EXHIBIT 10.12
ABC BROKERAGE ACCOUNTING SYSTEM AGREEMENT
BETWEEN
PERSHING DIVISION OF XXXXXXXXX,
LUFKIN & XXXXXXXX SECURITIES CORPORATION
AND
XXXXX XXXXXXXXX, INC.
DATED: APRIL 1, 1997
CONTENTS
1. THE SYSTEM............................................................ 1
1.1 The System....................................................... 1
2. SOFTWARE AND SYSTEM DOCUMENTATION..................................... 1
2.1 Software and System Documentation Provided by ABC................ 1
2.2 License.......................................................... 1
2.3 Title to Software and System Documentation....................... 2
2.4 Modifications.................................................... 2
2.5 Additional Software.............................................. 3
2.6 Indemnity........................................................ 3
2.7 Confidentiality.................................................. 3
2.8 Care and Possession of System.................................... 3
3. SOFTWARE INSTALLATION (Not Applicable)................................ 4
3.1 Required Hardware................................................ 4
3.2 Software Installation............................................ 4
4. CONVERSION (Not Applicable)........................................... 4
4.1 Conversion....................................................... 4
5. PRICE, PAYMENT AND COSTS.............................................. 5
5.1 Price............................................................ 5
5.2 Taxes............................................................ 5
5.3 Payment.......................................................... 5
5.4 System Operators................................................. 5
5.5 Travel Costs..................................................... 6
5.6 Supplies......................................................... 6
6. TERM AND TERMINATION.................................................. 6
6.1 Term............................................................. 6
6.2 Termination by Customer.......................................... 6
6.3 Surviving Obligations............................................ 6
7. ABC SUPPORT........................................................... 7
7.1 Support Services................................................. 7
7.2 Enhancements..................................................... 7
7.3 Regulatory Compliance............................................ 7
7.4 Limitation....................................................... 8
7.5 Cessation of Support............................................. 8
8. WARRANTIES AND LIMITATIONS OF LIABILITY............................... 8
8.1 Ownership........................................................ 8
8.2 Express Warranty................................................. 8
8.3 Warranty Disclaimer.............................................. 9
8.4 Limitation of Liability.......................................... 9
9. GENERAL............................................................... 9
9.1 Entire Agreement................................................. 9
9.2 Assignment....................................................... 9
9.3 Enforceability................................................... 10
9.4 Notices.......................................................... 10
9.5 Use of Name...................................................... 10
9.6 New York Law..................................................... 10
9.7 Arbitration...................................................... 10
9.8 Headings......................................................... 10
9.9 Authority to Sign................................................ 10
9.10 Delays........................................................... 11
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TABLE OF SCHEDULES
SCHEDULE DESCRIPTION
-------- -----------
A ABC Brokerage Accounting System Modules
B IBM AS/400 Processing System (Not Applicable)
C Price and Payment Schedule
D Form for Perpetual Software License Agreement
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ABC BROKERAGE SYSTEM AGREEMENT
AGREEMENT made this 1st day of April, 1997, between Pershing Division of
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation ("ABC"), with its principal
place of business at Xxx Xxxxxxxx Xxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000 and Xxxxx
XxxXxxxxx, Inc. ("Customer") with its principal place of business at 000 Xxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000.
1. THE SYSTEM
1.1 THE SYSTEM
ABC agrees to provide to Customer and maintain the Software and System
Documentation as set forth in Schedule A (collectively known as the "System").
2. SOFTWARE AND SYSTEM DOCUMENTATION
2.1 SOFTWARE AND SYSTEM DOCUMENTATION PROVIDED BY ABC
A. "Software" collectively refers to all of the modules listed in
Schedule "A," any custom modifications provided under 2.4(A) below, all
enhancements and options provided under 7.2 below, and all other computer
programs and related material given or disclosed by ABC to Customer in relation
to this Agreement.
B. ABC shall provide the Software to Customer in object code form only.
C. Customer agrees to install, or reasonably attempt to install, the IBM
Operating System/400 compatible with the Hardware provided by Customer under
this Agreement.
D. ABC shall provide Customer with user documentation for the Software
(the "System Documentation").
2.2 LICENSE
A. In accordance with the terms herein, ABC grants to Customer, and
Customer accepts from ABC, a non-exclusive, non-transferable license to use the
Software and System Documentation during the term of Agreement ("the License").
