees) arising out of any action taken or omitted hereunder and reasonable costs of investigation and counsel fees and expenses which may be imposed on the Special Escrow Fund Agent or reasonably incurred by it in connection with its acceptance of this appointment or performance of its duties hereunder. The Special Escrow Fund Agent may decline to act and shall not be liable for failure to act if in doubt as to its duties under this Escrow Agreement. The Special Escrow Fund Agent may act upon any instrument or signature (including wire transfer instructions) believed by it to be genuine and may assume that any person purporting to give any notice or instruction hereunder, believed by it to be authorized, has been duly authorized to do so. The Special Escrow Fund Agent's duties shall be determined only with reference to the express duties set forth in this Escrow Agreement, each of which duties are ministerial in nature, and applicable law. The Special Escrow Fund Agent shall not be deemed to be a fiduciary and is not charged with knowledge of or any duties or responsibilities in connection with any other document or agreement, including without limitation, the Merger Agreement. The parties hereto agree that the use of defined terms incorporated by reference to the Merger Agreement is solely for the convenience of the other parties, and the Special Escrow Fund Agent may rely on the use of defined terms in any communication received by it. In no event will the Special Escrow Fund Agent be liable for punitive, special or consequential damages or losses (including lost profits) 4 whatsoever, even if the Special Escrow Fund Agent has been informed of the likelihood of such damages or losses. The parties hereto acknowledge that the foregoing indemnities shall survive the resignation or removal of the Special Escrow Fund Agent or the termination of this Escrow Agreement. (b) On the last business day of the calendar month following the month of the date of this Escrow Agreement, and on the last business day of each calendar month thereafter during the Escrow Period, the Special Escrow Fund Agent shall release one thirty-sixth of the Special Escrow Shares, in accordance with the Schedule as set forth in ANNEX B, to the Shareholders' addresses as set forth in ANNEX A. PROVIDED, HOWEVER, that in the event of a Change in Control (as defined in the Strategic Alliance Agreement) with respect to the Shareholders' Agent and a non-assumption of the Strategic Alliance Agreement by the acquiring or successor entity, Parent or the Shareholders' Agent shall deliver to both the Special Escrow Fund Agent and the other party a certificate indicating that a Change in Control with respect to the Shareholders' Agent has occurred. In such event, unless the Special Escrow Fund Agent receives a Dispute Notice (as defined below), within fourteen (14) days after receiving such certificate from Parent or the Shareholders' Agent, the Special Escrow Fund Agent shall (i) deliver all remaining Special Escrow Shares in the Special Escrow Fund to Parent's transfer agent with instruction to distribute the Special Escrow Shares to Parent for cancellation, and (ii) deliver any and all Escrow Cash Dividends, interest and other earnings on the Special Escrow Shares to Parent via check to Parent's address in Section 10. PROVIDED, FURTHER, that in the event of a Change in Control (as defined in the Strategic Alliance Agreement) with respect to Parent, Parent or the Shareholders' Agent shall deliver to both the Special Escrow Fund Agent and the other party a certificate indicating that a Change in Control with respect to Parent has occurred. In such event, unless the Special Escrow Fund Agent receives a Dispute Notice (as defined below), within fourteen (14) days after receiving such certificate from Parent or the Shareholders' Agent, the Special Escrow Fund Agent shall (i) deliver all remaining Special Escrow Shares in the Special Escrow Fund (which Special Escrow Shares shall be delivered in the name of the Shareholders' Agent) to the Shareholders' Agent at the Shareholders' Agent's address in Section 10 with instructions to distribute the Special Escrow Shares to the Shareholders in accordance with their respective percentage interests in the Special Escrow Fund as set forth in ANNEX A, (ii) deliver any and all Escrow Cash Dividends on the Special Escrow Shares to the Shareholders' Agent via check to the Shareholders' Agent's address in Section 10 with instructions to distribute such Escrow Cash Dividends to the Shareholders in accordance with their percentage interests in the Special Escrow Fund as set forth in ANNEX A and (iii) deliver any interest or other earnings on Special Escrow Share dividends or other distributions to Parent via check to Parent's address in Section 10. The Special Escrow Fund Agent shall instruct Parent's transfer agent that any Special Escrow Shares released from the Special Escrow Fund shall continue to bear the legend on prohibition of transfer pursuant to Section 4.2(b) of the Merger Agreement to the extent that such prohibition continues to apply to such Special Escrow Shares at the time of such release. (c) If, at any time during the Escrow Period, the number of the Special Escrow Shares to be distributed to the Shareholders' Agent pursuant to this Escrow Agreement is not evenly divisible by a whole number, the number of Special Escrow 5 Shares to be distributed to the Shareholders' Agent shall be rounded down to the next lowest number of Special Escrow Shares, and the Special Escrow Fund Agent shall cause Parent's transfer agent to distribute that number of Special Escrow Shares to the Shareholders' Agent. In lieu of the additional fractional Special Escrow Share interest to which the Shareholders' Agent is entitled, Parent shall furnish the Special