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Strategic Alliance

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STRATEGIC ALLIANCE AGREEMENT


This Strategic Alliance Agreement (this "Agreement"), dated as of April 29, 2002, by and between Intuit Inc., a Delaware corporation, having offices at 2535 Garcia Avenue, Mountain View, California 94043 ("Intuit"), Muriel Siebert & Co., Inc., a Delaware corporation, having offices at 885 Third Avenue, New York, New York 10022 ("Siebert") and, for purposes of Sections 1(e)(v), 4(a), 4(d) and 9(c), Investment Solution, Inc., a Delaware corporation ("ISI").


WHEREAS, Intuit is engaged in the business of providing personal finance software products and services, including, without limitation, its Quicken(R) desktop software products Quicken Basic, Quicken Deluxe, Quicken Home and Business and Quicken Suite (excluding TurboTax and any third party products contained therein) (collectively, "Quicken") and its Internet-based Quicken.com(TM) service ("Quicken.com") (collectively, the "Quicken Products");


WHEREAS, Siebert is engaged in the business of providing retail brokerage services for publicly traded securities, mutual funds and other related products;


WHEREAS, the parties desire to work together to develop, market and operate the Joint Brokerage Service (as defined herein); and


WHEREAS, ISI is an affiliate of Intuit that is applying for registration as a limited purpose broker-dealer and whose business will consist in part of referring users of the Quicken Products to the Joint Brokerage Service.


NOW, THEREFORE, in consideration of the mutual promises contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows (with certain capitalized terms having the meanings set forth in Section 13 hereof):


1. STRATEGIC ALLIANCE.


(a) Objective of the Strategic Alliance. The exclusive strategic alliance contemplated herein will be the vehicle whereby Intuit and Siebert together offer a joint brokerage service to customers as contemplated herein, Intuit as a technology, marketing and content provider and Siebert as a broker-dealer and provider of certain brokerage and other services.


(b) Development. The milestones for development of the Joint Brokerage Service are set forth in Exhibit A. The parties shall provide the specifications for, and the features and functionality for use by the customers of, the Joint Brokerage Service that are set forth in the definition of Joint Brokerage Service, the definition of Brokerage Platform and in Exhibit A.


(c) Customer Agreement. Prior to a customer's use of the Joint Brokerage Service, such customer shall enter into a customer agreement with Siebert in the form agreed upon by the parties and attached as Exhibit B hereto from time to time.


(d) Branding. Intuit and Siebert, based on market and customer research and subject to regulatory requirements, will determine the branding of the Joint Brokerage Service. Final approval of the branding will be mutually agreed upon. The current example of the branding to be used for the Joint Brokerage Service is attached hereto as Exhibit C.


(e) Customer and Other Services. The parties will have the following responsibilities with respect to the development, marketing and operation of the Joint Brokerage Service.


(i) Siebert shall provide the standard broker-dealer services, including without limitation systems and customer service, compliance review, new accounts administration and telephone trading operations for the Joint Brokerage Service, in accordance with applicable laws, industry standards and the service standards set forth in Exhibit D (which standards will be at least as high as the highest standard provided by Siebert to its other customers from time to time on or after the Launch Date).


(ii) Intuit shall provide technical service related to the Quicken Products utilized by customers of the Joint Brokerage Service, in accordance with applicable laws, industry standards and the service standards set forth in Exhibit D (which standards will be at least as high as the highest standard provided by Intuit to its other customers from time to time on or after the Launch Date).


(iii) [Intentionally Omitted.]


(iv) As between the parties, Siebert shall be solely responsible for the Content, including without limitation any Intuit Licensed Content licensed to Siebert by Intuit or other third-party Content providers, that is available on or accessible through the Joint Brokerage Service, complying with applicable laws and regulations of any Regulatory Authority having jurisdiction over Siebert. In furtherance of the foregoing, (I) Intuit shall provide any Content to Siebert prior to its being made available on or accessible through the Joint Brokerage Service, and Siebert shall have the right, in its reasonable discretion, to approve or disapprove such Content (and such Content shall not be made available on or accessible through the Joint Brokerage Service if Siebert disapproves of it, it being understood that the primary focus of Siebert's review of such Content shall be with respect to regulatory concerns) and (II) Siebert shall have the right, at any time, to require Intuit to remove any Content from the Joint Brokerage Service so long as the removal of such Content is based upon regulatory concerns. In the case of the foregoing subclause (I), Siebert shall generally review and approve or disapprove of Content within five (5) Business Days after Intuit has provided such Content to Siebert, subject to a longer review period for particularly complex or lengthy Content. The parties shall agree on a form of disclaimer to be used on the Joint Brokerage Service. As between the parties, Intuit shall be solely responsible for the Content, including without limitation any Intuit Licensed Content, that is available on or through Quicken.com (other than the "Investing" tab (or its successor tab) or the Joint Brokerage Service, it being understood that the Content on the "Investing" tab (or its successor tab) is a subset of the Content on the Joint Brokerage Service) complying with applicable laws and regulations of any Regulatory Authority having jurisdiction over Intuit.


