BROKERAGE SERVICES AGREEMENT
(Dual Employee Program)
THIS AGREEMENT, dated as of Jan 1, 1999 is by and between UVEST
-----------
FIINANCIAL SERVICES GROUP, INC., a North Carolina corporation doing business as
UVEST ("UVEST"), and the financial institution whose name appears on the final
page of this Agreement ("Subscriber").
THE PARTIES AGREE AS FOLLOWS:
1. Effective Date. This Agreement shall bind UVEST and Subscriber when
executed by an authorized representative of each party. The date of this
Agreement is referred to as the "Effective Date."
2. UVEST Centers. UVEST is a broker-dealer registered with the Securities
and Exchange Commission and is a member of the National Association of
Securities Dealers, Inc., and provides certain securities brokerage and
investment advisory services under its UVEST trademark to the general public,
including depositors and other customers of participating financial
institutions, through the operation of UVEST service centers ("UVEST Centers")
located within the branches of such participating financial institutions.
3. Determination of UVEST Center Locations. As soon as practicable
following the Effective Date, and from time to time during the term of this
Agreement, UVEST and Subscriber shall consult with each other and shall use all
reasonable efforts to determine the number and identity of Subscriber's
locations or locations of its affiliate depository institutions at which UVEST
shall open and operate UVEST Centers. All references to "Subscriber locations"
shall be deemed to include the location of Subscriber and such affiliate
depository institutions as applicable. UVEST shall use all reasonable efforts
expeditiously to open and operate such number of UVEST Centers at such ]ocations
as may from time to time be designated by Subscriber and approved by UVEST. At
Subscriber's request and with UVEST's approval, UVEST shall transfer any UVEST
Center then being operated at any of Subscriber's locations which is being
closed or relocated to a different location. Subscriber is not granted exclusive
rights to UVEST Services in any territory or location. UVEST may enter into
agreements with other Subscribers and operate UVEST Centers at any other
locations selected by UVEST.
4. Subscriber's Obligations. Subscriber shall use all reasonable efforts to
provide the facilities and personnel and to cooperate with UVEST and to do all
other acts and things required by this Agreement to be provided or done by
Subscriber, to permit UVEST to open and operate the UVEST Centers in accordance
with the terms of this Agreement. Subscriber further agrees that it shall not
permit any other broker-dealer to offer brokerage services at any of
Subscriber's locations during the term of this Agreement.
5. UVEST Program. The "UVEST Program" consists of the following services
which UVEST shall provide:
(a) Brokerage Services. Registered representatives of UVEST at the UVEST
Centers operated at Subscriber's locations and at the national UVEST offices
will, subject to all applicable laws, rules, regulations and procedures,
including those of the Securities and Exchange Commission ("SEC") and the
National Association of Securities Dealers, Inc. (the "NASD"), and subject to
the terms and conditions hereof, execute purchases and sales of Securities (as
hereinafter defined) for UVEST customers, including depositors and other
customers of Subscriber and the general public. As used herein, the term
"Security" or "Securities" shall have the meaning set forth in the Securities
Exchange Act of 1934, as amended, and shall also include all other financial
instruments or products included in the UVEST Program from time to time,
including without limitation, debt and equity instruments, mutual funds,
variable annuities, fixed annuities and other financial instruments and products
approved by appropriate regulatory authorities from time to time for sale
(directly or indirectly) by financial institutions. UVEST may retain one or more
clearing brokers to perform order execution, billing, collection, account
surveillance and other services for UVEST which are customarily performed by
clearing brokers.
UVEST shall give notice to Subscriber of any change in the clearing brokers it
uses to perform such services and will endeavor to give such notice prior to
such change. In order to execute such purchase and sale orders, UVEST shall
establish and maintain cash and/or margin accounts for customers, such accounts
to be maintained as accounts of UVEST or its clearing broker. UVEST reserves the
right, in its sole discretion, to refuse to open any account or to execute any
order by any customer for the purchase or sale of a Security, which right shall
not be unreasonably exercised. Subscriber agrees that such right shall not have
been unreasonably exercised if UVEST believes in good faith that such an account
or such Security or transaction is not appropriate or suitable for such
customer.