B. Customer shall use the software only on the Customer Hardware on which
it has been installed by ABC. Customer shall not alter or modify the ABC
software, data bases, data files or job flows or any other aspect thereof.
Customer shall not make the Software System Documentation, or any translation,
description, adaptation, modification, revision, copy or partial copy thereof,
in whole or part, available to any other person or entity (e.g. by sale,
transfer, publication, disclosure, display, licensure or otherwise). Customer
shall use the System for its internal use only, and shall in no event offer
brokerage accounting services to third parties, offer access to the system to
third parties on a time-sharing basis, or otherwise use the system in connection
with offering service as a computer service bureau. Notwithstanding the
foregoing, Customer is allowed to use the System to provide services to its
correspondents to whom it provides clearing and execution services.
2.3 TITLE TO SOFTWARE AND SYSTEM DOCUMENTATION
All software and documentation provided to Customer by ABC, including the
Software and the System Documentation, together with all modifications,
revisions, changes, copies, and partial copies thereof, are proprietary to ABC
and title thereto remains in ABC. All applicable rights to patents, copyrights,
trademarks and trade secrets in said materials are and shall remain in ABC. All
copies made by Customer of the Software, System Documentation, and all other
documentation and programs disclosed, used or developed hereunder, including
translations, compilations, partial copies with modifications and updated works,
are and shall remain the sole property of ABC. Customer agrees to reproduce and
incorporate all trade secret, copyright and other proprietary notices, which are
contained in the Software and System Documentation provided by ABC, in all
copies, partial copies or modifications thereof.
2.4 MODIFICATIONS
A. Customer may request ABC to make custom modifications to the Software.
ABC has the right to accept or reject any such request for modifications. If
ABC decides to develop a requested modification, it shall do so as mutually
agreed.
B. Customer may also add its own custom software to the ABC Software. ABC
shall provide file descriptions and advice (on a time and materials basis) to
Customer to effect any custom modifications. Customer software will not be
maintained by ABC. ABC does not represent or warrant that any subsequent
enhancements or other Software changes made by ABC will be compatible with any
Customer software.
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2.5 ADDITIONAL SOFTWARE
Customer may use any excess processing capacity available on the Hardware
for information processing other than that set forth in Schedule "A." In the
event the Customer uses the Hardware processing capacity for Customer
applications other than as set forth in Schedule "A," ABC shall not be
responsible for any degradation in System processing determined by ABC to result
from such additional use.
2.6 INDEMNITY
ABC shall defend and hold customer harmless from any action, expenses,
claims, demands, liabilities or costs including, without limitation, attorney
fees, judgments, punitive, exemplary damages and amounts paid in settlement with
respect to any threatened or pending action brought against Customer to the
extent that it is based on a claim that any Software or System Documentation
used within the scope of this Agreement infringes on any patents, copyrights,
license or other property right, provided that ABC is immediately notified in
writing of such claim. ABC shall not be responsible for any compromise or
settlement made without its consent.
2.7 CONFIDENTIALITY
A. Customer acknowledges that the Software, System Documentation and all
copies thereof constitute valuable trade secrets and other confidential
information belonging to ABC (the "Confidential Materials"). Customer agrees to:
(1) limit access to the Confidential Materials to its employees and ABC approved
agents (such approval shall not be unreasonably withheld) who are fully
instructed as to the confidentiality requirements for such materials and whose
access to same is necessary for Customer's authorized internal use of the
System; (2) promptly notify ABC of any known circumstances suggesting possible
unauthorized possession, use or knowledge of any confidential materials by third
parties or employees; and (3) safeguard the confidentiality of all the Software
and System Documentation with the same degree of care as it uses to safeguard
the confidentiality of its own most valuable and confidential business data.
2.8 CARE AND POSSESSION OF SYSTEM
Customer shall not in any manner part with, or surrender the possession of,
any of the Software, System Documentation or other materials provided by ABC
hereunder, nor allow same to be removed from Customer's possession or from its
place of business, nor permit same to be used by anyone except Customer, and its
properly authorized employees and agents. Customer shall take any and all
reasonable precautions to protect the Software and System Documentation from
damage or loss.
