Exhibit 10.14
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June 7, 1993
(Revised 12/27/93)
Euro Brokers, Maxcor Inc.
Xxx Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, X.X. 00000-0000
Re: Agreement For Securities Clearance Services
Dear Sirs:
This letter sets forth our agreement ("Agreement") concerning certain
clearing services to be performed by Daiwa Securities America Inc. ("Daiwa") for
Euro Brokers Maxcor Inc. ("Introducing Firm") with respect to certain of
Introducing Firm's customer transactions in the securities specified in Exhibit
A hereto ("Specified Securities"). As described fully below, Introducing Firm
shall pay to Daiwa clearing fees calculated based upon the schedule set forth in
Exhibit B hereto. Notwithstanding anything to the contrary contained herein, it
is expressly understood and agreed that this Agreement is contingent upon the
approval of the New York Stock Exchange, Inc. ("NYSE").
1. Subject to the provisions of this Agreement and any special limitations
set forth in Exhibit C hereto, Daiwa shall clear securities transactions on a
fully disclosed basis for those of Introducing Firm's customer accounts
("Accounts") as may be mutually agreed between the parties hereto. Daiwa shall
indicate its acceptance of such Accounts by written notice to Introducing Firm.
Daiwa may, in its sole discretion, but not unreasonably, notwithstanding any
other provision of this Agreement, at any time refuse to accept any particular
trade for any Account, provided, however, that Daiwa will endeavor to give
Introducing Firm prompt written notice in the event that Daiwa should determine
not to accept trades in any class or type of security or the trades of any
particular Account.
2. Introducing Firm shall arrange for completion of all Daiwa forms and
provide any supporting documents required for the opening and maintenance of the
Account. In connection with the introduction of each prospective Account,
Introducing Firm shall promptly furnish Daiwa with all information concerning
its customer and Introducing Firm's relationship with its customer and any
related documents that Daiwa may reasonably require.
Nothing herein shall restrict Daiwa from making any further inquiry or
investigation as Daiwa deems necessary.
3. Daiwa shall send a letter substantially in the form of Exhibit C hereto
to each accepted Account. Daiwa shall send a copy of such letter to Introducing
Firm.
4. (a) 4Daiwa shall clear trades under this Agreement by executing as a
principal, back-to-back purchases and sales of Specified Securities initiated by
Introducing Firm between an Account and Daiwa on the one hand, and Daiwa and
another Account or dealer on the other (each a "Back-to-Back Transaction").
Introducing Firm by its designated employee(s) shall notify promptly a
designated employee of Daiwa by telephone of the Terms of each Back-to-Back
Transaction that has been initiated; if such trade is rejected by Daiwa, Daiwa
shall by telephone (with written facsimile confirmation) promptly notify
Introducing Firm, who shall promptly notify its customer, and if such trade has
been accepted by Daiwa, Daiwa shall directly confirm it with Introducing Firm's
customer and the other dealer, by telephone. Nothing herein shall prohibit
Introducing Firm from initiating a purchase or sale for an Account directly with
Daiwa as dealer of its inventory. Introducing Firm and its customer shall each
be provided with an Account's purchases and sales confirmations and statements
of Account by Daiwa at such times and with such frequency as Daiwa normally
provides such statements to its own customers. Daiwa shall notify Introducing
Firm of any discrepancies in trade confirmations with contra parties promptly
upon discovery but no later than 48 hours after trade date or the date which the
trade is received, whichever is later.
(b) Back-to-Back Transactions shall normally generate revenue as a
result of the difference between the price at which Introducing Firm arranges
for Daiwa to purchase a security from an Account or another dealer (or, if sold
from Daiwa inventory, the price quoted to Introducing Firm) and the price at
which Introducing Firm arranges for Daiwa to sell such security to another
dealer or an Account (or, if purchased for Daiwa inventory, the price quoted to
Introducing Firm). Such revenue shall be retained by Daiwa until the end of each
calendar month during the term hereof, at which time Daiwa shall pay to
Introducing Firm, within five business days after the end of such calendar
month, an amount equal to any revenue remaining, after deduction of Daiwa's
clearing fees therefrom ("Remaining Revenue").