(b) Investment Advisory Services. Registered representatives of UVEST at
the UVEST Centers operated at Subscriber's locations and at the national UVEST
offices, subject to compliance with and registration under all applicable laws,
rules and regulations and subject to the terms and conditions hereof, will
provide investment advice and recommendations to UVEST customers (in accordance
with each UVEST customer's suitability profile and investment goals) based upon
research conducted by, and recommendations obtained from, investment advisory
services and UVEST's internal research group. UVEST shall determine the number
of registered representatives which shall staff each UVEST Center located at one
of Subscriber's locations, which number shall be subject to approval by
Subscriber. Such determination shall in all events be subject to Subscriber's
approval of the registered representatives as provided in Section 8(b) hereof.
(c) Marketing, Education, Research and Technical Services. UVEST will
provide Subscriber with marketing, education, research and technical services,
which will include:
2
1. advice and assistance regarding the selection of Subscriber's
locations at which UVEST shall open and operate UVEST Centers;
2. advice and assistance regarding the placement and set-up of the
UVEST Center at Subscriber's locations;
3. advice and assistance regarding the identification, recruiting,
obtaining licenses, and registration of qualified personnel who will act as
Dual Employees (as defined below) and regarding the training of such
persons to qualify as registered representatives;
4. advice and assistance regarding the structuring of incentive-based
compensation programs for Dual Employees (as defined below);
5. advice and assistance regarding the structuring of incentive
programs for Non-Dual-Employees (as defined below) for referrals;
6. advice and assistance regarding sales management and support at the
UVEST Centers and UVEST's national office;
7. UVEST-sponsored advertising and general marketing assistance for
the promotion of the UVEST Program;
8. advice and assistance regarding, and review and approval of,
Subscriber-sponsored advertising and promotion of the UVEST Program and
general marketing assistance;
9. post-qualification training of Subscriber's Dual Employees and
materials for the orientation of Non-Dual Employees (as defined below) with
respect to the UVEST Program;
10. compliance and procedures manuals, and administration thereof, for
the operation of the UVEST Program;
11. advice and assistance regarding each UVEST Center, including
designation and segregation from the remainder of the lobby area at such
location of Subscriber;
12. advice and assistance regarding UVEST's BRIMS technology platform
and related services;
3
13. advice and assistance regarding all other standard furnishings,
accessories, equipment and supplies required to make the UVEST Centers at
Subscriber's locations operational;
14. centralized investment research;
15. national inquiry/help desks;
16. phone-in service for use by UVEST customers during non-regular
business hours as set forth in Section 11 hereof,
17. monitoring of compliance at the UVEST Centers with applicable
laws, rules and regulations and with UVEST's manuals, rules, procedures and
instructions, including maintaining books and records for the securities
accounts of each customer serviced by UVEST as required by SEC Rule 17a-3a
and other applicable laws, rules and regulations;
18. monitoring of relevant laws, rules and regulations affecting the
UVEST Program and the operation of the UVEST Centers;
19. disbursement of Revenue Sharing Payments (as defined below); and
20. such other services as may from time to time be outlined in the
UVEST comphance manual
6. Modification of UVEST Program. The UVEST Program is a uniform program
owned and operated by UVEST. Subject to the provisions of Section 26 hereof,
UVEST may modify the UVEST Program from time to time for the intended purpose of
meeting applicable regulatory requirements, making the UVEST Program more
effective, efficient, economical or competitive, adapting to new technology or
conditions or enhancing the reputation or public acceptance of the UVEST
Program.