Escrow Fund Agent cash equal to the value of such fractional Special Escrow Share interest, which value shall be set forth in a certificate delivered to the Special Escrow Fund Agent by both Parent and the Shareholders' Agent, and the Special Escrow Fund Agent shall pay such cash to the Shareholders' Agent via check to the address of the Shareholders' Agent in Section 10. Parent shall be deemed to have purchased such fractional Special Escrow Share interest with respect to which it has furnished funds to the Special Escrow Fund Agent. (d) If Parent or the Shareholders' Agent, in good faith, disputes any claim (in whole or in part) in a certificate made pursuant to this Section 6, the Shareholders' Agent or Parent shall give written notice thereof ("Dispute Notice") to the other party and to the Special Escrow Fund Agent, and the Special Escrow Fund Agent must receive such Dispute Notice within fourteen (14) days after the date the Special Escrow Fund Agent received the related certificate. If the Special Escrow Fund Agent timely receives the Dispute Notice, the Special Escrow Fund Agent shall continue to hold the Special Escrow Shares in accordance with the terms of this Escrow Agreement, and no distribution of the Special Escrow Shares shall be made by the Special Escrow Fund Agent to Parent or to the Shareholders until either (i) such disputed claim has been resolved as evidenced by a written notice executed by Parent and the Shareholders' Agent instructing the Special Escrow Fund Agent as to the distribution of the Special Escrow Shares relative to each Shareholder's account, or (ii) such dispute shall have been adjudicated in accordance with the arbitration procedures described in Section 6(e) hereof and the Special Escrow Fund Agent has received such documents as are specified therein. (e) If the Special Escrow Fund Agent does not receive written notice executed by Parent and the Shareholders' Agent within forty-five days (45) after the Special Escrow Fund Agent receives the Dispute Notice to the effect that the dispute has been resolved, the claim shall be referred to an arbitrator in accordance with Section 13.1 of the Merger Agreement. The Special Escrow Fund Agent shall distribute or continue to hold the Special Escrow Shares in accordance with the final arbitration determination, in each case as and to the extent allowed as soon as practicable following its receipt of a copy of the arbitration determination. Such arbitration decision must specify the distribution of the Special Escrow Shares relative to each Shareholder's position. (f) The Special Escrow Fund Agent shall have the right at any time to resign hereunder by giving written notice of its resignation to the parties hereto, at the addresses set forth herein or at such other address as the parties shall provide, at least thirty days prior to the date specified for such resignation to take effect. The Special Escrow Fund Agent shall have the right to withhold an amount equal to any amount due and owing to the Special Escrow Fund Agent, plus any costs and expenses the Special Escrow Fund Agent shall reasonably believe may be incurred by the Special Escrow Fund Agent in connection with the termination of this Escrow Agreement. In such event Parent shall with the approval of the Shareholders' Agent, which approval shall not be unreasonably withheld, appoint a successor Special Escrow Fund Agent within that thirty-day period; if Parent does not designate a successor Special Escrow Fund 6 Agent within such period, the Special Escrow Fund Agent may appoint a successor Special Escrow Fund Agent. Upon the effective date of such resignation, the Special Escrow Shares and Escrow Cash Dividends then held by the Special Escrow Fund Agent hereunder shall be delivered by it to such successor Special Escrow Fund Agent or as otherwise shall be designated in writing by Parent and the Shareholders' Agent. If no successor Special Escrow Fund Agent is appointed as provided herein, the Special Escrow Fund Agent may apply to a court of competent jurisdiction for appointment of a successor Special Escrow Fund Agent. (g) In the event that the Special Escrow Fund Agent shall be uncertain as to its duties or rights hereunder or shall receive instructions, claims or demands from any party hereto which, in its opinion, conflict with any of the previsions of this Escrow Agreement, it shall be entitled to refrain from taking any action and its sole obligation shall be to keep safely all property held in escrow until it shall be directed otherwise in writing by all of the other parties hereto or by a final order or judgment of a court of competent jurisdiction. The Special Escrow Fund Agent may consult counsel satisfactory to it, including in-house counsel, and will be protected in respect of any action taken or omitted in reliance thereon. (h) The Special Escrow Fund Agent may execute any of its powers or responsibilities hereunder and exercise any rights hereunder, either directly or by or through its agents or attorneys. Nothing in this Escrow Agreement shall be deemed to impose upon the Special Escrow Fund Agent any duty to qualify to do business in any jurisdiction other than New York or to act as fiduciary. The Special Escrow Fund Agent shall not be responsible for and shall not be under a duty to examine, inquire into or pass upon the validity, binding effect, execution or sufficiency of this Escrow Agreement or of any amendment or supplement hereto. 