EXHIBIT 10.1
Co-operation Agreement
This Co-operation Agreement (hereinafter referred to as the "AGREEMENT") is made
by and between
Consors Discount-Broker AG (hereinafter referred to as "ConSors"), with its
principal place of business at Xxxxxxxxxxxxx 00, 00000 Xxxxxxxxx, Xxxxxxx
and
Web Street Securities, Inc. (hereinafter referred to as "Web Street"), with its
principal place of business at 000 Xxxx Xxxx Xxxx - 4th Floor, Deerfield, IL
6001, U.S.A.
("ConSors" and "Web Street" are also hereinafter referred to as "PARTY/PARTIES",
as the context requires)
RECITALS
WHEREAS Web Street is one of the premier On-line brokerage firms in the U.S.A.
with substantial experience and reputation and ConSors is one of the premier
On-line brokerage firms in Europe; and
WHEREAS ConSors wishes to offer its customers the facilities to trade U.S.
equities and options and Web Street has the technological and professional
skills to assist this wish; and
WHEREAS to that end, the PARTIES desire to grant each other appropriate rights
and to undertake appropriate obligations as set forth herein.
THEREFORE, in consideration of the mutual promises and covenants set forth
below, ConSors and Web Street agree as follows:
Article I - Definitions
1.1 TERRITORY
"TERRITORY" shall mean Germany, France, Switzerland, Austria, Italy,
Spain and Luxembourg.
1.2 ConSors CUSTOMER/S
"ConSors CUSTOMER/S" refers to all individuals residing in the
TERRITORY who have opened an account with Web Street.
1.3 MARGIN LOSS
"MARGIN LOSS" shall mean any and all uncollected debits of ConSors
CUSTOMERS.
1.4 Web Street MARKS
"Web Street MARKS" shall mean all intellectual property rights in the
name Web Street and variations thereof, including but not limited to
registered and unregistered Trademarks and the copyrightable
expressions therein.
1.5 Web Street MATERIALS
"Web Street MATERIALS" shall mean all forms, advertising and
promotional materials of Web Street.
1.6 EFFECTIVE DATE
"EFFECTIVE DATE" shall mean December 11, 1998.
1.7 EXPIRATION DATE
"EXPIRATION DATE" shall mean January 31, 2003.
Article II - Brokerage Arrangement
2.1 ConSors will work jointly with Web Street in establishing a unique
destination on ConSors' web site--ConSors-WebStreet.com--which will be
a co-branded site including translations into German. The site design
will be completed by ConSors, with final approval by Web Street; and
the co-branded portion of the site will be housed with Web Street
utilizing Web Street's servers.
2.2 ConSors will direct all of its customers desiring to trade U.S.
equities or options through Web Street to Web Street, and, in turn,
Web Street will notify its existing customers residing in the
TERRITORY about the XxxXxxx-XxxXxxxxx.xxx site and will inform all
prospective customers residing in the TERRITORY about the option of
opening a Web Street account via this site (e.g. by hyperlinking,
e-mail, etc.).
2.3 The PARTIES will negotiate in good faith with respect to adding other
countries to the TERRITORY.
Article III - Establishment of ConSors CUSTOMER Accounts
3.1 On or after the Effective Date, ConSors CUSTOMERS will procure and
submit to Web Street Web Street's account application (with required
signature(s)) and standard arbitration agreement and other paperwork
customarily required of Web Street customers. ConSors CUSTOMERS will
complete and submit to Web Street any other paperwork reasonably
required by Web Street including, without limitation, I.R.S. Forms W-8
and W-9 (where applicable), and other documentation which may be
incidental to the foreign national status of a Web Street customer. It
is understood that ConSors CUSTOMERS will not have trading authority
until all documentation and paperwork required as set forth above has
been satisfactorily completed and received by Web Street, in its sole
discretion. For the avoidance of doubt, the Parties hereby confirm
that the contractual relationship of ConSors CUSTOMERS trading
equities, options and/or mutual funds (and other products/services
from time to time offered by Web Street for trading) on U.S. markets
under this Agreement will only be established through Web Street.
3.2 Web Street will promptly forward to ConSors a monthly list of all
ConSors CUSTOMERS who opened a Web Street account.