7. Revenue Sharing Payments.
(a) UVEST shall make payments to Subscriber with respect to all
Securities transactions which occur at, or are attributable to, the UVEST
Centers operated at Subscriber's locations ("Revenue Sharing Payments"), in
accordance with UVEST's schedule of Revenue Sharing Payments in effect from
time to time. UVEST's current schedule of Revenue Sharing Payments is set
forth on Schedule 1 attached to this Agreement. Revenue Sharing Payments
represent reimbursement for compensation of the Dual Employees and payment
for the use of the facilities and equipment of Subscriber or its affiliate
depository institutions, as applicable, required for the operation of the
UVEST Centers. The Board of Directors of UVEST may, after careful
consideration, amend the Revenue Sharing Payments schedule from time to
time
4
during the term of this Agreement. UVEST shall notify Subscriber not less
than 30 days in advance of any reduction in the percentage of Revenue
Sharing Payments, which reduction shall take effect on the date specified
in such notice; provided, no decrease in the percentage of Revenue Sharing
Payments shall be permitted within 12 months after the Effective Date; and
provided, further, Subscriber may terminate this Agreement by giving notice
to UVEST within 30 days following UVEST's notice of any such reduction in
the percentage of Revenue Sharing Payments. If Subscriber gives a notice of
termination to UVEST pursuant to this Section 7(a), this Agreement will
terminate 60 days following such notice and the reduction in the percentage
of Revenue Sharing Payments shall not apply to Revenue Sharing Payments
payable to Subscriber prior to such termination.
(b) UVEST reserves the right to deduct from Revenue Sharing Payments
(i) all costs, expenses, charges and fees, if any, payable by Subscriber to
UVEST pursuant to this Agreement and (ii) an amount equal to 75% of all
losses, costs and expenses, if any, incurred by UVEST, directly or
indirectly, as the result of the failure of any UVEST customer of a UVEST
Center operated at any of Subscriber's locations to meet any obligation to
deliver any funds or Securities, to meet any margin call or to meet any
other obligation pursuant to UVEST's agreement to perform Securities
brokerage and investment advisory services for such person; provided, that
(A) UVEST shall use such efforts as are customary in the securities
brokerage business to mitigate the losses, costs and expenses referred to
in clause (ii) above prior to making any deduction therefor from
Subscriber's Revenue Sharing Payments and (B) in no event shall
Subscriber's liability pursuant to the preceding clause (ii) exceed the
amount of Revenue Sharing Payments eamed by Subscriber pursuant to this
Agreement after the date of such loss. UVEST shall make Revenue Sharing
Payments to Subscriber prior to the last day of the following calendar
month with respect to all Securities transactions for which it has received
commissions through the end of the immediately preceding calendar month.
Each Revenue Sharing Payment shall be accompanied by a complete record of
transactions and, if applicable, of any costs, expenses, charges or fees
incurred by Subscriber and deducted from such Revenue Sharing Payment.
8. Dual Employees. At the UVEST Centers operated at Subscriber's locations,
Securities transactions shall be effected, and investment advice and
recommendations shall be disseminated, only by registered representatives of
UVEST, who shall at all times be registered and qualified with the SEC, the
NASD, and all other applicable federal and state securities and insurance laws
(including without limitation investment advisor laws); and who shall undertake
such employment by UVEST in addition to their employment by Subscriber. Such
persons are referred to in this Agreement as "Dual Employees" or "registered
representatives." Each Dual Employee shall enter into an employment agreement
with UVEST, in a form to be provided by UVEST and agreed to by Subscriber,
setting forth the terms of the Dual Employee's employment as a registered
representative. Neither Subscriber nor any of its affiliate depository
institutions shall have any responsibility for supervision of the Securities
brokerage and investment advisory services performed by the Dual Employees or
for compliance by the Dual Employees with UVEST's standards of conduct or
5
procedures established for such persons and, except as set forth in Sections
8(d), 8(e) and 8(f) hereof, shall not be obligated to notify UVEST regarding any
Dual Employee's acts.
(a) Compensation. Subscriber shall pay the compensation of the Dual
Employees in amounts to be determined by Subscriber and UVEST. UVEST shall
reimburse Subscriber for such compensation payments by means of Revenue
Sharing Payments. Except to the extent permitted by federal and state
securities and banking laws, rules and regulations, neither UVEST nor
Subscriber shall compensate any Dual Employee, directly or indirectly,
based upon the volume of Securities transactions, commissions or Revenue
Sharing Payments generated by any Dual Employee, the Subscriber or any
UVEST Center. Any portion of a Dual Employee's compensation based on such a
volume shall be subject to the mutual approval of Subscriber and UVEST.