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Customer shall keep the Software and System Documentation free
and clear of all levies, liens, charges, encumbrances and claims.
3. SOFTWARE INSTALLATION (NOT APPLICABLE)
3.1 REQUIRED HARDWARE
A. Prior to Software installation, Customer shall have installed on its
premises and at Customer's cost an IBM AS/400 processing system. The equipment
configuration required for proper operation of the Software pursuant to this
Agreement (the "Hardware") is described in Schedule "B."
B. ABC shall not be responsible for any degradation in System processing
determined by ABC to result from Customer's addition to the Hardware, as set
forth in Schedule "B," of communications facilities, terminals, printers and any
other equipment.
C. Customer has the sole responsibility for the acquisition, preparation,
organization, maintenance and repair of the Hardware. All risk of loss or
damage to the Hardware, however caused, during ABC's performance of its
obligations within the scope of this Agreement shall be borne entirely by
Customer except those caused by ABC's gross negligence. All risks associated
with the preparation of Customer's computer room facility shall be borne
entirely by Customer.
D. Customer agrees to complete Hardware installation and preparation of
its computer room facility ninety (90) days prior to conversion.
3.2 SOFTWARE INSTALLATION
ABC shall deliver and install the Software.
4. CONVERSION (NOT APPLICABLE)
4.1 CONVERSION
A. ABC shall direct the conversion of the Customer from its current
brokerage accounting system to the ABC system. ABC's responsibilities shall
include converting Customer data files to the ABC required format, providing
manuals, and training of Customer personnel in the use and operation of the
System.
B. Customer agrees to cooperate with, and to assist, ABC in the
conversion process. Customer responsibilities shall include obtaining all
required data files from its existing brokerage accounting system or brokerage
accounting system vendor in
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electronic form, (magnetic tape) satisfactory to ABC on a timely basis,
verifying the accuracy and completeness of the conversion of these files by ABC,
and appointing a full-time conversion manager to coordinate all aspects of the
conversion. Customer will also make its personnel available for overtime work at
Customer's expense as required by the conversion.
C. Customer agrees to convert to the ABC System within one hundred eighty
(180) days from the date of this Agreement. If customer fails to convert within
one hundred eighty (180) days from the commencement of this Agreement, Customer
shall make monthly minimum payments pursuant to Schedule "C" until the
conversion is completed or this agreement is terminated pursuant to the
Agreement.
5. PRICE, PAYMENT AND COSTS
5.1 PRICE
Customer shall pay to ABC the prices, fees and costs as set forth in
Schedule C, and as set forth elsewhere in this Agreement.
5.2 TAXES
Customer shall, in addition to the other amounts payable under this
Agreement, pay all sales and other taxes, federal, state, or otherwise, however
designated, which are levied or imposed by reason of the transaction
contemplated by this Agreement. Without limiting the foregoing, Customer shall
promptly pay to ABC an amount equal to any such items actually paid, or required
to be collected or paid by ABC.
5.3 PAYMENT
Customer agrees to pay to ABC, within thirty (30) days after the date of
each invoice from ABC, the full amount said invoice. If Customer fails to pay
any amounts due as provided above, Customer shall additionally pay interest on
said amount to ABC at the rate of one and one-half percent (1-1/2%) per month
(but in no event more than the highest rate legally allowable) on such
delinquent amounts from the invoice date until date of payment.
5.4 SYSTEM OPERATORS
Customer agrees to hire and pay for all operators of the System at
Customer's premises. Customer shall limit use of the System to its employees
and consultants who have been trained and instructed in accordance with ABC's
requirements.
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5.5 TRAVEL COSTS
Throughout the term of this Agreement, Customer shall be solely responsible
for payment of all travel and living costs incurred by ABC to install, convert
and support the System.
5.6 SUPPLIES
Customer has sole responsibility to obtain, and shall pay all costs and
expenses related to, paper, forms and similar supplies necessary for day to day
operations of the System provided by ABC hereunder.
6. TERM AND TERMINATION
6.1 TERM
The initial term of this Agreement shall be for five (5) years, during
which time there will be no price increases. Either party may choose not to
renew the Agreement at the end of the five (5) year initial term by providing
the other party with one hundred eighty (180) days prior written notice. This
Agreement is not contingent on and shall not be affected by any other agreement
between the Customer and ABC.