7. TERMINATION. (a) Upon the termination of the Escrow Period ("Termination Date"), the Special Escrow Fund Agent shall deliver any and all remaining Special Escrow Shares and Escrow Cash Distributions to the Shareholders' Agent with instructions to deliver to the Shareholders according to their respective Special Escrow Shares then held in escrow. Special Escrow Shares delivered in this manner upon the Termination Date shall be registered in the name of the Shareholders' Agent. The Special Escrow Fund Agent shall deliver any interest or other earnings on Special Escrow Share dividends or other distributions to Parent via check to Parent's address in Section 10. This Escrow Agreement shall terminate upon the later of the Termination Date or the distribution of all the Special Escrow Shares in accordance with this Escrow Agreement, provided that Section 4 shall survive termination of this Escrow Agreement. (b) If, upon the Termination Date, the number of Special Escrow Shares to be delivered to the Shareholders' Agent pursuant to this Escrow Agreement is not a whole number, the number of Special Escrow Shares to be delivered to the Shareholders' Agent shall be rounded down to the next lowest number of Special Escrow Shares, and the Special Escrow Fund Agent shall cause Parent's transfer agent to distribute that number of Special Escrow Shares to the Shareholders' Agent. In lieu of the additional fractional Special Escrow Share interest to which the Shareholders' Agent is entitled, Parent shall furnish the Special Escrow Fund Agent cash equal to the value of such fractional Special Escrow Share interest, 7 which value shall be set forth in a certificate delivered to the Special Escrow Fund Agent by both Parent and the Shareholders' Agent, and the Special Escrow Fund Agent shall pay such cash to the Shareholders' Agent via check to the address of the Shareholders' Agent as set forth in Section 10. Parent shall be deemed to have purchased such fractional Special Escrow Share interest with respect to which it has furnished funds to the Special Escrow Fund Agent. 8. ESCROW FEES AND EXPENSES. Parent agrees to (i) pay the Special Escrow Fund Agent upon execution of this Escrow Agreement and annually thereafter reasonable compensation for the services to be rendered hereunder, which unless otherwise agreed in writing shall be as set forth in ANNEX C attached hereto, and (ii) pay or reimburse the Special Escrow Fund Agent upon request for all expenses, disbursements and advances, including reasonable attorneys' fees and expenses, incurred or made by it in connection with the preparation, execution, performance, delivery, modification and termination of this Escrow Agreement. 9. SHAREHOLDERS' AGENT. The Shareholders' Agent represents and warrants to Parent and the Special Escrow Fund Agent that it is authorized to execute this Escrow Agreement for and on behalf of the Shareholders and to take any action deemed by it appropriate or necessary to carry out the provisions of, and to determine the rights of the Shareholders under, this Escrow Agreement. The Shareholders' Agent shall serve as the agent of the Shareholders for all purposes related to this Escrow Agreement, including without limitation service of process upon the Shareholders. By execution of this Escrow Agreement, the Shareholders' Agent accepts and agrees to use its best efforts to discharge the duties and responsibilities of the Shareholders' Agent set forth in this Escrow Agreement without compensation for its services hereunder. Parent and the Special Escrow Fund Agent shall be entitled to rely upon the authorization and designation of the Shareholders' Agent under this Section 9 and shall be fully protected in dealing with the Shareholders' Agent, and shall have no duty to inquire into the authority of any person reasonably believed by any of them to be the Shareholders' Agent. 10. NOTICES. Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed given when delivered in person, by overnight courier, by facsimile transmission (with receipt confirmed by telephone or by automatic transmission report) or five (5) business days after being sent by registered or certified mail (postage prepaid, return receipt requested), as follows: If to Parent: Wit SoundView Group, Inc. 826 Broadway, New York, New York 10003 Facsimile: 212 253-5289 Attention: Robert H. Lessin Chief Executive Officer 8 With copies to: Wit SoundView Group, Inc. 826 Broadway New York, New York 10003 Facsimile: 212 253-5289 Attention: Lloyd H. Feller Senior Vice President and Co-General Counsel and Skadden, Arps, Slate, Meagher & Flom, LLP Four Times Square, 30th Floor New York, New York 10036 Facsimile: (212) 735-2000 Attention: Richard T. Prins, Esq. and Skadden, Arps, Slate, Meagher & Flom, LLP 525 University Avenue, Suite 220 Palo Alto, CA 94301 Facsimile: (650) 470-4570 Attention: Kenton J. King, Esq. If to Shareholders' Agent: E*TRADE Group, Inc. 4500 Bohannon Drive Menlo Park, CA 94025 Facsimile: (650)331-6803 Attention: Thomas A. Bevilacqua Chief Strategic Investment Officer With copies to: Wilson Sonsini Goodrich & Rosati 650 Page Mill Road Palo Alto, CA 94304 Facsimile: (650) 461-5380 Attention: Alan K. Austin, Esq. 9 and Brobeck Phleger & Harrison Two Embarcadero Place 2200 Geng Road Palo Alto, CA 94303 Facsimile: (650) 496-2885 Attention: Curtis L. Mo, Esq. and Paul, Weiss, Rifkind, Wharton & Garrison 1285 Avenue of the Americas New York, NY 10019 Facsimile: (212) 757-3990 Attention: Douglas A. Cifu, Esq. If to Special Escrow Fund Agent: Chase Manhattan Bank Capital Markets Fiduciary Services 450 West 33rd Street, 10th Floor New York, NY 10001 Facsimile: (212) 946-3935 Attention: Debbie DeMarco Any party may by notice given in accordance with this section to the other parties designate another address or person for receipt of notices hereunder. 11. VOTING. Until the Termination Date, until directed otherwise by the Shareholders' Agent pursuant to Section 1, the Special Escrow Fund Agent will vote each of the Special Escrow Shares as directed in writing by the Shareholders' Agent. 