Subscriber shall comply with all of UVEST's instructions for the
implementation of the foregoing restrictions regarding the compensation of
the Dual Employees. Subscriber agrees to maintain payroll and bonus records
for each Dual Employee, to withhold payroll taxes from the compensation of
each Dual Employee, and to remit payroll taxes for each Dual Employee
(including the employer's portion of any such taxes) to the appropriate
government agencies in compliance with applicable law. UVEST shall have the
right to inspect the payroll and bonus records maintained by Subscriber for
each Dual Employee. In addition, Subscriber shall transmit to UVEST no less
often than annually, and promptly following UVEST's request, a copy of each
Dual Employee's W-2 Form or such information with respect to the
compensation of any or all of the Dual Employees in such form as UVEST may
otherwise prescribe.
(b) Number; Identification and Acceptability. Subscriber and UVEST
shall determine the individuals which shall receive offers of employment as
registered representatives of UVEST. If UVEST decides to make an offer of
employment to one of Subscriber's employees, to which Subscriber agrees,
Subscriber shall make available to UVEST upon UVEST's request all records
in Subscriber's possession which UVEST reasonably considers necessary, or
which are required by law, rule or regulation, in connection with such
person's employment, qualification and registration as a UVEST
representative. A UVEST representative may be assigned to more than one
UVEST Center.
(c) Training. The Dual Employees shall be required to pass one or more
examinations prescribed by law in order to qualify to act as registered
representatives. Prior to taking such examination(s), each Dual Employee
must successfully complete certain training, including a prescribed
pre-examination course. Such pre-examination training shall be provided at
Subscriber's expense by either UVEST or third-party vendors. UVEST shall
notify Subscriber of the availability of such training. UVEST shall provide
additional training of the Dual Employees with respect to the UVEST Program
subsequent to their qualification as registered representatives. Subscriber
shall not prevent the Dual Employees from being available to fully
participate in such pre- and post-qualification training and in such
further training, if any, as UVEST may provide.
6
(d) Control by UVEST. UVEST shall exercise exclusive control of the
Dual Employees with respect to their conduct of Securities brokerage and
investment advisory activities at the UVEST Centers and UVEST shall cause
their conduct in such capacity to be governed in all respects
(i) by UVEST's compliance and procedures manuals and all other
manuals, procedures, rules and instructions of UVEST, current copies
of which UVEST has provided or will provide to Subscriber and such
Dual Employees, and
(ii) by applicable laws, rules, and regulations and policies of
applicable regulatory agencies, all as in effect from time to time.
Subscriber shall strictly honor such control relationship and, subject
to Section 25 hereof, neither it nor any of its affiliates, nor any
person related to any of them shall have any involvement whatsoever in
any of the Securities brokerage and investment advisory services
performed by the Dual Employees. UVEST alone shall exercise all rights
and remedies of the "Employer" set forth in the employment agreement
with each Dual Employee except as otherwise specified herein.
Notwithstanding the above, it is understood and agreed to between
UVEST and Subscriber that, to the extent that the loss is not
attributable to the negligence or other fault of either party, if any
Dual Employee embezzles or otherwise steals from UVEST, UVEST shall
bear such loss, and if any Dual Employee embezzles or otherwise steals
from Subscriber or any of its affiliates, Subscriber or such affiliate
shall bear such loss. It is further understood and agreed that any
loss due to a mysterious disappearance of funds from either UVEST or
Subscriber shall be borne by the party suffering such disappearance.