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(c) Daiwa shall furnish Introducing Firm with a supporting schedule
together with each Remaining Revenue payment, and determination of the amount
payable to Introducing Firm with respect to any calendar month shall be
conclusive and binding on the parties hereto if Introducing Firm does not object
thereto in writing, with specific details of its objections, within thirty (30)
days after its receipt of such supporting schedule.
5. This Agreement and all transactions in the Accounts, will be subject to
the applicable Constitution, Rules, By-Laws, Regulations and customs of any
securities market, association, exchange or clearing house where such
transactions are effected or of which Daiwa is a member, and also to all
applicable U.S. Federal and state laws and regulations. All of the foregoing are
hereinafter called the "Applicable Rules".
6. Except as otherwise specified in this Agreement Introducing Firm shall
be solely responsible for the opening, approving and monitoring of the Accounts,
and ensuring that the transactions conducted therein are in compliance with the
Applicable Rules. Such responsibility includes, but is not limited to: (i) using
due diligence to learn and on a continuing basis to know the essential facts of
each customer, knowing all persons holding power of attorney over any Account,
being familiar with each order in any Account and at all times to fully comply
with Rule 405 of the New York Stock Exchange, Inc. and the Rules of Fair
Practice of the National Association of Securities Dealers, Inc. ("NASD"), and
any interpretations thereof, and all similar Applicable Rules; (ii) selecting,
investigating, training and supervising all personnel who open, approve or
authorize transaction in the Accounts; (iii) establishing written procedures for
the conduct of the Accounts and ongoing review of all transactions in Accounts,
and maintaining compliance and supervisory personnel adequate to implement such
procedures; (iv) determining the suitability of all transactions; (v) ensuring
that there is a reasonable basis for all recommendations made; (vi) determining
the appropriateness of the frequency of trading in Accounts; (vii) determining
the authorization and legality of each transaction in the Account; (viii)
acceptance of orders; (ix) initiating Back-to-Back Transactions and determining
the amount of any difference between the prices paid or received by an Account
for a Specified Security and the prices paid or received by Daiwa for said
Specified Security; (x) obtaining and maintaining all documents necessary for
the performance of Introducing Firm's responsibilities under this Agreement and
retaining such documents in accordance with all the Applicable Rules; and (xi)
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responding to all its customer inquiries and complaints, and promptly notifying
Daiwa in writing of complaints concerning Daiwa.
7. (a) Daiwa shall be responsible for (i) entering into accepted
Back-to-Back Transactions as directed by Introducing Firm; (ii) the delivery and
for receipt of funds and/or Specified Securities to and from Accounts, as
applicable, and for the transfer of Specified Securities to and from Accounts;
and (iii) the receipt, timely delivery and safeguarding of funds and securities,
and maintenance of books and records (including preparation and timely
transmittal of trade confirmations and statements) relating to transactions
between Daiwa and Accounts.
(b) Daiwa shall have no responsibility for (i) supervising the
investment advisory, sales and trading activities of Introducing Firm's
employees or for any of Introducing Firm's books or records or (ii) opening or
approving Accounts, screening of orders or for monitoring of Account activity.
For purposes of the Securities and Exchange Commission's financial
responsibility rules and SIPC, the Introducing Firm's customers will be
considered customers of Daiwa and not customers of the Introducing Firm. Nothing
herein shall cause the Introducing Firm's customers to be construed or
interpreted as customers of Daiwa for any other purpose or to negate the intent
of any other section of this agreement, including but not limited to, the
delineation of responsibilities as set forth elsewhere in this Agreement.
8. Each party shall be solely responsible for (i) its own errors in
connection with any Account; (ii) adherence to the respective securities laws,
regulations and rules which apply to it regarding its own operations and the
supervision of its own personnel; (iii) compliance with all restricted/control
stock requirements, as applicable to it; (iv) compiling and filing its
respective regulatory reports, as applicable; (v) supplying the other with
reasonable access to its relevant records and supplying any information in its
possession reasonably requested by such party in order for both parties to
properly perform their respective functions under the Agreement
9. Introducing Broker represents, warrants and covenants to Daiwa as
follows:
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(a) It is a member in good standing of the NASD.
