Development, Subcontract, and Operations Agreement

DEVELOPMENT, SUBCONTRACT, AND OPERATIONS AGREEMENT


This "Development, Subcontract, And Operations Agreement" ("Agreement") is effective as of May 17, 1999 ("Effective Date"), by and among OptiMark, Inc., a corporation organized and existing pursuant to the laws of Delaware, with principal offices at 10 Exchange Place Center, 24th Floor, Jersey City, New Jersey 07302 USA ("OptiMark"), and Japan OptiMark Systems, Inc., a corporation organized and existing pursuant to the laws of Japan, with principal offices at 9-5, Ohtemachi 1-chome, Chiyoda-ku, Tokyo 100-8066 Japan ("JOS").


SECTION 1 -- DEFINITIONS


1.1 "Joint Venture Agreement" means that certain Joint Venture Agreement,
effective as of September 29, 1998, by and among OptiMark, JOS, Nihon
Keizai Shimbun, Inc. and QUICK Corp. (and all amendments thereto).


1.2 "Technology License Agreement" means that certain Technology License
Agreement, effective as of March 3, 1999 (and all amendments thereto),
by and among OptiMark Technologies, Inc. (now OptiMark U.S. Equities,
Inc., an affiliate of OptiMark) and JOS, which has been assigned from
OptiMark U.S. Equities, Inc. to OptiMark. The following terms shall
have the same meaning as set forth in the Technology License Agreement:
"Intellectual Property Rights," "Japanese Equity Securities," "OptiMark
Technology," and "OSE Securities."


1.3 "Affiliates" of any specified Person shall mean any other Person that
directly or indirectly controls, is controlled by, or is under common
control with such specified Person.


1.4 "Agreement" shall have the meaning set forth in the first paragraph
hereof.


1.5 "Business Day" shall mean for all purposes any day, excluding Saturday,
Sunday and any day on which the Osaka Securities Exchange ("OSE") is
closed.


1.6 "Critical Milestone Dates" shall have the meaning provided in Section
3.3.


1.7 "Day" means a calendar day.


1.8 "Development Phase" shall have the meaning provided in Section 4.1.


1.9 "Force Majeure" shall mean such events including but not limited to
Acts of God, strikes, lockouts, riots, acts of war, epidemics, fire,
communication line failure, power failures, earthquakes or other
disasters, if such is found to be beyond the control of the Party;
provided, however, that an event of Force Majeure shall not include an
action or inaction of Japan's Ministry of Finance ("MOF") (or other
governmental body having jurisdiction over any member of OSE).


1.10 "Installation and Acceptance Phase" shall have the meaning provided in
Section 5.1.


1.11 "Installation Schedule" shall have the meaning provided in Section 5.1.


1.12 "JOS Data Center" shall have the meaning provided in Section 9.1(a).


1.13 "New System" shall have the meaning provided in Section 2.1. 2 1.14 "Milestone Dates" shall have the meaning provided in Section 3.3.


1.15 "Operational Phase" shall have the meaning provided in Section 6.1.


1.16 "Operational Commencement Date" shall have the meaning provided in
Section 6.1.


1.17 "Party" means OptiMark or JOS. "Parties" means OptiMark and JOS,
collectively.


1.18 "Person" shall mean a natural person, corporation, partnership, limited
liability company, association or other governmental or
non-governmental entity.


1.19 "Phase" shall mean each of the Specification Phase, Development Phase,
Installation and Acceptance Phase and Operational Phase.


1.20 "Profiles" shall mean the expression of trading interest in the form of
a satisfaction profile that shows a user's degree of satisfaction
(expressed as a number between zero and one, inclusive) to trade at
each coordinate of a grid showing price and size.


1.21 "Specifications" shall have the meaning provided in Section 3.1.


1.22 "Specifications Phase" shall have the meaning provided in Section 3.1.


1.23 "User" shall mean a person submitting a Profile to the New System.


1.24 "Source Code" means computer programming code, routines and programs in
human readable form.


1.25 "Object Code" means computer programming code, routines and programs in
machine readable and executable form, which has been compiled and
linked from the Source Code.


1.26 "Certificate of Acceptance" shall have the meaning set forth in Section
5.4(c).