(e) Discipline. Each Dual Employee shall be subject to discipline
UVEST and by various federal and state regulatory authorities, Securities
exchanges, clearing corporations or associations, associations of
Securities brokers and dealers and certain other entities having
jurisdiction over the operation of the UVEST Centers and the conduct of the
Dual Employees. Subscriber shall cooperate with UVEST in all respects in
connection with the enforcement of any sanctions imposed by UVEST or by any
such entities against any Dual Employee. Such disciplinary measures may
include suspension or dismissal of any Dual Employee as a registered
representative of UVEST. In the event of any such suspension or dismissal,
Subscriber shall impose, upon UVEST's request, the same sanction with
respect to the Dual Employee's employment by Subscriber as it relates to
securities activities, and shall use its best efforts to cause any of its
affiliates who employ such Dual Employee in any capacity to impose the same
sanction with respect to the Dual Employee's employment by such affiliate
as it relates to securities activities. Unless a Dual Employee has been
suspended or barred by such a regulatory authority, UVEST will not
terminate or suspend a Dual Employee except in the event of material
non-compliance with UVEST's standards of conduct. Subscriber shall report
to UVEST any violation of any law, rule or regulation or of any of UVEST's
standards of conduct or procedures for registered representatives of which
Subscriber has knowledge, it being understood that Subscriber shall not
have any obligation to monitor the activities of the
7
Dual Employees with regard to such laws, rules or regulations or UVEST's
standards of conduct or procedures established for such persons. Subscriber
shall notify UVEST in a manner calculated to give UVEST immediate notice of
any such violation and shall promptly thereafter confirm any such report in
writing to UVEST's compliance officer.
(f) Conduct of Subscriber's Business. In accordance with their
employment by both UVEST and Subscriber, the Dual Employees may conduct
business on behalf of Subscriber or its affiliate depository institutions
when not acting as registered representatives of UVEST. The conduct of
Subscriber's business by the Dual Employees shall be consistent with, and
subject to, the proisions of Section 12 hereof.
(g) Hiring of Employees. (i) Without the prior consent of UVEST,
Subscriber agrees that during the term of this Agreement and for a period
of one year after its termination, Subscriber will not, directly or
indirectly, hire, recruit, solicit or induce or adise or recommend to any
other person that such other person hire, recruit, solicit or induce any
person employed by UVEST, its subsidiaries or affiliates, excluding Dual
Employees, to terminate his or her employment with UVEST, its subsidiaries
or affiliates. Without violating the proisions of this Section 8(g),
Subscriber may hire, solicit or recommend the employment of any person
previously employed by UVEST, its subsidiaries or affiliates, if the
hiring, solicitation or recommendation occurs more than 60 days after the
effective date of such person's termination of employment with UVEST, its
subsidiaries or affiliates. (ii) Without the prior consent of Subscriber,
UVEST agrees that during the term of this Agreement and for a period of one
year after its termination, UVEST will not, directly or indirectly, hire,
recruit, solicit or induce or adise or recommend to any other person that
such other person hire, recruit, solicit or induce any person employed by
Subscriber, its subsidiaries or affiliates, excluding Dual Employees, to
terminate his or her employment with Subscriber, its subsidiaries or
affiliates. Without violating the proisions of this Section 8(g), UVEST may
hire, solicit or recommend the employment of any person previously employed
by Subscriber, its subsidiaries or affiliates, if the hiring, solicitation
or recommendation occurs more than 60 days after the effective date of such
person's termination of employment with Subscriber, its subsidiaries or
affiliates.
9. Indemnification.
(a) UVEST shall, provided Subscriber satisfies its obligations
hereunder, defend, indemnify and hold harmless Subscriber (and each person
or entity which controls Subscriber within the meaning of Section 20(a) of
the Securities Exchange Act of 1934, as amended or Section 15 of the
Securities Act of 1933, as amended), its affiliate depository institutions
and their respective directors, officers, agents and employees (other than
Dual Employees to the extent provided in Section 9(b) below), against any
and all losses, claims, damages, liabilities, actions, costs or expenses to
which such indemnified party may become subject to the extent
8
such losses, claims, damages, liabilities, actions, costs or expenses arise
out of or are based upon:
(i) the failure of UVEST to remain a member of the NASD or to remain a
duly licensed broker-dealer under federal and state securities laws;
(ii) Any violation of federal or state securities or insurance laws
(including, without limitation, laws relating to the registration or
qualification as a broker-dealer, investment adisor or insurance
agent) by UVEST, its officers, its agents or its employees (including
Dual Employees, but only when such Dual Employees are acting in their
capacity as registered representatives of UVEST) arising out of the
purchase, sale, offer to purchase or offer to sell, or the furnishing
of investment advice with respect to, any Security at a UVEST Center;
(iii) any breach, default or violation of, under or with respect to
any of UVEST's duties, obligations, representations, warranties or
covenants contained in this Agreement; or
(iv) any negligence, gross negligence, recklessness or willful or
intentional misconduct of, or violation of any law by, UVEST or any
UVEST employee or agent (including any Dual Employee in his/her
capacity as a representative of UVEST).