(b) It is and during the term of this Agreement will remain duly
registered or licensed and in good standing as a broker/dealer under the
Applicable Rules.
(c) It has all the requisite authority in conformity with all
Applicable Rules to enter into this Agreement and to retain the services of
Daiwa in accordance with the terms hereof and you have taken all necessary
action to authorize the execution of this Agreement and the performance of the
obligations hereunder.
(d) It is in compliance, and during the term of this Agreement will
remain in compliance with (i) the capital and financial reporting requirements
of any and all national securities exchange or other securities exchange and/or
securities association of which it is a member, (ii) the capital requirements of
the Securities and Exchange Commission, (iii) the capital requirements of every
state in which it is licensed as a broker/dealer, and (iv) the NASD Rules of
Fair Practice.
(e) It shall not generate any statements, xxxxxxxx or confirmations
respecting any Account or transaction in any Account.
(f) It shall provide representatives of any governmental body having
jurisdiction over the respective businesses of the parties with reasonable
access to the records relating to Accounts and their owners.
(g) It shall keep confidential any information it may acquire as a
result of this Agreement regarding the business and affairs of Daiwa, which
requirements shall survive the life of this Agreement.
10. Daiwa represents, warrants and covenants as follows:
(i) Daiwa is a member in good standing of the National Association of
Securities Dealers, Inc. and of the major national securities exchanges.
(ii) Daiwa is and during the term of this Agreement will remain duly
licensed and in good standing as a broker/dealer under the Applicable
Rules.
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(iii)Daiwa has all the requisite authority, in conformity with all
Applicable Rules to enter into and perform this Agreement and has taken all
necessary action to authorize the execution of this Agreement and the
performance of the obligations hereunder.
(iv) Daiwa is in compliance, and during the term of this Agreement
will remain in compliance with (1) the capital and financial reporting
requirements of every national securities exchange and/or other securities
exchange or association of which it is a member, (2) the capital
requirements of the Securities and Exchange Commission, and (3) the capital
requirements of every state in which it is licensed as a broker/dealer.
(v) The names and addresses of Introducing Firm's customers which have
or which may come to Daiwa's attention in connection with the clearing and
related functions it has assumed under this Agreement are confidential and
shall not be utilized by Daiwa except in connection with the functions
performed by Daiwa pursuant to this Agreement. Notwithstanding the
foregoing, should any customer of Introducing Firm request, on an
unsolicited basis that Daiwa become its broker, acceptance of such Account
by Daiwa shall in no way violate this representation and warranty, nor
result in a breach of this Agreement.
(vi) Daiwa shall keep confidential any information it may acquire as a
result of this Agreement regarding your business and affairs, which
requirement shall survive the life of this Agreement.
11. (a) Each party (here referred to as the "indemnifying party") shall
indemnify the other, and its officers, directors, employees, agents and
affiliates (each of the foregoing being an "indemnified party") from and against
any and all claims, losses, damages (excluding any indirect, consequential or
special damages), expenses (including, without limitation, reasonable attorneys'
fees) and liabilities (all of the foregoing being referred to as "liabilities"),
directly caused by or directly resulting from the acts or omissions, under or in
connection with this Agreement or any transaction made pursuant to this
Agreement, of the indemnifying party, or any of its officers, directors,
employees or agents, including, without limitation, any failure by the
indemnifying party, its officers,
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directors, employees or agents to comply with any applicable law or regulation,
and any fraud, dishonesty or gross negligence by the indemnifying party.
Notwithstanding anything expressed or implied to the contrary in the foregoing,
the parties agree: (i) without limiting the generality of the foregoing
indemnity, that Introducing Firm shall be solely liable for, and shall indemnify
Daiwa, its officers, directors, employees, agents and affiliates from and
against, any and all liabilities in any way caused by or resulting from any
investment advice or any incorrect or unauthorized instructions given by
Introducing Firm; (ii) that in no event shall Daiwa, or any of its officers,
directors, employees, agents or affiliates, have any liability to Introducing
Firm (or any other indemnified party) for liabilities resulting from, or alleged
to have resulted from, Daiwa's exercise of its rights hereunder to refuse to
approve a particular Account or any particular trade or transaction in the
manner provided for herein; and (iii) that neither party shall be required by
the terms hereof to indemnify the other (or any other indemnified party) for any
liabilities to the extent caused by the negligent or wrongful conduct of the
indemnified party.