Article IV - Maintenance of ConSors CUSTOMER Accounts; Commission Allocation
ConSors CUSTOMER Accounts will be maintained according to the
following procedures and protocols:
4.1 For ConSors CUSTOMERS desiring to fund their accounts by depositing
German funds directly to ConSors. ConSors will maintain an internal
account with Web Street in U.S. dollars solely for the purpose of
funding such ConSors CUSTOMER accounts. For such ConSors CUSTOMER
accounts, ConSors will notify Web Street by e-mail or fax to debit
ConSors' internal Web Street account and credit the ConSors CUSTOMER's
account.
4.2 Orders for trades made by ConSors CUSTOMERS shall be placed in any
manner available to other Web Street customers, i.e., on-line (via the
Internet) or by telephone through a Web Street trader. Orders received
outside market hours (being 9:30 a.m. to 4:00 p.m. Eastern U.S. time)
will be placed at the opening or as near the opening of the applicable
market as is practicable the next business day.
4.3 ConSors CUSTOMERS will have access to all Web Street services (subject
to any technological limitations beyond Web Street's control),
including stock quotes, research, news and portfolio management
capabilities, as well as 24 hours/day, 7 days/week telephone access to
custom service representatives (see Exhibit A for a listing of Web
Xxxxxxxx features and resources available as of the date hereof).
4.4 All charges for ConSors CUSTOMERS account activity shall be made
according to the Web Street commission schedule as in effect from time
to time. Web Street will provide reasonable advance notice to ConSors
of any changes to the commission schedule. (The commission schedule in
effect at the date hereof is attached as Exhibit B.)
4.5 All ConSors CUSTOMERS will have the benefit of the same insurance
coverage for loss due to broker-dealer or clearing corporation error
as other Web Street customers, including SIPC insurance up to an
aggregate of $500,000 ($100,000 cash and $400,000 securities).
Additional such coverage which applies to Web Street customers as of
the date hereof is set forth in the attached Exhibit C.
4.6 ConSors CUSTOMERS will have the ability to purchase options and to
purchase securities on margin according to the same terms and
conditions as other Web Street customers, subject only to Clearing
Firm requirements. The Clearing Firm will be responsible for the
extension of credit under Regulation T of the Federal Reserve and NASD
Article III, Section 30, Appendix A. All margin calls issued to
ConSors CUSTOMERS shall be met within twenty-four (24) hours.
4.7 The PARTIES hereto agree that any MARGIN LOSS shall be borne by Web
Street only.
4.8 All notices and other written materials required or permitted to be
prepared and submitted by ConSors or ConSors CUSTOMERS shall include
complete and accurate English language versions or translations, as
applicable and otherwise as required under U.S. Securities laws and
regulations. Translations of originally English language documents
into German (including the Web Street web site) shall be ***. ConSors
shall be responsible for all printing, advertising and other marketing
costs and expenses in the TERRITORY and ConSors shall be responsible
for any errors in any such translation and shall indemnify and defend
Web Street for all losses, costs, damages, etc, incurred by Web Street
and arising from any such errors.
*** This information is omitted pursuant to a confidential treatment request
filed with the SEC.
Article V - Clearing Functions
5.1 All clearing functions, including order tickets, time stamps,
confirmations and statement generation shall be conducted by the
Clearing Firm or such other clearing operation (including Web Street,
should it become self-clearing) as Web Street may in its sole
discretion designate.
5.2 Web Street will promptly forward to ConSors weekly Clearing Firm
reports relating to transactions involving ConSors CUSTOMERS.
5.3 Web Street will promptly forward all confirmations to ConSors
CUSTOMERS and will promptly forward to ConSors all monthly statements
for ConSors CUSTOMERS accounts with activity and quarterly statements
for all such accounts.
5.4 The Clearing Firm will be the "direct inquirer" for ConSors CUSTOMERS
under Rule l7f-1 (Lost and Stolen Securities) as promulgated by the
SEC under the Act.
5.5 The Clearing Firm shall be responsible for actions required in
connection with dividends, interest, redemptions, tenders, exchanges
or warrant offers for all ConSors CUSTOMER accounts.
5.6 It is understood and agreed that all transactions conducted pursuant
to this AGREEMENT will take place and be denominated in U.S. currency.
Web Street shall not have any responsibility for currency losses
incurred by ConSors or any ConSors CUSTOMER resulting from the
repatriation of funds to the Territory or for any other reason.