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(v) Intuit and ISI will use commercially reasonable efforts to promote the brokerage and other services provided by Siebert through the Joint Brokerage Service, including without limitation by referring users of the Intuit products to the Joint Brokerage Service in accordance with the marketing plan adopted and approved by the Steering Committee.


(vi) Prior to the Launch Date, Intuit and Siebert shall provide training on the terms set forth in Exhibit D.


(vii) Each party shall market the Joint Brokerage Service in accordance with the marketing plans to be developed by the Operating Teams.


(f) Tracking and Reporting. The Operating Teams will track the key metrics for the Joint Brokerage Service described on Exhibit E during the time frames set forth on such Exhibit. The parties shall deliver such reports as are described in Exhibit E.


2. BROKERAGE PLATFORM. Siebert will directly, and through its vendor(s), develop and provide to the Joint Brokerage Service the Brokerage Platform, in accordance with the development and delivery milestones set forth on Exhibit A. Although, as set forth above, Siebert may delegate such obligations to Pershing, responsibility for performance thereof shall remain the obligation of Siebert.


3. MANAGEMENT. The strategic alliance will be managed by a Steering Committee (the "Steering Committee") in accordance with the terms and conditions set forth in Exhibit F. The Steering Committee will establish "operating teams" (the "Operating Teams") in accordance with the terms and conditions set forth in Exhibit F.


4. FINANCIAL ASPECTS.


(a) 50/50 Split of Gross Revenues.


(i) Gross Revenues generated from (I) Joint Customers (except as contemplated by subsection (ii) below) and (II) (x) any Existing Siebert Customer that migrates to the Joint Brokerage Service after the period beginning on the Launch Date and ending twenty-four (24) months thereafter, (y) any Future Siebert Customer that migrates to the Joint Brokerage Service after the period beginning on the date on which such customer establishes an account at Siebert and ending twenty-four (24) months thereafter and (z) any Acquired Siebert Customer that migrates to the Joint Brokerage Service after the period beginning on the effective date of the acquisition of such customer and ending twenty-four (24) months thereafter, from brokerage products and services offered through the Joint Brokerage Service as of the Launch Date, will be split 50/50 between ISI and Siebert. Siebert will pay ISI its share of Gross Revenue pursuant to Section 4(d). The parties agree that the customers in (x) through (z) shall be included in the definition of Joint Customers.


(ii) Gross Revenues generated from Joint Customers from brokerage products and services offered through the Joint Brokerage Service, which products and services are not available through the Joint Brokerage Service as of the Launch Date, will be split in accordance with a formula, and paid at a time, to be determined by the Steering Committee.


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(b) 50/50 Split of Expenses. The parties will not be reimbursed for any costs or expenses incurred in connection with the strategic alliance except for Incremental Expenses. Incremental Expenses will be split 50/50 between Intuit and Siebert, provided that such Incremental Expenses are within the budget set forth in the annual business and financial plan approved by the Steering Committee (which, for the Start-up Period, shall be the Initial Business Plan). Each party will advance any and all Incremental Expenses incurred by such party during a True-Up Period. The Steering Committee shall from time to time review and approve, in its sole discretion, the payment of any Incremental Expenses that are in excess of budgeted amounts or that were not specifically set forth in the annual business and financial plan approved by the Steering Committee (which, for the Start-up Period, shall be the Initial Business Plan). Notwithstanding anything to the contrary set forth herein, the parties agree that all Incremental Expenses incurred by the parties since February 4, 2002 that are reflected and detailed in the Initial Business Plan shall be split 50/50.