(b) Payment of indemnity obligations shall be made promptly following
receipt of written notice thereof and final determination of liability by
adjudication, arbitration or settlement agreed to by the indemnifying party.
Each party agrees to give the other prompt written notice of any grievance or
complaint, threat of action, commencement of litigation against either party in
connection with this Agreement or any transaction consummated pursuant hereto,
and of any other matter likely to give rise to an indemnity claim hereunder. The
indemnifying party shall have the right, at its option, to compromise or defend,
at its own expense and by its own counsel, any such matter involving the
asserted liability of the indemnified party, provided that the indemnifying
party may not, without the prior written consent of the indemnified party,
compromise any such asserted liability if the terms of such compromise require
any action by, or impose any liability upon, the indemnified party other than
the payment of money. If the indemnifying party intends to compromise or defend
any such asserted liability, it shall give prompt written notice to the
indemnified party of its intention to do so, and the indemnified party agrees to
cooperate fully with the indemnifying party and its counsel in such compromise
or defense. In any event, the indemnified party shall have the right, at its own
expense, to participate in the defense of any such asserted liability.
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12 (a) Daiwa shall limit its services pursuant to the terms of this
Agreement to that of clearing functions and the related services expressly set
forth herein and Introducing Firm shall not hold itself out as an agent of Daiwa
or of any subsidiary or company controlled directly or indirectly by or
affiliated with Daiwa. Neither this Agreement nor any operation hereunder shall
create a general or limited partnership, association or joint venture or agency
relationship between the parties.
(b) Introducing Firm shall not, without the prior written approval of
Daiwa, place any advertisement in any newspaper, publication, periodical or any
other media if such advertisement in any manner makes reference to Daiwa or to
the clearing arrangements and the services embodied in this Agreement.
(c) Should Introducing Firm in any way hold itself out as, advertise or
represent that you are the agent of Daiwa, Daiwa shall have the power, at its
option, to terminate this Agreement and Introducing Firm shall be liable for any
loss, liability, damage, claim, cost or expense (including but not limited to
fees and expenses of legal counsel) sustained or incurred by Daiwa as a result
of such a representation of agency or apparent authority to act as an agent of
Daiwa or agency by estoppel.
13. (a) To further ensure Introducing Firm's performance of its
obligations under this Agreement (including, without limitation, its indemnity
obligations), there shall be established a securities holding account with Daiwa
to be opened in the name of Introducing Firm and designated as the Introducing
Firm Collateral Account (the "Collateral Account"). The Collateral Account shall
at all times contain cash, securities, or a combination of both, having a market
value of not less than the sum set forth in Exhibit B hereto (the "Collateral
Amount"). Said securities shall consist only of direct obligations issued by or
guaranteed as to principal and interest by the United States and such other
securities as Daiwa may in writing consent to, in its sole discretion, from time
to time. As collateral security for all of its obligations to Daiwa under and
with respect to this Agreement, Introducing Firm hereby pledges, assigns and
grants a first priority security interest and lien to Daiwa in and upon all
property from time to time now or hereafter in the Collateral Account, and Daiwa
shall have all rights and remedies with respect thereto of a secured party under
the New York Uniform Commercial Code or other applicable law, as well as
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its other rights hereunder. Introducing Firm represents and warrants that any
collateral shall be free of any lien, pledge or interest other than that of
Daiwa. Introducing Firm shall be entitled to receive all cash distributions made
on or in respect of the securities unless the market value of the cash and/or
securities in the Collateral Account is less than the Collateral Amount. If the
Collateral Account consists of cash, Daiwa shall pay interest to the Introducing
Firm on this cash held from time to time at the rate mutually agreed upon. If at
any time the market value of the cash and/or securities in the Collateral
Account shall be less than ninety percent (90%) of the Collateral Amount, as
determined by Daiwa, Daiwa may, by notice to Introducing Firm, demand that
Introducing Firm deliver additional collateral to the Collateral Account to
increase the market value to the full Collateral Amount, in which event such
delivery shall be made within five business days following such demand. If the
market value of the cash and/or securities in the Collateral Account exceeds one
hundred and ten percent (110%) of the Collateral Amount, as determined by Daiwa,
Daiwa shall notify Introducing Firm, in which event Introducing Firm may, by
notice to Daiwa, demand that Daiwa authorize and direct the redelivery to
Introducing Firm of a portion of the collateral so that the remaining collateral
has a market value equal to at least the Collateral Amount.