5.7 Other than in the case of Web Street becoming self-clearing, ConSors
waives any claim it may have against Web Street, its officers,
directors, shareholders, employees, agents, successors in interest and
legal representatives for loss or damage resulting from any Clearing
Firm errors or omissions; provided that such claim does not arise
solely by reason of the negligence of Web Street, and provided that
. Web Street agrees to devote its best efforts to resolving all issues
with the Clearing Firm (including market makers) to the satisfaction
of the ConSors CUSTOMER, and
. Web Street cooperates in any legal action taken by ConSors CUSTOMERS
against the Clearing Firm resulting from any clearing company errors
or omissions, and
. Web Street assigns all claims it may have against the clearing company
for such errors and omissions to the ConSors CUSTOMERS affected by the
error or omission.
Article VI - Responsibilities of the PARTIES
6.1 ConSors will forward to Web Street all completed new account
documentation (including new account agreements, margin agreements,
option agreements, and Forms W-8 and W-9 (where applicable) which have
been submitted to ConSors or ConSors CUSTOMERS.
6.2 ConSors will provide Web Street copies of any complaints received by
ConSors that relate to the Clearing Firm or Web Street within
twenty-four hours after receipt.
6.3 Web Street will answer or seek diligently to obtain answers and to
comply with ConSors CUSTOMER complaints related to the Clearing Firm
or Web Street.
6.4 ConSors will furnish its customers with the required prospectus, when
applicable, including supplements, amendments, option prospectus and
disclosure documents, and when making sales of underwriting securities
shall comply with all NASD rules.
6.5 Web Street acknowledges and agrees that ConSors will have no
responsibility for any customer losses and damages attributable to Web
Street system failures or outages. ConSors will notify Web Street
promptly of claims against ConSors arising out of such system failures
or outages and Web Street will indemnify ConSors against any payments
required to be made to the claimant and all liabilities, costs and
expenses incurred by ConSors in the course of the defense and
settlement of such claim.
ARTICLE VII - Remuneration
7.1 For the obligations of ConSors as set forth herein, ConSors shall
receive a remuneration in the amount as agreed upon in the attached
Exhibit D.
ARTICLE VIII - Marketing
Web Street hereby grants a royalty-free license to ConSors to use, reproduces
and display the Web Street MARKS, as follows:
8.1 The grant of license shall be co-terminous with the term of this
AGREEMENT.
8.2 The grant of license shall be non-exclusive regarding the use of the
Web Street MARKS by Web Street in the TERRITORY. No use of the Web
Street MARKS in the TERRITORY by other licensees than ConSors is
contemplated or agreed to. ConSors agrees not to use the Web Street
MARKS outside the TERRITORY. The possibility to access ConSors' web
site or the co-branded web site--ConSors-WebStreet.com--outside the
TERRITORY shall not be considered as a use of the Web Street MARKS by
ConSors outside the TERRITORY.
8.3 Included in the grant of license herein is the right to use Web Street
MATERIALS in the TERRITORY.
8.4 ConSors will provide and be responsible for all translations into
German (or any other language indigenous to a country or part thereof
within the TERRITORY) of Web Street MATERIALS. ConSors will provide
Web Street with copies of all Web Street MATERIALS used by ConSors;
and ConSors will obtain Web Street's advance written approval of
ConSors' uses of any Web Street Xxxx and/or Web Street MATERIALS.
ConSors shall indemnify Web Street for any liability, claims,
obligations, suits, causes of actions, and expenses, including but not
limited to reasonable legal fees, arising directly or indirectly from
or in connection with errors in translations of Web Street MATERIALS.
Vice versa Web Street shall indemnify ConSors for any liability,
claims, obligations, suits, causes of actions, and the like brought
forward against ConSors, same as expenses, including but not limited
to reasonable legal fees, arising directly or indirectly from or in
connection with the use of any Web Street XXXX and or Web Street
MATERIALS in the Territory.
Article IX - Governing Law and Arbitration
9.1 The AGREEMENT shall be governed by and construed in accordance with
the laws of Switzerland.
9.2 Whenever a controversy should arise between the PARTIES arising out of
or relating to the AGREEMENT, including but not limited to the
conclusion, construction, application, interpretation or termination
of the AGREEMENT and the rights and obligations of the PARTIES
deriving therefrom, the PARTIES shall apply their best endeavors to
settle such controversy in an amicable manner.