(c) Reports of Incremental Expenses and Gross Revenues. Within fifteen (15) calendar days after the end of each month, (i) Siebert shall deliver to Intuit a report setting forth all Incremental Expenses (the "Siebert IE") that pursuant to Section 4(b) are subject to the Incremental Expenses split and that have been incurred by Siebert during such month, (ii) Intuit shall deliver to Siebert a report setting forth all Incremental Expenses (the "Intuit IE") that pursuant to Section 4(b) are subject to the Incremental Expenses split and that have been incurred by Intuit during such month and (iii) Siebert shall deliver to Intuit a report setting forth the Gross Revenues described in Section 4(a)(i) that are earned by Siebert during such month. Each of the reports referred to in this subsection shall be prepared on the accrual basis of accounting in accordance with GAAP. Any adjustments required to correct such reports shall be made in the report for the month following discovery of the need for the adjustment and shall be brought to the attention of, and explained to, the non-discovering party. The parties will promptly furnish each other back-up schedules or other information requested in connection with any of the reports referred to in this subsection.


(d) True-Up of Gross Revenues. Within twenty-five (25) calendar days after the end of each True-Up Period, based on reports delivered by Siebert under subsection (c)(iii) above, Siebert, in consultation with Intuit's finance representative, shall calculate the amount equal to fifty percent (50%) of the Gross Revenue for that True-Up Period and shall pay such amount to ISI. Notwithstanding anything in this Agreement to the contrary, Siebert shall not be required to make any payment of Gross Revenue that would otherwise be due to ISI (or a person designated by Intuit) under this Agreement if, at the time such payment would be due, each of the following conditions exists: (i) ISI is statutorily disqualified (within the meaning of Section 3(a)(39) of the Exchange Act) from conducting a business as a broker-dealer or is not then registered with the SEC as a broker-dealer; (ii) Intuit has not designated another SEC registered broker-dealer to receive such payments (which broker-dealer is not, at the time such payment would be due, statutorily disqualified (within the meaning of Section 3(a)(39) of the Exchange Act) from conducting a business as a broker-dealer and is, at such time, registered with the SEC as a broker-dealer), such broker-dealer to be reasonably acceptable to Siebert; and (iii) Siebert reasonably believes (with the written advice of its legal counsel to such effect, which legal counsel may assume that the relevant facts presented to it by Siebert are true and correct without independent investigation) that Siebert's payment of such Gross Revenue would violate any applicable law or any other rule or regulation of any Regulatory Authority; provided, however, that in the event that Siebert refrains from making any payment of Gross Revenue pursuant to this sentence, Intuit shall use its best efforts (and Siebert shall use its commercially reasonable efforts to cooperate in good faith with Intuit) to restructure the compensation arrangements hereunder to confer upon Intuit the economic benefits contemplated hereunder consistent with applicable law.


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(e) True-Up of Incremental Expenses. Within twenty-five (25) calendar days after the end of each True-Up Period, based on the reports delivered by Intuit and Siebert under subsections (c)(i) and (ii) above, Siebert, in consultation with Intuit's finance representative, shall calculate an amount equal to fifty percent (50%) of the collective Incremental Expenses of Intuit and Siebert for that True-Up Period (the "IE Split") and (I) if the Siebert IE for such True-Up Period is greater than the IE Split, then Intuit shall pay to Siebert such difference, or (II) if the Intuit IE for such True-Up Period is greater than the IE Split, then Siebert shall pay to Intuit such difference.


(f) Payments. Any payment to be made pursuant to subsections (d) and (e) above shall be made within seven (7) calendar days after Siebert, in consultation with Intuit's finance representative, completes such calculation. All payments made pursuant to this Section 4 shall be made by wire transfer of immediately available funds to the account for the payee set forth on Exhibit G or such other account as Siebert or Intuit (or ISI), as the case may be, may designate in writing from time to time. In the event any such payment is not made when due, the entire unpaid amount shall accrue interest until it has been paid in full at the rate of the lesser of (i) prime plus 2% per annum or (ii) the highest rate then permitted under applicable law.


(g) Section 4 Audit Rights. Based on the calculations made in this Section 4, within twenty-five (25) calendar days after the end of each True-Up Period, Siebert shall prepare and issue a report (a "True-Up Statement") setting forth the amount of the Gross Revenue split for Siebert and Intuit, the IE Split and the amount paid to Siebert or Intuit for each True-Up Period. Siebert and Intuit shall have the right, at their own expense, to audit each other's books and records relating to a True-Up Statement. Such an audit may be conducted no more than once as to each True-Up Statement by employees of Intuit or Siebert or an accounting firm that is a member of the American Institute of Certified Public Accountants, Public Companies Practice Section. The results of any audit shall be promptly reported to the audited party and any issues shall be resolved by the Steering Committee. The Gross Revenue split and the IE Split set forth in a True-Up Statement shall become conclusive and not subject to challenge twelve (12) months after the True-Up Statement is issued unless there is an audit ongoing or any unresolved audit issue is being discussed by the Steering Committee in which case it shall become conclusive and not subject to challenge when resolved.