(b) Introducing Firm may from time to time direct the investment of any
cash in the Collateral Account, but no purchases shall be made on margin and
securities purchased shall consist only of the aforementioned types of
securities. Except as provided herein, Introducing Firm shall not have access
to, nor have any right to transfer or withdraw any cash or securities from, the
Collateral Account without the prior written consent of Daiwa. The Collateral
Account shall not be deemed to be margin for any Customer accounts.
14. If Daiwa shall have any claim against Introducing Firm or shall suffer
any loss or incur any expenses for which it is entitled to be indemnified
pursuant to this Agreement, upon the final determination of the liability of
Introducing Firm for such claim, loss or expense, Daiwa shall have the right to
deduct the amount of such claim, loss or expense from any amounts owed to
Introducing Firm hereunder. If the amount owed to Introducing Firm hereunder is
less than the amount of such claim, loss or expense, Daiwa shall have the right
to withdraw from the Collateral Account cash and/or securities having a market
value equal to the amount of such deficiency. Introducing Firm shall then be
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obligated to deposit immediately in the Collateral Account cash and/or
securities sufficient to bring the Collateral Account back to a market value of
at least the Collateral Amount.
15. Within thirty (30) days of the termination of this Agreement, Daiwa
will (a) effect the payment and delivery to Introducing Firm of the funds and/or
securities in the Collateral Account, less any amounts Daiwa is entitled to
withdraw under the preceding paragraph; provided, however, that Daiwa may retain
in the Collateral Account such amount as it reasonably deems appropriate for its
protection from any claim or proceeding of any type then threatened or pending,
until the final determination thereof is made, and (b) deliver or cause to be
delivered to Introducing Firm (without the reproduction or other copying
thereof) all documents and other materials, including customer lists, prepared
in connection with this Agreement or the business of Introducing Firm, except
for such documents and other materials as Daiwa may have destroyed in the normal
course of its business or may be required to keep for regulatory purposes or
otherwise as may be required by law. In any event, Daiwa agrees that no such
documents or other materials will be distributed by it to any person or group in
or outside Daiwa that does not have responsibility for the administration, legal
or audit review of this Agreement or transactions thereunder. Daiwa further
acknowledges and agrees that Introducing Firm may, in developing its business,
contact persons or entities that may be customers of Daiwa and that in doing so
they will not be in violation of this or any other agreement between Daiwa and
Introducing Firm.
16. This Agreement shall be binding upon and inure to the benefit of each
party hereto and its successors and assigns; provided, however, that Introducing
Firm may not assign its rights and/or obligations hereunder without the prior
written consent of Daiwa. No express or implied waiver of any default shall
constitute a waiver of any other default, and no exercise of any right or remedy
hereunder by either party shall constitute a waiver of its right to exercise any
other right or remedy hereunder. No modification or waiver of any provision of
this Agreement and no consent by either party to a departure herefrom shall be
effective unless in writing and executed by both parties hereto (or in the case
of a waiver or consent, by the party granting the same).
17. THIS AGREEMENT SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO CHOICE OF LAW
PRINCIPLES.
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18. Each party agrees that any claim, dispute, grievance or controversy
arising under this Agreement or any transactions executed or arising therefrom
or thereunder shall be settled by arbitration pursuant to and in accordance with
Article XI of the NYSE Constitution and the NYSE Arbitration Rules. Each party
further agrees to service of process in any arbitration proceeding by mailing of
copies thereof (by registered or certified mail, if practicable) postage
prepaid, or by telex, to it at an address for notices under this Agreement; and
agrees that nothing herein shall affect the other party's right to effect
service of process in any other manner permitted by NYSE Arbitration Rules, and
that each party shall have the right to bring a proceeding for enforcement of a
judgment entered by any arbitration panel against the other party in any court
or jurisdiction in accordance with applicable law.