9.3 In the event the PARTIES should be unable to reach a mutual
understanding on any controversy within a period of 60 (sixty) days
from the date of written invitation by either PARTY to enter into
discussions on a particular issue, the PARTIES agree that any dispute
arising out of or in connection with this AGREEMENT, including any
question regarding its existence, validity or termination, shall be
referred to and finally resolved by arbitration under the London Court
of International Arbitration Rules, which Rules are deemed to be
incorporated by reference into this clause. The number of arbitrators
shall be one or three as reasonably determined by the London Court of
International Arbitration. The seat, or legal place, of arbitration
shall be London, England. The language to be used in the arbitral
proceedings shall be English. With respect to the provisions of
Sections 10.2 and 10.3, the 60 (sixty) days provided for in this
Section 9.3 above may be bypassed in the event of the assertion by
either party of a "substantial breach" or "exceptional circumstances",
but the arbitration procedure itself may not be avoided by virtue of
such an assertion. Each PARTY shall, in any event, have a reasonable
period of time within which to cure any violation or alleged violation
of this AGREEMENT after receiving notice thereof from the other PARTY.
Article X - Term and Termination
10.1 The AGREEMENT shall become effective on the EFFECTIVE DATE and shall
continue in full force and effect until the EXPIRATION DATE unless
terminated as specified below. It is understood and agreed that the
AGREEMENT shall expire automatically on this EXPIRATION DATE.
10.2 Subject to the terms of Section 9.3 hereof, each PARTY may terminate
the AGREEMENT with immediate effect, by notice given in writing by
means of communications ensuring evidence and date of receipt (e.g.
registered mail with return receipt, special courier), in case of a
substantial breach by the other PARTY of the obligations arising out
of the AGREEMENT, or in case of exceptional circumstances justifying
the termination. The PARTIES each covenant and agree that any
assertion of "substantial breach" or "exceptional circumstances" will
be made only after diligent review of the circumstances involved, and
in good faith.
10.3 Any failure by a PARTY to carry out all or part of its obligations
under the AGREEMENT resulting in such detriment to the other PARTY as
to substantially deprive such other PARTY of what it is entitled to
expect under the AGREEMENT, shall be considered as a substantial
breach for the purpose of Article 10.2, above. Circumstances in which
it would be unreasonable to require the terminating PARTY to continue
to be bound by the AGREEMENT shall be considered as exceptional
circumstances for the purpose of Article 10.2, above.
10.4 Furthermore, the PARTIES agree that the following situations, in
particular but not limited hereto, shall be considered as exceptional
circumstances that justify the termination by the other PARTY as set
forth in Article 10.2 above: bankruptcy, moratorium, receivership, or
liquidation that is not stayed by order of court within 60 (sixty)
days.
Article XI - Effect of Expiration or Termination
11.1 In the event of expiration or termination of the AGREEMENT in
accordance with Article X, the PARTIES will assist each other and the
Clearing Firm in making an orderly transition. The PARTIES shall pay
all amounts owed to the other or to the Clearing Firm.
11.2 The expiration or termination of the AGREEMENT shall not affect Web
Street's ongoing obligation to pay the consideration as agreed upon
herein and in Exhibit D for ConSors CUSTOMERS who open a Web Street
account during the term of the AGREEMENT as long as, and for as long
as, ConSors continues to provide customer service to such CUSTOMERS at
a level equivalent to that which is provided during the term of this
AGREEMENT.
11.3 Promptly following expiration or termination of the AGREEMENT the
PARTIES shall cease and thereafter refrain from using the internet
domains XxxXxxx-XxxXxxxxx.xxx, Xxxxxxxxx-Xxxxxxx.xxx,
Xxxxxxxxx-Xxxxxxx.xx and XxxXxxx-Xxxxxxxxx.xx.
Article XII - Miscellaneous
12.1 Binding Effect: This AGREEMENT shall be binding upon and inure to the
benefit of the PARTIES hereto, their legal representatives, successors
in interest and permitted assigns.
12.2 Assignment: Because of the personal nature of the performance
hereunder, the PARTIES agree that the rights, obligations, and
performances required hereunder shall not be transferred or assigned
without the express written consent of the PARTIES hereto.
