Subscription Agreement

MASTER SUBSCRIPTION AGREEMENT



This Agreement is entered into by and between BETA Systems Inc. ("BETA Systems"), 350 North Sunny Slope Road, Brookfield, WI 53005 and E*Trade Securities, Inc., 2400 Geng Road, Palo Alto, CA 94303 this 27 date of June,



WHEREAS, Subscriber desires to subscribe to a data processing service called BETAHOST/(R)/ offered by BETA Systems, and to have BETAHOST service installed at certain offices of Subscriber;



NOW, THEREFORE, in consideration of the mutual promises and covenants exchanged herein, BETA Systems and Subscriber agree as follows:



1. Purpose of Agreement. The purpose of this Agreement is to set forth

-------------------- the terms and conditions governing the mutual rights, duties and obligations of the parties hereto.



2. Services Provided.

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(a) BETA Systems will provide Subscriber with the BETAHOST services which are set forth, together with their charges, on Schedule A attached hereto and incorporated herein by reference.



(b) BETAHOST service provided hereunder shall be av ailable on each day that the New York Stock Exchange is open for trading. On such days BETA Systems shall make diligent efforts to provide all BETAHOST service hereunder from [*]:00 A.M. to [*]:00 P.M., C.T., and limited inquiry functions from [*]:15 P.M. to [*]:30 P.M., C.T. BETA Systems shall also make reasonable efforts to provide limited inquiry functions on Saturdays and Sundays from [*]:00 A.M. to [*]:00 P.M., C.T., except that BETA Systems reserves the right, upon not less than 48 hours notice, to l imit or curtail holiday or weekend availability when necessary for system upgrades, adjustments, maintenance, or other operational considerations.



(c) General enhancements to existing BETAHOST service provided hereunder shall be made available t o Subscriber at no additional cost, but any new features or services that may be developed by BETA Systems during the term of this Agreement may, at BETA Systems' option, and subject to Subscribers' acceptance, be made available to Subscriber at BETA Syst ems' then-current prices for such new features or services, and upon such other terms as BETA Systems may reasonably deem appropriate. Enhancements to existing BETAHOST - ----------------

/(R)/ BETAHOST is a registered servicemark of Beta Systems Inc. All rights





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services requested by Subscriber and which benefit less than a majority of BETA Systems' Subscribers at the time such enhancements are put into service may, at BETA Systems option, be billed to such ben efiting Subscribers at BETA Systems standard rates for programming. All enhancements to the BETAHOST service, and any new features or services introduced by BETA Systems, shall remain the exclusive proprietary property of BETA Systems. Prior to Subscriber ' s conversion, BETA Systems will, at no charge, develop and incorporate into the services to be provided to Subscriber the functionalities and features identified on Schedule B attached hereto, in accordance with the terms and conditions set forth thereon.



3. Initial Conversion and Training.

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(a) In connection with Subscriber's initial conversion to the use of BETAHOST under this Agreement, BETA Systems shall provide such on-site training and oth er assistance as BETA Systems and Subscriber jointly deem necessary to assure that Subscriber's personnel are able to make effective use of BETAHOST. On-site training shall take place at such times and places as are mutually agreeable to the parties heret o.



(b) BETA Systems will convert Subscriber's files as necessary to make the same compatible with the services provided to Subscriber hereunder. BETA Systems shall provide Subscriber with such support as BETA Systems and Subscriber jointly deem necessary to effectuate the conversion, and Subscriber will cooperate with BETA Systems in the conversion. BETAHOST service hereunder shall not commence until BETA Systems and Subscriber jointly determine that the conversion and training are sufficiently completed to permit the service to be operational.



(c) All ordinary and necessary out-of-pocket expenses incurred by BETA Systems in connection with the conversion will be borne by BETA Systems. Extraordinary out-of-pocket expenses incurred with Subscriber's prior approval by BETA Systems as a result of Subscriber's requests for support will be paid by Subscriber.



4. Equipment and Hardware. (a) Subscriber shall be responsible for

---------------------- obtaining, installing a t its premises, and maintaining all equipment and hardware, including telecommunications equipment, necessary for using BETAHOST. BETA Systems will assist Subscriber in developing an acceptable equipment list, and Subscriber shall,





[*] CONFIDENTIAL TREATMENT REQUESTED







prior to installation, submit its equipment configuration to BETA Systems for approval, which shall not be unreasonably withheld.