UVEST agrees to maintain, in full force and effect, insurance in amounts
sufficient to meet its indemnification obligations under this Section 9(a),
in such form as shall be established by the UVEST Board of Directors from
time to time.
(b) In no event, however, shall such indemnification inure exclusively
to the personal benefit of any Dual Employee whose action or failure to act
was the cause of or resulted in the violation of federal or state
securities or insurance laws and in no event shall such indemnification
result in the payment of moneys to any such Dual Employee. In addition,
there shall be no indemnification under this Section 9(b) to the extent the
violation of federal or state securities or insurance laws was the result
of action or failure to act by a Dual Employee where such Dual Employee was
told to perform such action or to refrain from so acting by an officer of
Subscriber.
(c) Subscriber shall, provided UVEST satisfies its obligations
hereunder, defend, indemnify and hold harmless UVEST (and each person or
entity which controls UVEST within the meaning of Section 20(a) of the
Securities Exchange Act of 1934, as amended or Section 15 of the Securities
Act of 1933, as amended), its directors, officers, agents and employees
against any and all losses, claims, damages, liabilities, actions, costs or
expenses to which such indemnified party may become subject to the extent
such losses, claims, damages, liabilities, actions, costs or expenses arise
out of or are based upon:
9
(i) the failure of Subscriber to comply with applicable federal and
state laws relating to Subscriber or its subsidiaries other than
federal or state securities or insurance laws relating to the offer or
sale of Securities, investment advisory services or broker-dealer
activities relating thereto except as contemplated by (ii) and (iii)
below;
(ii) the failure of Subscriber to obtain the approval of UVEST for any
advertising, promotional materials or marketing efforts for the UVEST
Program;
(iii) except as contemplated pursuant to Section 25 hereof,
interference by Subscriber or by any of its directors, officers,
agents or employees (including any Dual Employee acting in a capacity
other than as a provider of brokerage services) with UVEST's
supervision and control of Dual Employees with respect to their
conduct of securities brokerage and investment adisory activity at the
UVEST Centers;
(iv) the failure of Subscriber to maintain payroll and bonus records
for each Dual Employee, to withhold payroll taxes from the
compensation of each Dual Employee, and to remit payroll taxes for
each Dual Employee (including the employer's portion of any such
taxes) to the appropriate government agencies in compliance with
applicable law, which functions Subscriber has agreed to perform on
behalf of UVEST;
(v) the acts or omissions of Subscriber's Non-Dual Employees (as
defined below), except to the extent of acts or omissions where such
non-Dual Employee was told to perform such action or to refrain from
so acting by any employee of UVEST, including a Dual Employee;
(vi) any breach, default or violation of, under or with respect to any
of Subscriber's duties, obligations, representations, warranties or
covenants contained in this Agreement; or
(vii) any negligence, gross negligence, recklessness or willful or
intentional misconduct of Subscriber or any Subscriber employee or
agent (excluding any Dual Employee acting in his/her capacity as a
representative of UVEST).
(d) Promptly after receipt by an indemnified party under this Section
9 of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the party to this Agreement from which it is seeking
indemnification under this Section 9, notify such other party in writing of
such claim or the commencement of such action, but the failure to notify
the indemnifying party will not relieve the indemnifying party of any
liability it may have to any indemnified party, except to the extent that
the indemnifying party demonstrates that its liability for such action is
prejudiced by the indemnifying party's failure to give notice. In case any
such action is brought against any indemnified party, and such indemnified
party notifies UVEST or Subscriber, as appropriate, of
10
the commencement thereof, as provided herein, UVEST or Subscriber, as
appropriate, shall be entitled to participate therein and, at its option,
assume the defense thereof. Upon assumption by UVEST or Subscriber, as
appropriate, of the defense of such action, UVEST or Subscriber, as
appropriate, will cease to be liable to such indemnified party under this
Section 9 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof.
