eTrade 2007 Annual Report Download - page 170

route at least the Minimum Covered Orders to the Company for the Company Services and the Company shall, in its sole discretion,
determine to execute such Covered Orders either as principal or by acting as riskless principal or agent, including, where applicable,
determining the market center for execution of such Covered Orders, in any case in accordance with Section 2.3. The Company shall
provide the Company Services for the Covered Orders that are routed to it in accordance with this Section 2.1(a). Nothing herein shall
limit the ability of Parent to route Covered Orders in excess of the Minimum Covered Orders to the Company.
(b) Parent’s Alternate Connectivity. Parent may maintain alternate connectivity for routing of Covered Orders in NMS
Stocks or Options to Exchanges, market centers or other Broker-Dealers, and Parent shall be permitted to route to such Exchanges,
market centers or other Broker-Dealers the minimum number of Covered Orders needed to maintain such connectivity; provided, that
Parent and its Affiliates route to the Company at least the Minimum Covered Orders in accordance with Section 2.1(a). The
composition of Covered Orders in Options for such alternate routing shall be a neutral sample representative of the broad cross section
of all Covered Orders in Options. Any Covered Orders in Options that are routed to any Exchange, market center or Broker-Dealer
pursuant to this Section 2.1(b) shall count toward the two and one half percent (2.5%) of Covered Orders in Options that Parent is
permitted to exclude from the Covered Orders in Options that Parent and its Affiliates are required to route to the Company and its
Affiliates under this Agreement. Any Covered Orders in NMS Stocks that are routed to any Exchange, market center or Broker-Dealer
pursuant to this Section 2.1(b) shall count toward the sixty percent (60%) of Covered Orders in NMS Stocks that Parent is permitted to
exclude from the Covered Orders in NMS Stocks that Parent and its Affiliates are required to route to the Company and its Affiliates
under this Agreement.
(c) Securities Exchange Act Compliance. The Company covenants and agrees to provide to Parent or any of its Affiliates
such information as it requires to prepare and publish its disclosures required by Rule 606 of Regulation NMS of the Securities
Exchange Act with respect to the routing of Covered Orders to the Company. Further, the Company and Parent shall cooperate to
design their respective order routing and reporting processes such that the venues where Covered Orders (or portions thereof) are
ultimately executed can be identified and reported on Parent’s or any of its Affiliate’s required disclosures pursuant to Rule 606 of
Regulation NMS of the Securities Exchange Act consistent with Legal Requirements.
(d) Order Book. The Company shall maintain a good-til-cancelled order book for open Orders that remain in effect until
executed or cancelled.
(e) NMS Stock Orders in Excess of Minimum Covered Orders. Parent shall not, and shall ensure that its Affiliates do not,
directly or indirectly accept any “payment for order flow” (as defined in Rule 10b-10(d)(8) of the Securities Exchange Act) from any
market maker, other than the Company, with respect to Covered Orders in
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