(b) Prior to conversion, Subscriber must exercise reasonable efforts to develop and implement a communications "firewall" between all of Subscriber's in-house networks and BETA Systems' network that is, to the extent reasonably possible, capable of preventing all unauthorized access to BETA Systems' network. Subscriber is liable to BETA Systems for all loss or damage caused by any unauthorized access to BETA Systems' network through Subscriber's network as a result of Subscriber's failure to act as required by this subparagraph. BETA Systems may audit all firewall arrangements from time-to-time upon reasonable notice to Subscriber, but no such audit, nor BETA Systems' failure to audit, relieves Subscriber of its responsibilities or liabilities under this paragraph.



5. Subscriber Data.

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(a) Subscriber will timely supply BETA Systems, in a form acceptable to BETA Systems, with all data necessary for BETA Systems to convert Subscriber's data and perform the ongoing services to be provided hereunder. It is the sole responsibility of Subscriber to insure the completeness and accuracy of such data.



(b) BETA Systems acknowledges that all records, data, files and other input material relating to Subscriber are confidential and shall take such steps (i) to protect the confid entiality of such records, data, files and other materials and (ii) to limit access to Subscriber's files and records to Subscriber and other authorized parties, as it takes to protect its own similar confidential information.



(c) BETA Systems will take such steps to protect against the loss or alteration of Subscriber's files, records and data retained by BETA Systems as it takes to protect against the loss or alteration of its own similar data. BETA Systems will maintain backup files(s) conta i ning all of the data, files and records related to Subscriber. Subscriber's file(s), records and data shall be released to Subscriber upon termination of this Agreement or in the event of an occurrence that renders BETA Systems unable to perform hereunder . Provided Subscriber is current on all invoices, BETA Systems will cooperate reasonably in Subscriber's transition to another service provider, and Subscriber will pay such reasonable charges as BETA deconversion charges as set forth in Schedule A.





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(d) BETA Systems acknowledges that all records, data, files and other input material relating to Subscriber are the exclusive property of the Subscriber.



6. Charges and Payments.

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(a) General. In addition to reimbursements required elsewhere in

------- this Agreement, Subscriber shall pay for BETAHOST service in accordance with Schedule A attached hereto and as may be adjusted as provided h erein. The charges for any partial month of service shall be prorated on the basis of a 30-day month.



(b) Billing. BETA Systems shall invoice Subscriber monthly for all

------- applicable charges. If payment is not received by BETA Systems within forty-five (45) days of Subscriber's receipt of the invoice, Subscriber agrees to pay BETA Systems interest on the unpaid balance at the rate of 18% per annum from the date that is thirty (30) days after the date of the invoice unti l the invoice is paid in full. If payment in full is not received within sixty (60) days of the date of the invoice, BETA Systems may, at its option, terminate this Agreement upon thirty (30) days written notice. If Subscriber disputes in good faith any it em(s) on an invoice, it may withhold payment on such item(s) until the dispute is resolved, but it shall promptly pay all undisputed items as provided in this paragraph.



(c) Taxes, Utilities and Exclusions. All charges shall be exclusive

------------------------------- of any federal, state or local sales, use, excise, ad valorem or personal

-- ------- property taxes levied, or any fines, forfeitures or penalties assessed in co nnection therewith, as a result of this Agreement or the installation or use of BETAHOST hereunder. Any such taxes which may be applicable will be paid by Subscriber or by BETA Systems for Subscriber's account, in which case Subscriber shall reimburse BET A Systems for amounts so paid. All electrical utility service necessary to operate BETAHOST at Subscriber's offices shall be maintained in Subscriber's own account with such utility or service, and all charges for such services, including installation char g es in connection therewith, shall be paid by Subscriber. BETA Systems shall arrange for the installation of all telecommunications services necessary for Subscriber's use of BETAHOST, which will be maintained in BETA Systems' account for Subscriber's excl u sive use. Subscriber shall promptly remit payment to BETA Systems, at BETA Systems' standard rates as listed in Schedule A Network Fees, for all charges in connection with such installation and Subscriber's use thereof. BETA SYSTEMS SHALL NOT BE LIABLE TO SUBSCRIBER FOR ANY FAILURE, FAULT, DELAY,