5. Cross Selling.


(a) Intuit shall not directly promote on the Joint Brokerage Service either competitive brokerage products or any other third party advertisements (except Compaq advertisements); provided, however, that Intuit shall not be prohibited from promoting products or services that are under the Intuit brands or co-brands on the pages of the Joint Brokerage Service that are not Pershing-framed pages, which products or services would not otherwise be directly competitive with brokerage products. On the Pershing-framed pages, the parties shall promote only advertisements that benefit the Joint Brokerage Service. Intuit shall not place competitive brokerage advertisements on the Quicken.com home page or on the page after clicking on the "Investing" tab (or its successor tab) but before logging on to the Joint Brokerage Service. Intuit shall not otherwise, however, be prohibited from providing branded or co-branded tools or content (but not Brokerage Accounts) to other broker-dealers or from promoting competitive products or services of broker-dealers through a variety of advertising and marketing relationships.


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(b) Siebert shall not directly promote on the Joint Brokerage Service (including, without limitation by providing hyperlinks to a competitor's web site from the Joint Brokerage Service) any products or services that directly compete with the products and services currently provided by Intuit. In the event that, after the Effective Date, Intuit provides additional products or services that are competitive with the products or services that Siebert has been promoting on the Joint Brokerage Service, Siebert shall cease promoting those products or services on the Joint Brokerage Service as soon as commercially reasonably practicable and shall not renew such promotional offerings. Following a Change of Control as to which Intuit does not terminate this strategic alliance, neither Siebert nor the acquiring entity, as the case may be, shall (i) promote on the Joint Brokerage Service or otherwise market to Joint Customers any of the acquirer's products or services or (ii) move the Joint Customers from the Brokerage Platform on the Joint Brokerage Service to another brokerage platform.


(c) Notwithstanding anything to the contrary set forth in this Article 5, (i) Intuit shall not be prohibited from directly or indirectly promoting (except that they shall be so prohibited on the Pershing-framed pages of the Joint Brokerage Service) products and services marketed to small businesses, sole proprietors or individual employees through their employers pursuant to the Principal Agreement and (ii) Siebert shall not be prohibited from directly or indirectly promoting to Siebert Customers, on any pages of the Joint Brokerage Service, any products or services.


6. INTELLECTUAL PROPERTY; OWNERSHIP OF ASSETS.


(a) Intellectual Property.


(i) Intuit Ownership. As between the parties, Intuit will own and control all right, title and interest in and to (I) the look and feel of the Joint Brokerage Service, including, without limitation, as between the parties the look and feel of all aspects of the Quicken Products that relate to the Joint Brokerage Service (excluding the look and feel of the Siebert Content and the Pershing-framed pages of the Joint Brokerage Service (other than Intuit Content included thereon)), (II) the software, APIs, and other intellectual property embodied in the Quicken Products and the Joint Brokerage Service (excluding the Pershing-framed pages of the Joint Brokerage Service (except for Intuit Content included therein) and the Siebert Content); and (III) all Intuit trademarks and service marks, including without limitation those Intuit trademarks and service marks appearing in the Quicken Products and the Joint Brokerage Service pages.


(ii) Siebert Ownership. As between the parties, Siebert will own and control all right, title and interest in and to (I) the software and other intellectual property embodied in Siebert's website (excluding the Intuit Content, if any), (II) the look and feel of the Pershing-framed pages of the Joint Brokerage Service (excluding the Intuit Content included thereon, if any), and (III) all Siebert trademarks and service marks, including without limitation those Siebert trademarks and service marks appearing in the Quicken Products and the Joint Brokerage Service pages.


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(b) Customer Information. Joint Customer information will be jointly owned by the parties and each of the parties will ensure that the Joint Customers are so informed.


(c) Trademark Licenses.


(i) During the Term and, if applicable, the Wind-Down Period, each party hereby grants to the other a nonexclusive, worldwide, royalty-free, non-transferable, non-sublicensable (except as set forth in the last sentence of this subsection) license to use the marks of the other party listed below (the "Marks") only in accordance with the terms of this Agreement and to carry out the purposes of this Agreement, subject to prior review and approval by the other party and in compliance with the other party's trademark policies in effect from time to time including, but not limited to, trademark usage and cooperative advertising policies. The Marks are:


Intuit Marks: Quicken.com, Quicken Brokerage and Quicken


Siebert Marks: Siebert and design


Notwithstanding the foregoing, Siebert may sublicense these rights, in whole or in part, to Pershing provided, that Pershing agrees in a writing, in form and substance reasonably acceptable to Intuit and to which Intuit is an express third party beneficiary, to comply with the terms of this Section 6(c) in connection with its use of Intuit's Marks.