12. GOVERNING LAW. This Escrow Agreement is governed by the laws of New York without regard to its conflict of law provisions, and shall inure to the benefit of and be binding upon the successors, assigns, heirs and personal representatives of the parties hereto. 13. COUNTERPARTS. This Escrow Agreement may be executed in two or more counterparts, all of which documents shall be considered one and the same document. 14. ADDITIONAL TERMS. (a) The Special Escrow Fund Agent shall have no more or less responsibility or liability on account of any action or omission of any book-entry depository, 10 securities intermediary or other subescrow agent employed by the Special Escrow Fund Agent than any such book-entry depository, securities intermediary or other subescrow agent has to the Special Escrow Fund Agent, except to the extent that such action or omission of any book-entry depository, securities intermediary or other subescrow agent was caused by the Special Escrow Fund Agent's own gross negligence, bad faith or willful misconduct. (b) Each of the parties hereby absolutely and irrevocably consents and submits to the jurisdiction of the courts in New York and of any Federal court located in New York in connection with any actions or proceedings brought against any of the parties (or each of them) by the Special Escrow Fund Agent arising out of or relating to this Escrow Agreement. In any such action or proceeding, the parties each hereby absolutely and irrevocably (i) waive any objection to jurisdiction or venue, (ii) waive personal service of any summons, complaint, declaration or other process, and (iii) agree that the service thereof may be made by certified or registered first-class mail directed to such party, as the case may be, at their respective addresses in accordance with Section 10 hereof. (c) The Special Escrow Fund Agent shall not be responsible for delays or failures in performance resulting from acts beyond its control. Such acts shall include but not be limited to acts of God, strikes, lockouts, riots, acts of war, epidemics, governmental regulations superimposed after the fact, fire, communication line failures, computer viruses, power failures, earthquakes or other disasters. (d) This Escrow Agreement shall be binding upon the respective parties hereto and their heirs, executors, successors and assigns. (e) This Escrow Agreement may not be altered or modified without the express written consent of the parties hereto. No course of conduct shall constitute a waiver of any of the terms and conditions of this Escrow Agreement, unless such waiver is specified in writing, and then only to the extent so specified. A waiver of any terms and conditions of this Escrow Agreement on one occasion shall not constitute a waiver of the other terms of this Escrow Agreement, or of such terms and conditions on any other occasion. (f) The parties agree that this Escrow Agreement and all documents relating thereto, including, without limitation, (i) consents, waivers and modifications which may hereafter be executed, and (ii) certificates and other information previously or hereafter furnished, may be reproduced by any photographic, photostatic, microfilm, optical disk, micro-card, miniature photographic or other similar process and shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. (g) In the event funds transfer instructions are given (other than in writing at the time of execution of this Escrow Agreement), whether in writing, by telecopier or otherwise, the Special Escrow Fund Agent is authorized to seek confirmation of such instructions by telephone call-back to the person or persons designated on ANNEX D, and the Special Escrow 11 Fund Agent may rely upon the confirmation of anyone purporting to be the person or persons so designated. The persons and telephone numbers for call-backs may be changed only in a writing actually received and acknowledged by the Special Escrow Fund Agent. The Special Escrow Fund Agent and the beneficiary's bank in any funds transfer may rely solely upon any account numbers or similar identifying numbers provided by Parent or the Shareholders' Agent to identify (i) the beneficiary, (ii) the beneficiary's bank, or (iii) an intermediary bank. The Special Escrow Fund Agent may apply any of the escrowed funds for any payment order it executes using any such identifying number, even where its use may result in a person other than the beneficiary being paid, or the transfer of funds to a bank other than the beneficiary's bank or an intermediary bank designated. The parties to this Escrow Agreement acknowledge that these security procedures are commercially reasonable. [Remainder of Page Intentionally Left Blank] 12 Counterpart Signature Page Special Escrow Agreement IN WITNESS WHEREOF, the parties have executed this Special Escrow Agreement on the date first above written. WIT SOUNDVIEW GROUP, INC. By: /s/ Mark F. Loehr --------------------------------------- Name: Mark F. Loehr Title: Co-President E*TRADE GROUP, INC. as Shareholders' Agent By: /s/ Theodore J. Theophilos --------------------------------------- Name: Theodore J. Theophilos Title: Chief Legal Affairs Officer and Corporate Secretary THE CHASE MANHATTAN BANK as Special Escrow Fund Agent By: /s/ Debbie DeMarco --------------------------------------- Authorized Signatory Name: Debbie DeMarco Title: Assistant Vice President 13 ANNEX A ------- SHAREHOLDER INFORMATION - -------------------------------------------------------------------------------- Name of Shareholder Address Taxpayer Identification Number of Special Number (if applicable) Escrow Shares - -------------------------------------------------------------------------------- GAP Coinvestment Partners II LP - -------------------------------------------------------------------------------- General Atlantic Partners 61 LP - -------------------------------------------------------------------------------- Softbank Technology Ventures Advisors Fund V L.P. - -------------------------------------------------------------------------------- Softbank Technology Ventures Entrepreneurs Fund V L.P. - -------------------------------------------------------------------------------- Softbank Technology Ventures V L.P. - -------------------------------------------------------------------------------- E*TRADE Group, Inc. - -------------------------------------------------------------------------------- -------------------------------------------------- Total Number of Special Escrow Shares -------------------------------------------------- 14 ANNEX B ------- SCHEDULE Name of Shareholder Number of Special Escrow Shares to be distributed monthly during Escrow Period - -------------------------------------------------------------------------------- GAP Coinvestment Partners II LP General Atlantic Partners 61 LP Softbank Technology Ventures Advisors Fund V L.P. Softbank Technology Ventures Entrepreneurs Fund V L.P. Softbank Technology Ventures V L.P. E*TRADE Group, Inc. 15 ANNEX C ------- FEES OF SPECIAL ESCROW FUND AGENT 15 basis points of the highest value of collateral held on deposit per annum or any part thereof without proration for partial years, subject to a minimum of $7,500.00 per annum or any part thereof without proration for partial years (includes investment in a Chase Manhattan Bank Money Market Account, Chase Manhattan Bank Deposit Acount or The Chase Manhattan Bank Mutual Fund known as the Vista Fund). $75 per investment (excludes Money Market, Deposit Account or Vista Fund Investments). 16 ANNEX D ------- TELEPHONE NUMBER(S) FOR CALL-BACKS AND PERSON(S) DESIGNATED TO CONFIRM FUNDS TRANSFER INSTRUCTIONS ----------------------------------------------------------- If to Parent: NAME TELEPHONE NUMBER ---- ---------------- 1. Curt Snyder (212) 253-5207 2. Jennifer Fleissner (212) 253-5285 3. Cynthia Alegre (212) 253-4602 If to Shareholders' Agent: NAME TELEPHONE NUMBER ---- ---------------- 1. _________________ _______________ 2. _________________ _______________ 3. _________________ _______________ Telephone call-backs shall be made to both Parent and Shareholders' Agent if joint instructions are required pursuant to this Escrow Agreement. 17 EX-10.9 8 0008.txt EXHIBIT 9 REGISTRATION RIGHTS AGREEMENT This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered into as of October 16, 2000, by and among Wit SoundView Group, Inc., a Delaware corporation (together with its permitted successors and assigns, "we" or the "Company"), and the persons whose signatures appear on the execution pages of this Agreement (the "Stockholders"). WHEREAS, the Company has agreed to use its commercially reasonable efforts to effect and maintain the registration under the Securities Act of 1933, as amended (the "Act") of certain shares of its common stock, par value $0.01 per share, which are set forth opposite the name of each Stockholder on Schedule A and are being issued pursuant to the Agreement and Plan of Merger, by and among the Company, Wit SoundView Corporation and E*OFFERING Corp., dated as of May 15, 2000, as amended on September 26, 2000 (the "Merger Agreement"), along with the associated rights to purchase shares of the Company's Series A Junior Participating Preferred Stock and any securities paid, issued or distributed in respect of such shares by way of stock dividends or distribution or stock split or in connection with a combination of shares, recapitalization, reorganization, merger or otherwise (collectively, the "Registrable Shares"), WHEREAS, certain of the Stockholders are parties to an agreement or agreements which in one or more ways restrict or restricts the rights of such Stockholders to sell or otherwise transfer the Registrable Shares for specified periods of time and until certain conditions are no longer applicable, and notwithstanding the rights granted to such Stockholders hereunder, such transfer restrictions are independent of the provisions of this Agreement, and WHEREAS, the Company has registered under the Act the resale of the Registrable Shares by the Stockholders on a Registration Statement on Form S-4 (No. 333- 42062), which was originally declared effective by the staff of the Securities and Exchange Commission (the "Staff") on August 8, 2000, as amended by a post-effective amendment dated October 6, 2000 (as may be amended from time to time, the "Current Registration Statement"). NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, intending to be bound hereby the parties agree as follows: 1. REGISTRATION. (a) With respect to the Registrable Shares, immediately after the Closing of the Merger, or as soon thereafter as reasonably practicable, the Company hereby agrees to use its reasonable best efforts to either (i) maintain the effectiveness of the Current Registration Statement, through post-effective amendments, if, and as necessary, on Form S-3 (or any successor form), for the sale by the Stockholders of Registrable Shares from time to time on a delayed or continuous basis pursuant to Rule 415 under the Act or (ii) prepare and file a new registration statement on Form S-3 (or any successor form) (a "New Registration Statement") with the Staff and to maintain the effectiveness of the New Registration Statement, through post-effective amendments, as necessary, for the sale by the Stockholders of Registrable Shares from time to time on a delayed or continuous basis pursuant to Rule 415 under the Act. As used herein, the term "Registration Statement" refers to either the Current Registration Statement or the New Registration Statement, as applicable. (b) With respect to each Stockholder, the Company further agrees to maintain the effectiveness of the Registration Statement until such time as the earlier of (i) all Registrable Shares have been sold by such Stockholder, (ii) the lapse, if applicable to such Stockholder, of selling restrictions provided by Rule 144(k) under the Act (or any successor provision) applicable to such Stockholder, (iii) or November 15, 2003. (c) The Company shall have no obligation to engage in underwriting to effect or facilitate the sale of any Registrable Shares and this Agreement shall not confer any piggyback or other rights on the holders of Registrable Shares, other than as expressly set forth herein. 