6.2 TERMINATION BY CUSTOMER
Customer may terminate this Agreement prior to the expiration of the
initial five (5) year term, provided the Customer pays to ABC a termination
charge of: the monthly minimum fee as set forth in Schedule "C" times the
number of months remaining in the agreement.
6.3 SURVIVING OBLIGATIONS
Upon any termination, expiration, cancellation or non-renewal of this
Agreement by either Customer or ABC, then, notwithstanding any other provision
of this Agreement:
A. The Software license and other rights set forth in Section 2 with
respect to the Software and System Documentation shall terminate.
B. All confidentiality obligations hereunder, including without
limitation the provisions of Section 2.7, shall remain in force in perpetuity.
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7. ABC SUPPORT
7.1 SUPPORT SERVICES
ABC shall use best efforts to support use of the System by Customer on a
twenty-four (24) hour, seven (7) day a week basis. Said support shall include
the following, as reasonable under the circumstances: (A) phone advice, (B)
analysis from a terminal in New Jersey dialed into Customer's System, and (C)
sending ABC software maintenance support personnel to Customer's site as ABC
shall determine.
7.2 ENHANCEMENTS
Customer shall be entitled to receive enhancements to the Software and
Systems Documentation (the "Enhancements") referred to in 2.1(a) at no charge
upon ABC's announcement, as to each such Enhancement, that it is being made
generally available at no charge to ABC customers. ABC may provide Enhancements
to the existing Software that relate to functionality, performance and
efficiency, but is under no obligation to do so. If implementing said
Enhancements requires an upgrade to the IBM Operating System/400 or Hardware or
both, Customer shall have installed the appropriate IBM Operating System/400 or
Hardware upgrade prior to installation of the Enhancements. Customer is
required to have the Enhancements installed within sixty (60) days of being
informed by ABC that ABC is prepared to perform such installation. Customer
shall also have the right to purchase from ABC a license to use any software
module that is made available by ABC as an option, which shall be available to
the Customer at the cost provided on the ABC standard price list. The
Enhancements and options provided under this paragraph 7.2. shall be delivered
in object code form only.
ABC reserves the right to change the System specifications, data bases,
files, formats, data fields and application software without notice as it deems
necessary. Such change without notice will not cancel, alter or prevent the
enforcement of any provision of this Agreement.
7.3 REGULATORY COMPLIANCE
ABC shall use good faith efforts to modify the System to comply with the
rules and regulations of the regulatory and self-regulatory organizations within
whose jurisdiction the System operates where those rules and regulations can
most reasonably be complied with by the System. Customer shall be responsible
to inform ABC of how said changes affect its use of the System.
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7.4 LIMITATION
ABC IS RESPONSIBLE FOR MAINTAINING ONLY THE SOFTWARE PROVIDED BY ABC UNDER
THIS AGREEMENT AND IS NOT RESPONSIBLE FOR MAINTAINING COMPUTER PROGRAMS,
EQUIPMENT OR OTHER MATERIALS OR THINGS OBTAINED BY CUSTOMERS FROM OTHER SOURCES.
7.5 CESSATION OF SUPPORT
If ABC determines that it shall no longer support Customer's use of the
System, it shall provide Customer with one hundred eighty (180) days written
notice. The Customer may request within ninety (90) days of such notification
that ABC deliver to Customer a copy of the source code for the Software and its
related documentation, provided that Customer first executes a perpetual license
agreement, a copy of which is attached hereto as Schedule "D" and further
provided that Customer pays to ABC an amount equal to the monthly minimum fee as
set forth in Schedule "C" times the number of months remaining in the Agreement.
The Support provisions of this Agreement will also terminate immediately
upon the bankruptcy, liquidation or receivership of ABC, at which time ABC shall
immediately deliver a copy of the source code for the Software and its related
documentation to Customer, provided that Customer first signs a perpetual
license agreement for the software, a copy of which is attached hereto as
Schedule "D".
8. WARRANTIES AND LIMITATIONS OF LIABILITY
8.1 OWNERSHIP
ABC represents that it is the owner of, or has obtained licenses for, the
Software and System Documentation being licensed hereunder, and that it has the
right to grant Customer the license being granted hereunder.