19. (a) This Agreement supersedes all other agreements between the parties
with respect to the transactions contemplated herein.
(b) This Agreement shall not be binding upon Daiwa until signed by a
duly authorized officer of Daiwa and may not be amended except in writing signed
by Introducing Firm and Daiwa's duly authorized officer.
(c) This Agreement may be terminated by either party upon thirty (30)
days' written notice given to the other party at any time, or written notice
following an Event of Default which event shall occur if (i) either party shall
fail to perform or observe any term, covenant or condition to be performed or
observed by it hereunder and such failure shall continue to be unremedied for a
period of 30 days after written notice from the non-defaulting party to the
defaulting party specifying the failure and demanding that the same be remedied;
or (ii) any representation or warranty made by either party shall prove to be
incorrect at any time in any material respect; or (iii) a receiver, liquidator
or trustee of either party, or of any property held by either party, is
appointed by court order and such order remains in effect for more than 30 days;
or either party is adjudicated bankrupt or insolvent; or any of its property is
sequestered by court order and such order remains in effect for more than 30
days; or a petition is filed against either party under the bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in effect, and is
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not dismissed within 30 days after such filing; or (iv) either party makes an
assignment for the benefit of its creditors, or admits in writing its inability
to pay its debts generally as they become due, or consents to the appointment of
a receiver, trustee or liquidator of either party, or of any property held by
either party.
Upon the occurrence of any such Event of Default, the non-defaulting
party may, at its option, by written notice to the defaulting party declare that
this Agreement shall be thereby terminated and such termination shall be
effective as of the date such notice has been received by the defaulting party.
Notice sent to the address provided for by this Agreement shall be assumed to
have been received three days after mailing or, if communicated by hand or by
fax, on the day sent.
20. Written notices shall be properly made if hand delivered, mailed
(registered mail) or telecopied ("faxed") to the party entitled to receive such
notices at the following address or telephone number:
To: Introducing Firm
Euro Brokers, Maxcor Inc.
0 Xxxxx Xxxxx Xxxxxx - Xxxxx 0000
Xxx Xxxx, X.X. 10048-0697
Tel. No: 000-000-0000
Fax No.: 000-000-0000
Attn.: Xxxxx X. Xxxx, V.P. and Controller
To: Daiwa
Daiwa Securities America Inc.
One World Financial Center
000 Xxxxxxx Xxxxxx, Xxxxx X
Xxx Xxxx, Xxx Xxxx 00000
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
Attn.: Managing Director
Correspondent Services
21. (a) There will be no Accounts opened on behalf of employees or officers
of New York Stock Exchange member organizations, self-regulatory organizations
and other financial institutions without the prior written consent of Daiwa.
(b) There will be no margin under the Agreement. Daiwa is extending no
credit pursuant to the Agreement. The
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provisions of Regulation T will be complied with, as applicable. In the event
that credit is extended to Introducing Firm and there is a
rehypothecation/lending of securities under the Agreement, such activity will
not contravene the provisions of Rule 8c-1 of the Securities Exchange Act of
1934.
(c) Any and all telephone conversations in connection with transactions
under the Agreement may be electronically recorded and may be utilized to
resolve any uncertainty or any dispute arising in connection with this Agreement
or any transaction hereunder.
(d) Each party acknowledges that the payment of dividends, and the
handling of exchange/tender offers, rights and warrants and redemptions are not
applicable to this Agreement.
Please indicate your agreement with the foregoing by signing and
returning the enclosed copy of this letter.
Very truly yours,
DAIWA SECURITIES AMERICA INC.
ACCEPTED AND AGREED TO AS OF
THE DATE FIRST SET FORTH ABOVE:
EURO BROKER, MAXCOR INC.
By:/s/ Xxxxx X. Xxxx
-----------------------
Name:Xxxxx X. Xxxx
---------------------
Title:V.P. and Controller
---------------------
ACCEPTED AND AGREED TO:
DAIWA SECURITIES AMERICA INC.