2. DELAY PERIODS. Notwithstanding the provisions of Section 1 above, the Company shall have the right to suspend the filing, effectiveness or use of the Registration Statement for a reasonable length of time not to exceed 90 calendar days (a "Delay Period") from time to time if the Company determines in good faith that (A) it is in possession of material, non-public information concerning an acquisition, merger, recapitalization, consolidation, reorganization or other material transaction by or of the Company or concerning pending or threatened litigation and (B) disclosure of such information would jeopardize any such transaction or litigation or otherwise materially harm the Company, provided, that the Company may not exercise such deferral right pursuant to this Section 2 more than once in any twelve month period. The Company shall provide written notice at or prior to commencement of a Delay Period and promptly upon the end of any Delay Period to each holder of Registrable Shares covered by the Registration Statement and such holders shall cease all disposition efforts with respect to Registrable Shares held by them immediately upon the beginning of any Delay Period until notified of the end of such Delay Period. 2 3. HOLD-BACK AGREEMENT. Each holder of Registrable Shares agrees, if such holder is requested by an underwriter in an underwritten offering for the Company (whether for the account of the Company or otherwise), not to effect any public sale or distribution of any of the Company's equity securities pursuant to the Registration Statement, including (in the case of an offering for the account of the Company) a sale pursuant to Rule 144 (except as part of such underwritten registration), during the 3-day period prior to the offering date, and during the 30-day period beginning on the closing date of such underwritten offering. 4. NOTICES. All notices, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if delivered personally against written receipt or by facsimile transmission against facsimile confirmation or mailed (by registered or certified mail, postage prepaid, return receipt requested) or delivered by reputable overnight courier, fee prepaid, to the parties at the following addresses or facsimile numbers: (1) If to the Company, to: Wit SoundView Group, Inc. 826 Broadway New York, New York 10003 Facsimile No.: 212-253-5289 Attn.: General Counsel with a copy to: Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036-6522 Facsimile No.: 212-735-2000 Attn.: Richard T. Prins (2) If to any Stockholder, to: The last known address of such Stockholder on the books and records of the Company; 5. EXPENSES. The Company will pay all expenses to register the Registrable Shares and maintain the effectiveness of the Registration Statement for the period set forth in Section 2 hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, expenses of any audits incident to or required by any such registration and expenses of complying with the securities and "blue-sky" laws. Stockholders shall bear all other expenses in proportion 3 to the number of Registrable Shares held by such Stockholder and included in such registration, including underwriting expenses, the expense of any broker's commission or underwriter's discount or commission relating to registration and sale of such Stockholder's Registrable Shares. 6. GOVERNING LAW. This letter agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflict of laws principles thereof. 7. WAIVER OF JURY TRIAL. Each of the parties hereto hereby waives its respective rights to a jury trial of any claim or cause of action based upon or arising out of this agreement. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this agreement, including contract claims, tort claims, breach of duty claims, and all other common law and statutory claims. Each of the parties hereto further warrants and represents that it has reviewed this waiver with its legal counsel, and that it knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. This waiver is irrevocable, meaning that it may not be modified either orally or in writing, and this waiver shall apply to any subsequent amendments, renewals, supplements or modifications to this agreement. In the event of litigation, this agreement may be filed as a written consent to a trial by the court. 8. ASSIGNMENT. The rights granted pursuant to this Agreement may not be assigned or otherwise conveyed by any Stockholder or by any subsequent transferee of any of such rights without the written consent of the Company, which consent shall not unreasonably be withheld; provided, however, that no such written consent shall be required and such Registrable Shares will be Registrable Shares upon transfer to such transferee if (a) the transfer is to any affiliate or partner of any Stockholder or if such transferee acquires at least a majority of the capital stock of the Company owned by such Stockholder or (b) the transfer of the Registrable Shares to such transferee is expressly permitted by any agreement between the Company and any Stockholder (each, a "Permitted Transferee"); provided further, however, that any such purchaser or transferee shall, as a condition to the effectiveness of such transfer and/or assignment, be