1.27 "Deliverable" shall have the meaning set forth in Section 3.3.


1.28 "Effective Date" shall mean the date first written above.


1.29 "Final Acceptance Test" shall have the meaning set forth in Section
5.4.


1.30 "Maintenance Services" and "Technical Support Services" shall have the
meanings set forth in SCHEDULE C hereto. OptiMark and JOS are currently
negotiating in good faith the terms and conditions for such Maintenance
Services and Technical Support Services. The Parties shall indicate
their acceptance of such terms and conditions by executing the first
page of SCHEDULE C no later than September 30, 2000, upon which
execution such terms and conditions shall be deemed accepted and
incorporated into this Agreement. Either Party may terminate this
Agreement if the Parties do not execute SCHEDULE C on or before
September 30, 2000.


1.31 "Third Party Software" shall mean software and documentation that has
been, or will be, licensed from a Third Party for use in the New
System.


1.32 "OptiMark Software" shall have the meaning set forth in Section 2.3.
OptiMark Software shall not include Third Party Software. 3 1.33 "Project Manager" shall have the meanings set forth in Section 7.1.


1.34 "Fatal Error" shall mean the failure of the OptiMark Software to
conform to the Final Specifications such that (a) a critical function
of the New System is inoperable and no immediate circumvention is
possible or (b) the nonconformance is likely to cause JOS to suffer
substantial financial damage.


1.35 "Final Specification" shall have the meaning set forth in Section 3.2.


1.36 "Third Party" shall mean any Person who is not a Party.


SECTION 2 -- OVERVIEW AND PROJECT SCOPE


2.1 THE NEW SYSTEM. Pursuant to the Joint Venture Agreement and the
Technology License Agreement, OptiMark and JOS enter into this
Agreement to develop and operate a computer system based on the
OptiMark Technology for trading Japanese Equity Securities within the
territory of Japan. In this Agreement, the Joint Venture Agreement, and
the Technology License Agreement, this computer system is referred to
as the "New System."


2.2 PURPOSE OF THE AGREEMENT. The Parties shall work as set forth in this
Agreement to develop and operate the New System. This Agreement
contains a framework for the allocation of responsibilities and
schedules for such development and operation.


2.3 OPTIMARK'S GENERAL RESPONSIBILITIES. As described herein or in the
Specifications attached hereto as SCHEDULE A (which comprises SCHEDULES
A-1 and A-2 as described below), OptiMark shall develop under
subcontract from JOS, and provide JOS, with a software implementation
of the OptiMark Trading System ("OptiMark Software") for JOS' use
pursuant to the Technology License Agreement. OptiMark shall make the
Source Code for the OptiMark Software available to JOS as stated in the
Technology License Agreement (as amended). The OptiMark Software
includes such software which OptiMark develops on behalf of JOS under
subcontract to OptiMark by JOS based on Sections 2.1(a) and 2.4(a)(i)
of the Technology License Agreement to localize and customize the
OptiMark Trading System for JOS' use pursuant to the Technology License
Agreement. In addition, as specified herein or in the Specifications,
OptiMark shall (a) train JOS personnel; (b) maintain the OptiMark
Software; (c) provide technical support for the OptiMark Software to
JOS; (d) assist JOS and Third Parties, where appropriate, in
implementing the Third Party Software and (e) perform such other tasks
as assigned to it in the Specifications or as agreed to by the Parties
in writing. OptiMark shall provide the foregoing for the monetary
amounts described herein.


2.4 JOS' GENERAL RESPONSIBILITIES. As described in the Specifications, JOS
shall develop the market data interface, localize and customize the
OptiMark Trading System, whether by itself or obtaining the assistance
of OptiMark and/or Third Parties as permitted under the Technology
License Agreement, and communicate with OSE and Users with regard to
the operation of the New System. In addition, as specified herein, JOS
shall (a) configure and operate the JOS Data Center; (b) be solely
responsible for operating the New System on a daily basis; (c)
interface with the OSE and the MOF for market control and regulatory
supervision; (d) perform sales, marketing, and customer relations
functions in connection with the operation of the New System; and (e)
perform such other tasks as assigned to it in the Specifications or as
agreed to by the Parties in writing. 4 2.5 FOUR PHASES. The Parties shall develop and operate the New System in
the following four phases, which may overlap and interact: (i) the
Specifications Phase; (ii) the Development Phase, (iii) the
Installation and Acceptance Phase; and (iv) the Operational Phase. 5
SECTION 3 -- SPECIFICATIONS PHASE