(e) An indemnified party hereunder shall settle a claim for which it
has requested or intends to request indemnification only with the consent
of the indemnifying party.
10. Non-Dual Employees.
(a) Limited activities. Employees of Subscriber or its affiliate
depository institutions who are not also registered representatives
("Non-Dual Employees") may distribute promotional literature regarding the
UVEST Program, direct persons to registered representatives of UVEST,
provide ordinary banking services such as crediting or debiting accounts,
even though such services are incident to transactions with UVEST, and
perform other clerical and ministerial tasks to the extent that employees
would perform such tasks in any other situation. Non-Dual Employees may not
recommend Securities, provide investment advice, hold themselves out as
agents of UVEST, or engage in any Securities brokerage or Securities
investment adisory activities to the extent that engaging in such
activities would require the Non-Dual Employees to register and qualify
with the NASD, as such requirements may be amended from time to time, or
would require the Subscriber or its affiliate depository institutions to
register as a broker-dealer under federal or state securities laws, as such
laws may be amended from time to time. Subscriber shall comply in all
respects with UVEST's Compliance Manual for UVEST participants
("Participants' Compliance Manual"), as it may be modified from time to
time, shall monitor the activities of, and cause compliance by, Non-Dual
Employees with UVEST's standards of conduct established for such persons
and shall report to UVEST, in the manner set forth in Section 8(e) hereof,
any violations of such standards of conduct of which Subscriber has
knowledge. Neither UVEST nor Subscriber shall furnish incentive
compensation to any Non-Dual Employee or otherwise compensate any Non-Dual
Employee, directly or indirectly, based upon the volume or occurrence of
Securities transactions, commissions or compensation generated by UVEST or
any UVEST Center; provided that, when permitted by regulators and
applicable law, Subscriber may pay referral fees to Non-Dual Employees.
Such referral fees shall be a one-time, per-customer fee of a nominal,
fixed-dollar amount, wholly unrelated to the execution of Securities
transactions or the volume of Securities traded by the customer.
(b) Training. UVEST shall make materials available to assist
Subscriber in training Non-Dual Employees regarding standards of conduct
and permissible activities in connection with the UVEST Program. Subscriber
or its affiliate depository institutions shall make Non-Dual Employees
available from time to time to participate in such training.
11
11. Hours of Operation. Registered representatives of UVEST located at the
national UVEST offices in Charlotte, NC will be available by telephone to
provide Securities brokerage and investment adisory services to UVEST customers
during all New York Stock Exchange trading hours.
12. Separation of Businesses. UVEST and Subscriber, including Subscriber's
affiliate depository institutions, shall each maintain strict and total
separation of their businesses from the business conducted at each UVEST Center,
including separation of records and of physical facilities. All Dual Employees
shall conduct business at all times in accordance with UVEST's corporate
identity policies, as expressed in Participant's Compliance Manual and herein,
so as not to lead to confusion between the business conducted by Subscriber and
the business conducted by UVEST through the operation of the UVEST Centers at
Subscriber's locations. Subscriber agrees to be bound by, and to comply in all
material respects with, the Participants' Compliance Manual, a current copy of
which UVEST has provided or will provide to Subscriber and which, as it may be
modified from time to time in accordance with the purposes set forth in Section
6 hereof, is incorporated in and made a part of this Agreement.
13. Access.
(a) UVEST supervisory personnel and representatives of state and
federal regulatory authorities and of any other entity having jurisdiction
over the operation of the UVEST Centers and the conduct of the Dual
Employees shall have unimpeded access during Subscriber's business hours to
the UVEST Centers, to all records maintained in connection with the
operation of the UVEST Centers and to Dual Employees and their personnel
records. At the time UVEST desires to exercise such access, UVEST shall
notify the manager of the branch in which the UVEST Center being accessed
is located and the Investment Program Manager of Subscriber and inform the
manager and such Investment Program Manager of the purpose of the visit.