required to execute a counterpart to this Agreement agreeing to become a party to this Agreement and to be treated as a Stockholder hereunder, whereupon such purchaser or transferee shall have the benefits of, and shall be subject to the restrictions contained in this Agreement. The rights granted pursuant to this Agreement with respect to any Stockholder's Registrable Shares shall be deemed to be assigned subject to the provisions of this Section 9 (with respect to such Registrable Shares) to any Permitted Transferee of such Registrable Shares, unless the documentation executed by the Stockholder to effect the transfer of such Registrable Shares provides that rights under this Agreement are not being assigned to such transferee. The term "Stockholder" shall be deemed to include any party to whom a Stockholder's rights with respect to a particular Registrable Shares have been assigned in accordance with this Section 9. 4 9. INDEMNIFICATION. (a) In connection with any registration of any Registrable Shares under the Act pursuant to this Agreement, the Company shall indemnify and hold harmless the Stockholders, and the officers, directors and other persons that may be deemed to control any Stockholder within the meaning of the Securities Exchange Act of 1934 (the "Exchange Act") against any losses, claims, damages or liabilities, joint or several (or actions in respect thereof), to which the Stockholders and such persons may become subject under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the registration statement under which such Registrable Shares were registered under the Act, any preliminary prospectus or final prospectus contained therein or otherwise filed with the Securities and Exchange Commission (the "Commission"), any amendment or supplement thereto or any document incident to registration or qualification of any Registrable Shares, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or, with respect to any prospectus, necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or any violation by the Company of the Securities Act or state securities or "blue-sky" laws applicable to the Company and relating to action or inaction required of the Company in connection with such registration or qualification under state securities or "blue-sky" laws; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in said registration statement, preliminary prospectus, final prospectus, amendment, supplement or document incident to registration or qualification of any Registrable Shares in reliance upon and in strict conformity with written information furnished to the Company by any Stockholder with respect to information regarding such Stockholder expressly for inclusion therein. (b) In connection with any registration of Registrable Shares under the Act pursuant to this Agreement, any Stockholder participating in such registration shall, severally and not jointly, indemnify and hold harmless (in the same manner and to the same extent as set forth in Section 9(a)) the Company, each director of the Company, each officer of the Company who shall sign such registration statement, each underwriter, broker or other person acting on behalf of the Company and each person who controls any of the foregoing persons within the meaning of the Act with respect to any statement or omission from such registration statement, any preliminary prospectus or final prospectus contained therein or otherwise filed with the Commission, any amendment or supplement thereto or any document incident to registration or qualification of any Registrable Share, if such statement or omission was made in reliance upon and in strict conformity with written information furnished to the Company or such underwriter by such Stockholder expressly for inclusion in such registration statement, preliminary prospectus, final prospectus, amendment, supplement or document, provided that the liability of any Stockholder under this Section 9(b) shall not exceed the aggregate proceeds received by such Stockholder upon the sale of Registrable Shares by such Stockholder pursuant to such registration. 5 (c) Promptly after receipt by an indemnified party of notice of the commencement of any action involving a claim referred to in the preceding paragraphs of this Section 9, such indemnified party will, if a claim in respect thereof is made against an indemnifying party, give written notice to the latter of the commencement of such action. In case any such action is brought against an indemnified party, the indemnifying party will be entitled to participate in and to assume the defense thereof, jointly with any other indemnifying party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be responsible for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof; provided, however, that an indemnified party shall have the right to retain its own counsel, with the reasonable fees and expenses to be paid by the indemnifying party, if such indemnified party shall have reasonably concluded that representation of such indemnified party or parties by the counsel retained by the indemnifying party or parties would be inappropriate due to actual or potential differing interests between such indemnified party or parties and any other party represented by such counsel in such proceeding. (d) If the indemnification provided for in this Section 9 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, claim, damage, liability or action referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amounts paid or payable by such indemnified party as a result of such loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions which resulted in such loss, claim, damage, liability or action as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. 