BY:/s/ Xxxxxx X. Xxxxxx
-----------------------
Name:Xxxxxx X. Xxxxxx
---------------------
Title:Executive V.P. and Senior Managing Director
--------------------------------------------
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EXHIBIT A
---------
Schedule of Specified Securities
--------------------------------
For purposes of the Agreement date June 7, 1993 concerning certain
clearing services to be performed by Daiwa Securities America Inc. for Euro
Brokers Maxcor Inc. ("Introducing Firm") with respect to transactions with
customers of Introducing Firm, the term Specified Securities shall be limited to
the following:
1. Securitized Adjustable Rate Mortgages
2. Asset-backed Securities bearing a credit rating
of AA or better
3. Collateralized Mortgage Obligations bearing a
credit rating of AA or better
4. GNMA, FNMA and Xxxxxxx Mac Securities ("Interest
Only/Principal Only" portions of these securities)
5. U.S. Government and Agency Securities
6. Sovereign Debt - Euroclear/CEDEL Eligible
7. Euro Bonds
8. Municipal Securities
EXHIBIT B
---------
Exhibit B has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.
EXHIBIT C
---------
Daiwa Letterhead
_____, 19____
[Customer Name and Address]
Re: Euro Brokers Maxcor Inc.
Allocation of Brokerage Account Responsibilities
------------------------------------------------
Gentlemen:
As you know, your account has been introduced to Daiwa Securities
America Inc. ("Daiwa") by your brokerage firm Euro Brokers, Maxcor Inc. ("Euro
Brokers") for the purpose of Daiwa clearing trades in certain specified
securities ("Specified Securities") listed in the attached Additional Clearing
Services Terms and Conditions ("Additional Terms").
This letter and the Additional Terms are to inform you, and obtain
your agreement to, certain terms upon which Daiwa shall clear your trades
through principal transactions directed by Euro Brokers, and the allocation of
responsibilities between Euro Brokers and Daiwa.
In establishing this relationship, providing trading advice and
initiating trades for your account, Euro Brokers is acting solely on your behalf
and not on behalf of, or as agent of, Daiwa. Euro Brokers shall remain
responsible for the ongoing relationship that it has with you, and Daiwa shall
be responsible only for trade clearing related functions, each as set forth
below.
Euro Brokers shall at all times be exclusively responsible for:
- Learning your investment objectives and opening, approving and
monitoring your account.
- Reviewing your account and all orders in it and supervising all
investment advice, when given.
- Accepting or rejecting your orders, errors in initiating and
transmitting orders, and screening orders prior to execution.
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- Transmitting instructions concerning your account to Daiwa,
including instructing Daiwa as to the prices at which Daiwa will
act as principal to execute orders for your account.
- Ensuring that all the transactions conducted in your account are
in compliance with all applicable law and rules.
- Responding to any inquiries or complaints you may make concerning
your account.
Additionally, Euro Brokers is responsible to Daiwa for supplying all
documentation required by Daiwa notwithstanding the fact that Daiwa has at all
times the right to contact you directly regarding its information requirements.
Daiwa has at all times the right, exercisable in its sole discretion, to refuse
to accept orders for your account.
Daiwa will be responsible for the following areas:
- Executing as principal transactions in your account pursuant to
Euro Brokers' instruction.
- Maintaining books and records, documentation,
compiling and filing regulatory reports.
- Delivering and receiving funds and securities to or from your
account, transfers of securities, payment of dividends or
interest and the handling of exchange or tender offers, rights,
warrants and redemptions in accordance with the last instructions
received either from you or Euro Brokers.
- Safeguarding funds and securities.
- Preparing and transmitting confirmations and
statements.
Any questions you may have concerning the conduct of your account
should be addressed directly to Euro Brokers.
You and Daiwa agree that any and all telephone conversations between
us with respect to the contemplated transactions may be tape recorded and we
each authorize the other to do so, and we each hereby waive further notice.