[*] CONFIDENTIAL TREATMENT REQUESTED









INTERRUPTION OR LOSS OF TELECOMMUNICATIONS SERVICES RESULTING FROM EVENTS O R CONDITIONS OUTSIDE OF BETA SYSTEMS' REASONABLE CONTROL. BETA Systems will work diligently to remedy any failure, fault, delay, interruption or loss of telecommunications services resulting from conditions reasonably within its control.



7. Term of Agreement.

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(a) This Agreement will be effective on the date first above written and will terminate on the seventh anniversary of the date Subscriber first uses BETAHost to process trades ("the Conver sion Date"). BETA Systems or Subscriber shall give the other party six (6) months written notice of its intent not to renew this Agreement upon its expiration. If such notice is given less than six (6) months prior to the expiration date, then this Agre ement shall remain in effect for six (6) months from the giving of such notice.



(b) Unless BETA Systems or Subscriber shall have given notice of non-renewal as provided in Paragraph 7(a), in the event that no renewal, continuation or succes sor agreement is signed by the parties prior to the expiration of this Agreement, this Agreement may be extended automatically for successive periods of thirty (30) days until a successor, renewal or continuation agreement is signed by the parties or unti l Subscriber, upon thirty (30) days written notice to BETA Systems, or BETA Systems, upon six (6) months written notice to Subscriber, elects to terminate this Agreement. During any period of extension described in this subparagraph 7(b), the charge for t he services provided to Subscriber hereunder may, at BETA Systems' option, be 120% of the current contract rates paid by Subscriber.



8. Termination.

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(a) Subscriber acknowledges that BETA Systems incur s substantial initial costs in converting and training new subscribers. Subscriber therefore agrees that if Subscriber cancels this Agreement prior to the Conversion Date, Subscriber will pay to BETA Systems the sum of $[*] expenses incurred by BETA Syste ms in connection with Subscriber's conversion since [*] in a single payment due immediately upon Subscriber's receipt of BETA Systems' invoice.





[*] CONFIDENTIAL TREATMENT REQUESTED







(b) Should Subscriber cancel this Agreement prior to its t ermination pursuant to paragraph 7(a), except as otherwise authorized in this Agreement, Subscriber shall pay to BETA Systems a cancellation charge in accordance with the following schedule:



Cancellation Date Charge

----------------- ------



within the first year after the Conversion Date $[*]



on or after the first but before the second $[*]

anniversary of the Conversion Date



on or after the second but before the third $[*]

anniversary of the Conversion Date



on or after the third but before the fourth $[*]

anniversary of the Conversion Date



on or after the fourth but before the fifth $[*]

anniversary of the Conversion Date



on or after the fifth but before the sixth $[*]

anniversary of the Conversion Date



on or after the sixth anniversary of the Conversion $[*]



(c) In ad dition to termination rights as provided elsewhere herein, either party may terminate this Agreement in the event that the other party commits a material breach of this Agreement, provided the breaching party fails to cure such material breach within sixt y (60) days of its receipt of written notification thereof from the other party. For purposes of this subparagraph, a "material breach" is a failure by one party to perform its obligations under this Agreement that so seriously and adversely affects the o t her party's ability to carry on its business that a reasonable person would conclude that the essential purpose of the Agreement had failed. If a termination of this Agreement pursuant to this subparagraph is later determined through arbitration to have b een improper, then (i) if Subscriber improperly terminated the Agreement, it will pay to BETA Systems as liquidated damages and not as a penalty a sum equal to [*]% of the applicable cancellation payment set forth in subparagraph (b); (ii) if BETA Systems improperly terminated the Agreement, it will pay to Subscriber the sum of $[*] as liquidated damages and not as a penalty, except that if Subscriber elects, and BETA Systems agrees, to reinstate the services hereunder as if no termination had occurred, th e liquidated damage payment will be $[*]. All liquidated damages payments are in lieu of all other damages except unpaid fees and charges incurred for service





[*] CONFIDENTIAL TREATMENT REQUESTED







provided under this Agreement, fees and costs provided under paragraph 10, and damages resulting from a breach of paragraph 11.