10. MODIFICATIONS; Amendments; Waivers. The terms and provisions of this Agreement may only be amended or waived either (a) with the written consent of the (i) Company and (ii) Stockholders holding a majority, by voting power, of the outstanding Registrable Shares then held by all Stockholders with respect to all terms and provisions of this Agreement. 11. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. 6 12. ENTIRE AGREEMENT. This Agreement supersedes all prior discussions and agreements between the parties with respect to the subject matter hereof and contains the sole and entire agreement among the parties hereto with respect to the subject matter hereof. 7 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written. WIT SOUNDVIEW GROUP, INC. By: /s/ Lloyd H. Feller --------------------------------------- Name: Lloyd H. Feller Title: Senior V.P. and Co-General Counsel E*TRADE GROUP, INC. By: /s/ Theodore J. Theophilos ----------------------------- Name: Theodore J. Theophilos Title: Chief Legal Affairs Officer and Corporate Secretary GAP COINVESTMENT PARTNERS II, L.P. By: /s/ Thomas J. Murphy ----------------------------- Name: Thomas J. Murphy Title: Attorney-In-Fact GENERAL ATLANTIC PARTNERS 61, L.P. By: General Atlantic Partners, LLC, Its general partner By: /s/ Thomas J. Murphy ----------------------------- Name: Thomas J. Murphy Title: Attorney-In-Fact SOFTBANK TECHNOLOGY VENTURES V L.P. By: ----------------------------- Name: Title: NEW ENTERPRISE ASSOCIATES 9 L.P. By: ----------------------------- Name: Title: CRUTTENDEN PARTNERS, LLC By: /s/ Walter Cruttenden ----------------------------- Name: Walter Cruttenden Title: Managing Member /s/ William Owen - ---------------------------------- Name: William Owen /s/ Walter Cruttenden - ---------------------------------- Name: Walter Cruttenden - ---------------------------------- Name: Sanford Robertson /s/ Frank W. Cutler - ---------------------------------- Name: Frank Cutler /s/ Christopher Cruttenden - ---------------------------------- Name: Christopher Cruttenden E*TRADE ECOMMERCE FUND, L.P. By: E*TRADE Ventures I, LLC, Its general partner By: /s/ Thomas Bevilacqua ----------------------------- Name: Thomas Bevilacqua Title: Member Schedule A REGISTRABLE SHARES STOCKHOLDER NO. OF REGISTRABLE SHARES E*TRADE Group, Inc. General Atlantic Partners 61, L.P. GAP Coinvestment Partners II, L.P. Softbank Technology Ventures V L.P. New Enterprise Associates 9 L.P. E*TRADE ecommerce Fund, L.P. Cruttenden Partners, LLC William Owen Walter Cruttenden Sanford Robertson Frank Cutler Christopher Cruttenden ------------ Total ============ EX-24.1 9 0009.txt EXHIBIT 10 EXHIBIT 10 to SCHEDULE 13D GENERAL ATLANTIC PARTNERS, LLC 3 Pickwick Plaza Greenwich, CT 06830 December 22, 1999 POWER OF ATTORNEY The undersigned, General Atlantic Partners, LLC, a Delaware limited partnership, with its principal office at 3 Pickwick Plaza, Greenwich, Connecticut, United States of America (the "Partnership"), by its Managing General Partner, Steven A. Denning, a U.S. citizen of full legal age, domiciled at 16 Khakum Drive, Greenwich CT 06831, hereby constitutes and appoints Thomas J. Murphy, a U.S. citizen, of full legal age, domiciled at 221 Old King's Highway North, Darien, CT 06820, its true and lawful attorney-in-fact and agent, in any and all capacities, to execute and deliver any and all documents and instruments and to make any governmental filings on behalf of the Partnership as fully to all intents and purposes as a General Partner might or could do in person, hereby ratifying and confirming all that said attorney-in-fact may lawfully do or cause to be done. This power of attorney shall expire on December 31, 2000. GENERAL ATLANTIC PARTNERS, LLC By /s/ Steven A. Denning ----------------------------- Steven A. Denning Managing Member STATE OF CONNECTICUT ) :ss. ###-##-#### COUNTY OF FAIRFIELD ) On the 22nd day of December, 1999, before me personally came Steven A. Denning, to me known, and known to me to be the individual described in, and who executed the foregoing document, and he acknowledged to me that he executed the same. /s/ Sheila Hughes - ----------------------------- NOTARY PUBLIC My commission expires August 31, 2001 EX-24.2 10 0010.txt EXHIBIT 10 EXHIBIT 10 to SCHEDULE 13D GAP COINVESTMENT PARTNERS II, L.P. 3 Pickwick Plaza Greenwich, CT 06830 December 22, 1999 POWER OF ATTORNEY The undersigned, GAP Coinvestment Partners II, L.P., a Delaware limited partnership, with its principal office at 3 Pickwick Plaza, Greenwich, Connecticut, United States of America (the "Partnership"), by its Managing General Partner, Steven A. Denning, a U.S. citizen of full legal age, domiciled at 16 Khakum Drive, Greenwich CT 06831, hereby constitutes and appoints Thomas J. Murphy, a U.S. citizen, of full legal age, domiciled at 221 Old King's Highway North, Darien, CT 06820, its true and lawful attorney-in-fact and agent, in any and all capacities, to execute and deliver any and all documents and instruments and to make any governmental filings on behalf of the Partnership as fully to all intents and purposes as a General Partner might or could do in person, hereby ratifying and confirming all that said attorney-in-fact may lawfully do or cause to be done. This power of attorney shall expire on December 31, 2000. GAP COINVESTMENT PARTNERS II, L.P. By /s/ Steven A. Denning ----------------------------- Steven A. Denning Managing Member STATE OF CONNECTICUT ) :ss. ###-##-#### COUNTY OF FAIRFIELD ) On the 22nd day of December, 1999, before me personally came Steven A. Denning, to me known, and known to me to be the individual described in, and who executed the foregoing document, and he acknowledged to me that he executed the same. /s/ Sheila Hughes - ----------------------------- NOTARY PUBLIC My commission expires August 31, 2001 -----END PRIVACY-ENHANCED MESSAGE-----