3.1 SPECIFICATIONS. During the Specifications Phase, the Parties shall
develop complete and detailed functional and operational specifications
("Specifications") for the New System. The Specifications are attached
hereto as SCHEDULE A, which comprises SCHEDULES A-1 and A-2.The
Specifications shall allocate the responsibilities of each Party,
including those generally set forth in Sections 2.3 and 2.4, and shall
incorporate requirements and time schedules stated in this Agreement.


3.2 ACCEPTANCE OF SPECIFICATIONS. The Specifications that the Parties have
agreed to and accepted as of the Effective Date are attached hereto as
SCHEDULE A-1. The Parties shall indicate their acceptance of the
additional Specifications by executing the first page of SCHEDULE A-2,
at which time the Specifications of SCHEDULES A-1 and A-2 shall be
deemed "Final Specifications." If a Party desires to modify the Final
Specifications, the Parties shall follow the procedures in Section 3.4
below.


3.3 MILESTONE DATES. SCHEDULE B sets forth dates ("Milestone Dates") by
which the Parties shall (a) complete tasks for which they are
responsible hereunder and (b) deliver software and/or other materials
("Deliverables") to one another. Certain of the Milestone Dates may be
designated as "Critical Milestone Dates," which indicates that they are
critical for successful and timely development and launch of the New
System. Anything herein to the contrary notwithstanding, the Milestone
Dates may only be altered by written agreement executed by officers of
the Parties. The Parties agree that if necessary regulatory approvals
are not obtained by the indicated Critical Milestone Date, then the
Parties will modify effected Milestone Dates scheduled thereafter.


3.4 MODIFICATIONS.


(a) Prior to the Operational Commencement Date, a Party may
request modifications to the Final Specifications. Such a
request shall be presented in detail to the other Party in
writing. The request shall indicate, at a minimum, whether the
proposed modifications, in the reasonable and good faith
judgment of the requesting Party, would result in an extension
of, or change to, the Installation Schedule, the Milestone
Dates, or the cost of development or operation of the New
System.


(b) If a request for proposed modification to the Final
Specifications under Section 3.4(a) is submitted by JOS, and
OptiMark determines that the request seeks to remedy a Fatal
Error in the OptiMark Software, then OptiMark shall accept the
request and provide JOS with notice of such acceptance within
seven (7) Business Days after receipt by OptiMark of the
request. If JOS does not receive notice accepting or rejecting
the request within the seven (7) Business Days, then the
request shall be deemed accepted by OptiMark. In the case that
the request is accepted, and upon receipt of detailed
specifications from JOS, OptiMark will make commercially
reasonable good faith efforts to provide the requested
modification of the OptiMark Software to JOS within a
reasonable time. 6
(c) If a request for proposed modification to the Final
Specifications is submitted by JOS under Section 3.4(a), and
OptiMark determines that the request seeks to implement a
change required as a direct result of OSE and/or MOF imposing
new regulatory requirements, then OptiMark shall accept the
request and provide JOS with notice of such acceptance within
seven (7) Business Days after receipt by OptiMark of the
request. If JOS does not receive notice accepting or rejecting
the request within the seven (7) Business Days, then the
request shall be deemed accepted by OptiMark. In the case that
the request is accepted, and upon receipt of detailed
specifications from JOS, OptiMark will make commercially
reasonable good faith efforts to provide the requested
modification to JOS prior to any deadlines imposed by OSE or
MOF.


(d) Within seven (7) Business Days after receipt by OptiMark of a
request not covered under Sections 3.4(b) or 3.4(c), OptiMark
shall inform JOS, by written notice, whether it accepts the
request for proposed modifications. If the request is not
accepted, the Parties shall confer in good faith to determine
if and how the proposed modifications may be incorporated into
the New System at a later date. If the Parties determine that
the proposed modifications may be incorporated into the New
System at a later date, and upon receipt of detailed
specifications from JOS, OptiMark will make commercially
reasonable good faith efforts to provide the proposed
modifications to JOS within a time period to be agreed upon by
the Parties.