8.2 EXPRESS WARRANTY
ABC represents that the System shall be in good working order. Customer
must immediately give ABC written notification setting forth any claimed defect
in detail. ABC shall use best efforts to remedy any such defect of which ABC
has been so notified, and which can be verified by ABC, in a manner consistent
with ABC's regular business practices.
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This warranty does not apply to corrections or remedies for difficulties or
defects due to changes to the System by Customer, or due to other causes
external to the Software as provided by ABC; Customer shall pay ABC at ABC's
standard rates for all such corrections and remedies.
The foregoing constitutes ABC's sole total obligation, and Customer's sole
and exclusive remedy, under the warranty given this paragraph 8.2.
8.3 WARRANTY DISCLAIMER
EXCEPT AS PROVIDED HEREIN, THERE ARE NO WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR OF
FITNESS FOR A PARTICULAR PURPOSE.
8.4 LIMITATION OF LIABILITY
ABC's total liability to Customer for money damages shall not exceed
$10,000 regardless of the form in which any legal or equitable claim or action
relating to this Agreement may be asserted by Customer. IN NO EVENT WILL ABC OR
CUSTOMER BE RESPONSIBLE FOR SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL
DAMAGES WHICH CUSTOMER MAY INCUR OR EXPERIENCE ON ACCOUNT OF ENTERING INTO OR
RELYING ON THIS AGREEMENT, EVEN IF ABC OR CUSTOMER HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
9. GENERAL
9.1 ENTIRE AGREEMENT
Customer acknowledges that it has not been induced to enter into this
Agreement by any representation or warranty not set forth herein. This
Agreement contains the entire understanding of the parties with respect to its
subject matter and supersedes all existing agreements and all other oral,
written or other communications between the parties concerning the subject
matter hereof. This Agreement cannot be modified in any way except by a writing
signed by both parties.
9.2 ASSIGNMENT
This Agreement may not be assigned by Customer in whole or in part without
the prior written consent of ABC. This Agreement shall be binding upon and be
binding upon and shall
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inure to the benefit of ABC and Customer, their respective successors and
permitted assigns.
9.3 ENFORCEABILITY
If any provision of this Agreement, or any portion thereof, shall be held
to be invalid, illegal or unenforceable, the validity, legality or
enforceability of the remainder of this Agreement, including without limitation
the limitations on ABC's liability, shall not be affected or impaired thereby.
9.4 NOTICES
All notices shall be in writing, hand-delivered or sent by registered or
certified mail, return receipt requested, and addressed to the parties at the
addresses set forth at the beginning of this Agreement or to any other address
upon notice to the other party.
9.5 USE OF NAME
Neither ABC nor Customer shall utilize the name of the other in any way
without the other's prior written consent, provided however, that Customer may
inform its customers that ABC is providing the System to Customer.
9.6 NEW YORK LAW
This Agreement and performance hereunder shall be governed by and construed
in accordance with the laws of the State of New York.
9.7 ARBITRATION
Any dispute between Customer and ABC arising out of this agreement or the
breach thereof shall be submitted to arbitration before the National Association
of Securities Dealers pursuant to its rules and judgment upon the award may be
entered in any court having jurisdiction thereof.
9.8 HEADINGS
The headings used in this Agreement are intended for convenience or
reference only and shall not affect interpretation of this agreement.
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9.9 AUTHORITY TO SIGN
The individuals executing this Agreement on behalf of ABC and Customer do
each hereby represent and warrant that they are duly authorized by all necessary
action execute this Agreement on behalf of their respective corporations.
9.10 DELAYS
Dates or times by which ABC or Customer are required to perform under this
Agreement shall be postponed automatically to the extent that ABC or Customer is
prevented from meeting them by causes beyond its reasonable control.
IN WITNESS WHEREOF, the parties have hereto affixed their hands and seals
as of the day and year first written above.
PERSHING DIVISION OF XXXXXXXXX,
LUFKIN & XXXXXXXX SECURITIES CORPORATION
Xxxxxx X. Xxxxxxxx
---------------------------------------
By: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President
Date: 4/7/97
Xxxxx XxxXxxxxx, Inc.
Xxxxxx Xxxxxxx, Xx.
---------------------------------------
By: Xxxxxx Xxxxxxx, Xx.
Title: Managing Partner
Date: 4-15-97
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