12.3 Notices: All notices required or permitted under this AGREEMENT shall
be in writing and personally delivered or sent by facsimile
transmission as follows:
If to Web Street at: c/o Xxxxxx X. Xxxx
Web Street Securities, Inc.
000 Xxxx Xxxx Xxxx - 0xx Xxxxx
Xxxxxxxxx, XX 00000
Facsimile (000) 000-0000
If to ConSors at: c/o Xxxxx Xxxxx
ConSors
Xxxxxxxxxxxxx 00
00000 Xxxxxxxx
Xxxxxxx
Facsimile: (00 00) 00 00 000
or such other address as either PARTY may from time to time designate
to the other by notice duly given.
12.4 Survival: The provisions of the AGREEMENT which by their sense and
context are meant to survive expiration or termination of the
AGREEMENT, including without limitation Articles 4.7, 4.8, 5.2, 5.7,
6.3, 6.5, 7.1, 8.4, 11.2 and 11.3 and this provision shall so survive.
12.5 Entire AGREEMENT; Amendment: This AGREEMENT contains the entire
understanding of the PARTIES, and supercedes any prior agreements or
understandings, with respect to the transactions contemplated by this
AGREEMENT. This AGREEMENT may be amended only with the express written
consent of the PARTIES hereto. This shall equally apply to any change
or amendment of this provision.
12.6 Partial Invalidity. In the event any part or parts of this AGREEMENT
are found to be invalid, illegal or unenforceable in any respect, it
is the intent of the PARTIES that a court so finding shall revise or
modify the provisions hereof found to be invalid, illegal or
unenforceable, and the remaining provisions hereof shall nevertheless
be valid and binding with the same force and effect as if the invalid,
illegal or unenforceable part or parts were originally deleted.
12.7 Waivers. Any term or provision of this AGREEMENT may be waived, or the
time for its performance may be extended, by the PARTY or PARTIES
entitled to the benefit thereof. The failure of any PARTY hereto to
enforce at any time any provision of this AGREEMENT shall not be
construed to be a waiver of such
provision, nor in any way to affect the validity of this AGREEMENT or
any part hereof or the right of any PARTY thereafter to enforce each
and every such provision. No waiver of any breach of this AGREEMENT
shall be held to constitute a waiver of any other or subsequent
breach.
12.8 Expenses: Each PARTY hereto will pay all of its own costs and expenses
incident to its negotiation and preparation of this AGREEMENT and to
its performance and compliance with all agreements and conditions
contained herein on its part to be performed or complied with,
including the fees, expenses and disbursements of its counsel and
accountants.
12.9 Multiple Counterparts: This AGREEMENT may be signed in two or more
counterparts, each of which shall be deemed an original hereof, and
all of which taken together shall be considered one and the same
instrument.
12.10 NO Authority to Bind: Neither Web Street nor ConSors shall have the
authority to bind the other, other than as expressly provided for
herein.
If the foregoing accurately reflects the agreement and understanding
of the PARTIES, please so indicate by signing below.
Nuremberg, 01/17/2000 Deerfield, IL,______________
------------------------------ For Web Street Securities, Inc.
For ConSors Discount-Broker AG
/s/ Xxxxx Xxxxx /s/ Xxxxxx X. Xxx
------------------------------ ------------------------------
Xxxxx Xxxxx Name: Xxxxxx X. Xxx
Managing Director Position: President
EXHIBIT A
Web Street Securities, Inc.
Features
|_|A real-time trading pit to monitor stocks, options and mutual funds and check
balances and positions;
|_|
|_|Instantaneous (6 - 10 seconds) executions on most market orders;
|_|
|_|Online "pop-up" and mailed confirmations;
|_|
|_|Flat $14.95 per online trade;
|_|
|_|Free online trades of 1,000 or more NASDAQ shares of more than $2 per share;
|_|
|_|Free (not real-time) monitoring of 10 separate Watchlists of up to 10
positions each;
|_|
|_|FREE Baseline company profiles that include company histories, market trends
and individual stock movements;
|_|
|_|FREE Real Time balances and positions; and
|_|
|_|Optional Live Self Updating Real Time Quotes.
EXHIBIT B
WEB STREET SECURITIES, Inc.