(ii) Each of Intuit and Siebert shall have the right to pre-approve any use of any of its Marks by the other party in any medium, including, without limitation, any press releases. Such approval shall not be unreasonably withheld, delayed or conditioned. Such approval shall be accomplished by notifying the owner of the Marks in writing of the intended use. The owner of the Marks shall have five (5) Business Days from its receipt of such notice to make comments and/or approve such use; provided, however, that in the case of (A) a press release that can be made more than thirty-six (36) hours, but is required to be made less than five (5) Business Days, after the party seeking approval becomes aware of the facts requiring disclosure or (B) an earnings press release, the owner of the Marks shall have thirty-six (36) hours from its receipt of such notice to make comments and/or approve such use; provided, further, that in the case of a press release that is required to be made less than thirty-six (36) hours after the party seeking approval becomes aware of the facts requiring disclosure, the party seeking approval shall to the extent practicable seek the input of the owner of the Marks as to such use. In the case of the five (5) Business Day and thirty-six (36) hour approval periods, if the owner of the Marks does not provide such a response within such period, it shall be deemed to have approved the use. Any use by one party of the other party's Marks shall inure to the benefit of the other party as trademark owner.


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(d) Linking Licenses.


(i) License to Intuit. During the Term and, if applicable, the Wind-Down Period, Siebert hereby grants to Intuit a non-exclusive, worldwide, royalty-free, non-transferable, non-sublicensable license to (I) link to the Pershing-framed pages of the Joint Brokerage Service and (II) subject to Siebert's prior review and approval, to use, reproduce, make available and publicly display, reframe, publicly market, distribute, transmit, promote and sublicense the Siebert Owned Content, in whole or in part, in the Joint Brokerage Service, solely in connection with Intuit's performance of this Agreement; provided, however, that any sublicensing of such Siebert Owned Content by Intuit shall only be in connection with the operation of the Joint Brokerage Service.


(ii) License to Siebert. During the Term and, if applicable, the Wind-Down Period, Intuit hereby grants to Siebert a non-exclusive, worldwide, royalty-free, non-transferable (except as set forth in the last sentence of this subsection), non-sublicensable license to (I) link to Quicken.com and the non-Pershing-framed pages of the Joint Brokerage Service and (II) subject to Intuit's prior review and approval, to use, reproduce, make available and publicly display, reframe, publicly market, distribute, transmit, promote and sublicense the Intuit Content, in whole or in part, on the Pershing-framed pages of the Joint Brokerage Service, solely in connection with Siebert's performance of this Agreement; provided, however, (I) that Intuit shall have no obligation to sublicense any portion of the Intuit Licensed Content or any of the Intuit Owned Content that is not owned by Intuit as to which a required third party consent to such sublicense has not been obtained or as to which a third party would be entitled to additional consideration for such sublicense, (II) that Siebert's sublicense with respect to the Intuit Licensed Content or any of the Intuit Owned Content that is not owned by Intuit shall be subject to any agreements between Intuit and the sources or providers of such Intuit Licensed Content or Intuit Owned Content that is not owned by Intuit, (III) that any restrictions to the sublicense or other obligations imposed on Siebert by reason of the foregoing subsection (II) must be communicated to Siebert in writing by Intuit at least thirty (30) calendar days before Siebert will be bound by such restrictions and/or obligations, and (IV) that any sublicensing of such Intuit Content by Siebert shall only be in connection with the operation of the Pershing-framed pages of the Joint Brokerage Service. Siebert shall have the right to assign all of its rights and obligations under this Section 6(d)(ii) to Pershing, provided that Pershing assumes in a writing, in form and substance reasonably acceptable to Intuit and to which Intuit is an express third party beneficiary, all of Siebert's rights and obligations under this Section 6(d)(ii).


(e) Third Party Licenses. Intuit and Siebert will cooperate in good faith to obtain any third party licenses that the Steering Committee determines are appropriate for the Joint Brokerage Service, including without limitation licenses from Pershing.


7. REPRESENTATIONS AND WARRANTIES; INDEMNITY.


(a) Representations and Warranties.


(i) Each party represents and warrants to the other as of the Effective Date and as of the Launch Date that (I) it has the full right, power and authority to enter into this Agree
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