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THE ATTACHED ADDITIONAL TERMS SET FORTH ADDITIONAL INFORMATION,
PROCEDURES AND LIMITATIONS APPLICABLE TO TRANSACTIONS IN YOUR ACCOUNT. PLEASE
READ IT CAREFULLY. BY SIGNING AND REDELIVERING THIS LETTER YOU AGREE TO BE BOUND
BY THE TERMS OF THIS LETTER AND ADDITIONAL TERMS.
Please sign and deliver to Daiwa (Attention: Xxxxxx X. Xxxxxx, Managing
Director) the enclosed copy of this letter. Upon Daiwa's receipt of the signed
copy, this letter agreement and the terms and procedures described in the
Additional Terms shall remain in effect until terminated in writing by either of
us. All transactions entered into before notice of termination is received shall
be handled in accordance with this letter agreement.
Very truly yours,
By:______________________________
DAIWA SECURITIES AMERICA INC.
Xxxxxx X. Xxxxxx
ACKNOWLEDGED AND AGREED:
By:__________________________
Name:________________________
Title:_______________________
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Additional Clearing Services Terms and Conditions
-------------------------------------------------
The following additional terms, procedures and limitations are
applicable to trades of Specified Securities (as defined below) which will be
initiated by Euro Brokers Maxcor Inc. ("Euro Brokers"), and in which Daiwa
Securities America Inc. ("Daiwa") will act as principal in order to clear and
settle your trades.
Euro Brokers will be initiating trades for your account in which Daiwa
will buy from or sell to you a Specified Security which Euro Brokers has also
arranged for Daiwa to sell to or purchase from another party. Daiwa will act as
a principal in each of these back-to-back transactions which will generate
revenue in an amount depending upon the relative prices at which the
back-to-back trades are executed. These prices are determined solely by Euro
Brokers, which shall retain the resulting revenue less the amount of Daiwa's
clearing fee. Daiwa shall not initiate these trades nor shall it determine their
prices, and Daiwa shall have no responsibility to you for investigating,
screening or approving trades or their prices.
Authorized employees of Euro Brokers may, by telephone, directly
contact your trading desk to initiate transactions between you and Daiwa.
However, such employees of Euro Brokers will not be acting as agent for Daiwa
and no proposed transaction will be deemed approved or confirmed by Daiwa and no
such transaction will be consummated by Daiwa until your trading desk compares
the transaction by telephone with Daiwa's authorized personnel and Daiwa
directly confirms by telephone the transaction. Daiwa agrees that once a
transaction has been so confirmed, Daiwa is thereafter acting as principal in
the trade. You agree that you will always act as principal on the other side of
the trade. All your customary documentation for trades in which you act as
principal, regardless of how initiated, should be sent directly to Daiwa and
Daiwa will send you its usual documentation.
Specified Securities shall mean: Securitized Adjustable Rate Mortgages;
Asset-backed Securities bearing a credit rating of AA or better; Collateralized
Mortgage Obligations bearing a credit rating of AA or better; GNMA, FNMA and
Xxxxxxx Mac Securities ("Interest Only/Principal Only" portions of these
securities); U.S. Government and Agency Securities; and Sovereign Debt,
EuroClear/CEDEL eligible.
Mortgage trades should be submitted to Xxxxx Xxxx for comparison. Our
number is (000) 000-0000; FAX (000) 000-0000.
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Confirmations should be sent to: Daiwa Securities America Inc. Attn: Xxxxx Xxxx,
Xxx Xxxxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, X.X. 00000.
Government trades should be submitted to Xxx Xxxxxxxx for comparison.
Our number is (000) 000-0000; FAX (000) 000-0000. Confirmations of such trades
should be sent to: Daiwa Securities America Inc., Attn: Xxx Xxxxxxxx, Xxx Xxxxx
Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, X.X. 00000.
All other trades should be submitted to Xxxx Xxxxxxxx for comparison.
Our number is (000) 000-0000; FAX (000) 000-0000. Confirmations should be sent
to: Daiwa Securities America Inc. Attn. Xxxx Xxxxxxxx, Xxx Xxxxx Xxxxxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, X.X. 00000.
No trade will arise until Daiwa gives this confirmation and whether or
not Daiwa confirms a trade, Euro Brokers will never itself be liable as
principal in a trade or responsible for the performance of a trade.
Attached please find a complete list of all delivery instructions.
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