(d) BETA Systems will provide the following service levels:



1. [*]% system and communication line up time from [*]:00 a.m. to [*]:00 p.m. C.T. on each day the New York Stock Exchange is open for trading.



2. [*]% system and communication line up time from [*]:15 p.m. to [*] :30 p.m. Monday through Friday, [*]:00 to [*]:00 Saturday and Sunday and other times that limited inquiry functionality is available to Subscriber. Scheduled downtime of which Subscriber has received at least 48 hours advance notice is considered system u ptime, as long such scheduled downtime does not become excessive. Any scheduled downtime of which Subscriber has not received at least 48 hours advance notice is considered downtime.



3. BETA Systems will have adequate capacity installed at all times to provide reasonable response times and batch processing.



4. Positions & Balances for each trade day will be available no later than [*]:00 a.m. C.T. the following day.



5. Confirms print file will be available by [*] C.T. on each trade day.



6. Customer Statements file should be sent to Subscriber's Statement vendor within [*] hours of BETA Systems' receipt of correct and processable external interface files from Subscriber's other vendors.



7. Requests from Subscriber to add securities to Security Master will be completed within [*] hours of request.



(e) If BETA Systems' performance falls below the above service levels for a period of [*] c onsecutive months, or for [*] months out of a [*] month period, or if the service levels set forth in subparagraph 8(d) 1 or 2 fall below [*]% in any one month, Subscriber may, upon thirty (30) days' prior written notice, seek to terminate this Agreement, without payment of the cancellation charge set forth in paragraph 8(b). Subscriber will comply with the dispute resolution process set forth in paragraph 10(a) before termination of the





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Agreement. The parties wil l participate in the mediation process expeditiously and will, subject to the availability of mediators, conclude such proceedings within one month of commencement. Nothing herein prohibits BETA Systems from challenging the propriety of any such terminati on through the process set forth in paragraph 10(b) or as otherwise permitted in this Agreement.



(f) The parties will agree on development schedules for projects requested by Subscriber. Upon receipt of a development request from Subscriber BE TA Systems will provide written confirmation of its receipt of the specifications and an estimate of the time for project completion. Subscriber is responsible for setting priority levels on all requested development projects. For all proprietary and cu stom work requested by Subscriber, Subscriber will pay the programming charges set forth on Schedule A.



9. Disclaimer of Warranties and Limitations of Liability.

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(a) Disclaimer of Warranty. EXCEPT AS SPECIFICALLY PROVIDED HEREIN,

---------------------- THERE ARE NO, AND BETA SYSTEMS EXPRESSLY DENIES, REJECTS AND DISCLAIMS ANY, WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR WARRANTIES OF THE CORRECTNESS, ACCURACY, PRECISION, TIMELINESS OR COMPLETENESS OF ANY INFORMATION OR SERVICES PROVIDED THROUGH BETAHOST.



(b) Limitation of Liability. BETA SYSTEMS, ITS AFFILIATES,

----------------------- EMPLOYEES, OFFICERS AND AGENTS SHALL NOT BE LIABLE TO SUBSCRIBER OR TO ANY THIRD PARTY FOR ANY LOSS OR DAMAGE, WHETHER DIRECT OR INDIRECT, RESULTING FROM DELAYS OR INTERRUPTIONS OF SE RVICE DUE TO MECHANICAL, ELECTRICAL OR WIRE DEFECTS OR DIFFICULTIES, STORMS, STRIKES, WALK-OUTS, EQUIPMENT OR SYSTEMS FAILURES, OR OTHER CAUSES OVER WHICH BETA SYSTEMS, ITS AFFILIATES, EMPLOYEES, OFFICERS, OR AGENTS AGAINST WHOM LIABILITY IS SOUGHT, HAVE N O REASONABLE CONTROL, OR FOR LOSS OR DAMAGE, DIRECT OR INDIRECT, RESULTING FROM INACCURACIES, ERRONEOUS STATEMENTS, ERRORS OF FACT, OMISSIONS, OR ERRORS IN THE TRANSMISSION OR DEL ...