(e) If a request is accepted, the modifications shall be deemed
effective, and the Agreement, Final Specifications, Milestone
Dates, and effected Schedules will be deemed appropriately
modified to reflect the modifications, as of the date that the
requesting Party receives the notice of acceptance.


(f) After the Operational Commencement Date, modifications to the
functionality of the New System shall be handled by
Maintenance Services and/or Technical Support Services
pursuant to SCHEDULE C hereto.


3.5 EXTENSION OF MILESTONE DATES.


(a) Each Party shall use commercially reasonable good faith
efforts to meet Milestone Dates for which it is responsible.


(b) The Parties acknowledge that they may agree, from time to
time, to modify Schedules and certain Milestone Dates,
including Critical Milestone Dates.


(c) In the event that a Party anticipates at any time that it will
not reach one or more Milestone Dates, it shall immediately so
inform the other Party by written notice including the
reason(s) why it will not reach one or more Milestone Dates,
submit proposed revisions to the Milestone Dates that reflect
the Party's best estimates of what can realistically be
achieved by the original Milestone Date, and continue to work
under the original Milestone Date until such proposed
revisions may be accepted by the other Party.


(d) Each Party shall be excused from delays in performing under
this Agreement, and the Schedules and Milestone Dates
(including the Critical Milestone Dates) shall be
appropriately extended Day-to-Day, to the extent that such
delays result from an event of Force Majeure. 7
SECTION 4 -- DEVELOPMENT PHASE


4.1 DEVELOPMENT/SUBCONTRACT TASKS. During the Development Phase, the
Parties shall develop the New System in accordance with the
Specifications. During the Development Phase, the Parties shall take
the following actions:


(a) Under subcontract from JOS, OptiMark shall develop and
internally test Deliverables as described in the
Specifications, including the OptiMark Software. OptiMark
shall also perform such other tasks as may be described in
this Agreement, assigned or subcontracted to it in the
Specifications, or as agreed to by the Parties in writing.
OptiMark's expenses for development hereunder shall be paid by
JOS as set forth in Section 12 herein.


(b) JOS shall develop and internally test, at its own expense,
Deliverables for which it is responsible for developing
hereunder (excluding those subcontracted to OptiMark which
shall be included in the Deliverables referred to in Section
4.1(a) above), as described in the Specifications. JOS shall
also perform, at its own expense, such other tasks as may be
described in this Agreement, assigned to it in the
Specifications, or as agreed to by the Parties in writing.


SECTION 5 -- INSTALLATION AND ACCEPTANCE PHASE


5.1 INSTALLATION SCHEDULE. During the Installation and Acceptance Phase,
the Parties shall deliver, install, and test the New System. The
Parties shall install the New System according to the schedule
("Installation Schedule") in the Specifications. The Installation
Schedule shall reflect the timing for the installation and connection
of various components of the New System. The Parties shall use
commercially reasonable good faith efforts to minimize deviations from
the Installation Schedule.


5.2 DELIVERY. A Party shall deliver each Deliverable for which it is
responsible in the manner and on the applicable Milestone Date set
forth in SCHEDULE B. Deliverables of OptiMark comprising software shall
be provided in Object Code form; provided, however, that OptiMark may
deliver a Deliverable in Source Code form if it deems it appropriate.
As set forth in Section 17, OptiMark shall deposit Source Code for
certain software Deliverables into escrow. Deliverables of JOS
comprising software shall be provided in Object Code and Source Code
forms.


5.3 TESTING PRIOR TO DELIVERY OF A DELIVERABLE. A Party shall perform its
own interim integration, stress, and other acceptance tests for
Deliverables for which it is responsible for delivering hereunder to
ensure operability and compliance with the Final Specifications. Such
tests for a Deliverable shall be completed prior to the delivery
thereof.