Commission Schedule
--------------------------------------------------------------------------------
TRADES EXECUTED VIA THE INTERNET
--------------------------------------------------------------------------------
Any listed stock trade, any size $14.95
--------------------------------------------------------------------------------
NASDAQ Stock Trade under 1,000 shares $14.95
--------------------------------------------------------------------------------
NASDAQ Stock Trades 1,000 shares or more* FREE
--------------------------------------------------------------------------------
Equity and Index Options $14.95 plus
$1.75 per contact
--------------------------------------------------------------------------------
Mutual Funds Transaction $25.00
--------------------------------------------------------------------------------
*On stocks trading over $2.00 per share. For stocks trading $2.00 and under per
share, $14.95.
--------------------------------------------------------------------------------
TRADES EXECUTED VIA A LIVE REPRESENTATIVE
--------------------------------------------------------------------------------
Any listed stock trade, any size $24.95
--------------------------------------------------------------------------------
NASDAQ Stock Trade under 1,000 shares ** $24.95
--------------------------------------------------------------------------------
NASDAQ Stock Trades 1,000 shares** or more $24.95
--------------------------------------------------------------------------------
Equity and Index Options $24.95 plus
$1.75 per contract
--------------------------------------------------------------------------------
Mutual Funds Transaction $25.00
--------------------------------------------------------------------------------
Bonds - government, municipals, corporate Contact a Web Street
Account Executive
for pricing
--------------------------------------------------------------------------------
**On stocks trading over $2.00 per share. For stocks trading $2.00 and under per
share, $24.95 plus one cent per share.
--------------------------------------------------------------------------------
MARGIN RATES
--------------------------------------------------------------------------------
0 - 4,999 2% above broker call
--------------------------------------------------------------------------------
5,000 - 9,999 1 3/4% above broker
call
--------------------------------------------------------------------------------
10,000 - 14,999 1 1/2% above broker
call
--------------------------------------------------------------------------------
15,000 - 19,999 1 1/4% above broker
call
--------------------------------------------------------------------------------
20,000 - 24,999 1% above broker call
--------------------------------------------------------------------------------
25,000 and higher 3/4% above broker
call*
--------------------------------------------------------------------------------
Broker call as quoted in Wall Street Journal
--------------------------------------------------------------------------------
*over $100,000 rate is negotiable
CURRENT AS OF 1.12.00 - SUBJECT TO CHANGE
EXHIBIT C
Web Street Securities, Inc.
Insurance Coverage
Web Street is a member of SIPC (Securities Investor's Protection
Corporation). SIPC insures the first $500,000 of each customer account ($100,000
cash; $400,000 securities). Individual accounts are additionally protected by
Web Street Securities, currently through coverage provided by Asset Guaranty
Corporation, up to $99.5 million.
EXHIBIT D
WEB Street Securities, Inc.
Ticket Charges - Web Street currently pays to U.S. Clearing a charge of US $8.50
for the clearing of any size equity transaction. This includes both market and
limit orders. Web Street currently pays to U.S. Clearing a charge of US $8.50
plus an additional US $1.25 contract for all options transactions.
Transaction Revenues - Web Street charges US $14.95 commission on all equity
transactions. Web Street charges no commission on NASDAQ trades of 1,000 or more
if the stock is priced over US $2.00. Both market and limit orders. Web Street
charges US $14.95 plus US $1.75 per contract on option trades.
Order Flow Rebates - Web Street currently receives the following rebates on
NASDAQ stock trades (which rebates may from time to time change as a result of
market conditions):
US $0.25 per share on NASDAQ stock priced over US $2.00. US $.01 per share
on NASDAQ stock priced US $1.01 to US $2.00.
Consideration - ConSors will receive a consideration for the performance of the
obligation of this AGREEMENT in the amount of *** of the sum consisting of both:
Total Transaction Revenues plus then applicable Order Flow Rebates less
Ticket Charges;
and
Net interest income earned on all Web Street-ConSors accounts from margin
balances as well as free credit balances, and net interest income earned on
money market account balances.
The consideration shall be paid to an account identified by ConSors, no later
than the 15th calendar day following the close of the "trading month." The
"trading month" ends on the Tuesday preceding the last Friday of each calendar
month.
*** This information is omitted pursuant to a confidential treatment request
filed with the SEC.