5.4 FINAL ACCEPTANCE TESTS. Upon completion of the delivery of the required
Deliverables, JOS shall subject the New System as an integrated whole
to Final Acceptance Tests, as described in the Specifications. The
Final Acceptance Tests shall include, but not be limited to, testing of
the interface between OSE and the New System and of the interface
between TradeNet and Market Data, as stated in the Specifications. JOS
shall coordinate all such testing with OSE and QUICK Corp., as
necessary, to test these interfaces. OptiMark shall be permitted to
participate in and oversee all Final Acceptance Tests.


(a) The Final Acceptance Tests shall commence on the Milestone
Date specified in SCHEDULE B and continue Day-to-Day
thereafter until completed.


(b) If any portion of the New System fails an applicable Final
Acceptance Test ("Defective Portion"), then the Party
responsible for developing the Defective Portion shall use
commercially reasonable 8
good faith efforts to remedy the failure and then re-submit
the Defective Portion for additional Final Acceptance Tests
pursuant to this Section 5.4. JOS shall pay OptiMark fees and
expenses in accordance with Section 12.2(a) for remedying
errors under this Section 5.4(b); provided that JOS not be
obligated to pay such fees and expenses if the Defective
Portion was known by OptiMark to be directly caused by
intentional or willful misconduct on the part of OptiMark's
employees. JOS shall bear the burden of proof with regard to
the foregoing.


(c) After the New System has passed the Final Acceptance Tests,
JOS' Project Manager shall promptly execute and deliver to
OptiMark's Project Manager a certificate indicating JOS'
acceptance of the New System ("Certificate of Acceptance").


5.5 NOTIFICATION OF DELAY OR FAILURE. In order to anticipate and reduce the
effect of delays or failures, the Parties agree to notify each other as
soon as there is any reason to believe that any delivery will be
delayed and/or that the New System will fail any required test.


SECTION 6 -- OPERATIONAL PHASE


6.1 COMMENCEMENT.


(a) The Operational Phase shall commence on the date ("Operational
Commencement Date" also referred to the "Live" date in
Schedule B) on which (i) all regulatory approvals have been
obtained and (ii) JOS shall have delivered to OptiMark an
executed Certificate of Acceptance. On the Operational
Commencement Date, Users shall have access to, and may
commence trading of OSE Securities through, the New System.


(b) During the Operational Phase, JOS shall, at its own expense,


(i) operate the New System on a daily basis;


(ii) maintain the portions of the New System that were
developed by JOS itself or obtained through the
assistance of Third Parties so that those portions
continue to meet the Specifications and all other
provisions of this Agreement; and


(iii) inform OptiMark of any known errors in the OptiMark
Software.


(c) During the Operational Phase, OptiMark shall provide
Maintenance Services and Technical Support Services to JOS as
set forth in SCHEDULE C. JOS shall pay fees for such services
to OptiMark as set forth in SCHEDULE C.


6.2 VIRUSES, TIME BOMBS, TRAP DOORS. Each Party shall promptly notify the
other Party of any defects in relevant security mechanisms of which it
has actual knowledge, such as time bombs, viruses, trap doors, or
similar programs or devices. The Parties shall use commercially
reasonable good faith efforts to disable and/or correct the same. 9
SECTION 7 -- PROJECT MANAGERS


7.1 PROJECT MANAGERS. No later than five (5) Business Days after the
Effective Date, each Party shall appoint a project manager ("Project
Manager") that will be the primary contacts between the Parties hereto.
Unless otherwise stated herein, the Project Manager for a Party shall
have the authority to bind the Party.


7.2 MEETINGS. The Project Managers shall meet, either in person, by
conference call, or otherwise, at least weekly for the term of this
Agreement to discuss the development and operation of, and other issues
relating to, the New System. JOS' and OptiMark's Project Managers shall
jointly prepare an agenda prior to each meeting and shall record the
minutes and action items for each meeting. The Project Managers may
also meet more frequently on an ad hoc basis if they deem it necessary.


7.3 PROGRESS REPORT. After each meeting, OptiMark's Project Manager shall
prepare a report specifying in detail:


(a) any critical problems encountered, discovered, or continuing
since the previous meeting, including, without limitation, the
failure of either Party in performing, any delay of either
Party in performing, or the inadequate performance of either
Party which may prevent completion of any task by the
Milestone Dates set forth in SCHEDULE B;


(b) the estimated length of any project delay which may result
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