(b) In addition to any rights of Subscriber and its affiliate
depository institutions pursuant to Section 25 hereof, the supervisory
personnel of Subscriber or its affiliate depository institutions and
representatives of their respective state and federal regulatory
authorities and any other entity having jurisdiction over any of them or
the transactions contemplated under this Agreement shall have unimpeded
access during UVEST's business hours to all records of UVEST relating to
transactions effected hereunder.
14. Subscriber Costs and Expenses.
(a) Direct Costs and Expenses. Subscriber shall be directly
responsible for the costs and expenses associated with the following items
in connection with the operation of the UVEST Centers at Subscriber's
locations:
12
1. the furnishings, accessories and equipment necessary to
establish the UVEST Center, including a BRIMS technology platform
2. the service and maintenance for the BRIMS technology
platform;
3. investment research material employed in the UVEST
Center;
4. telephones and other operating equipment;
5. Dual Employee compensation (which will be reimbursed to
Subscriber through Revenue Sharing Payments as provided herein)
and Dual Employee costs, including, without limitation,
recruitment costs, salary and benefits, travel (including but not
limited to any travel associated with pre-qualification or
post-qualification training), cost of pre-qualification training
and prescribed pre-examination course, examination fees and
filing fees and UVEST's corporate stationery and business cards;
6. Dual Employee post-qualification sales training
materials;
7. recruitment costs, salary and benefits for any support
personnel;
8. Subscriber-sponsored advertising and promotion; and
9. all other costs associated with the operation of the
UVEST Centers at Subscriber's locations and not specified in
Section 15 hereof. Subscriber shall pay all costs and expenses
set forth in this Section 14 directly to third-party vendors or
to UVEST or the Dual Employees, in accordance with UVEST's
applicable standard procedures and fee schedules, each as in
effect from time to time. In the UVEST Centers at Subscriber's
locations, Subscriber and UVEST shall mutually approve the
furnishings, furniture, fixtures and materials to be used by
UVEST in the operation of the UVEST Center. UVEST may from time
to time, following notice to Subscriber, eliminate one or more of
Subscriber's direct costs or expenses.
(b) Indirect Costs and Expenses. With approval from Subscriber,
UVEST shall from time to time furnish to each UVEST Center promotional
literature in reasonable quantities determined by UVEST. Subscriber
shall pay for such items furnished in excess of such reasonable
quantities and/or requiring customization at a charge to Subscriber
equal to UVEST's cost for such items, which shall be based upon the
cost of development, production or purchase, shipping, handling,
billing and any applicable taxes.
15. UVEST Costs and Expenses. UVEST shall be directly responsible for
the following costs and expenses in connection with the operation of the
UVEST Program:
13
1. all costs associated with the operation of UVEST's offices
other than at Subscriber's locations, including centralized investment
research, national and regional inquiry/help desks for use by UVEST
registered representatives and phone-in service for use by UVEST
customers during non-regular business hours as set forth in Section 11
hereof;
2. all costs associated with the recruitment, training,
qualification and employment by UVEST of all UVEST employees who are
not also employees of Subscriber;
3. post-qualification training of Subscriber's Dual Employees and
materials for the orientation of Non-Dual Employees regarding the
UVEST Program;
4. reasonable quantities of promotional literature furnished from
time to time to each UVEST Center;
5. UVEST-sponsored advertising and promotion of the UVEST
Program;
6. technical assistance program;
7. compliance and supervision; and
8. field sales support and related travel expenses.
16. Advertising and Promotion. Each party shall secure the other
party's prior written approval of all advertising and promotional
materials, if any, prepared by or on behalf of such party which mention the
other party or the UVEST Program. All such advertising and promotional
materials shall make it clear that the UVEST Program is provided by UVEST
and not by Subscriber, that UVEST and Subscriber are separate, distinct and
unaffiliated entities, and that the investment products sold through UVEST
Centers by UVEST are not deposits insured by the FDIC. Subject to the
provisions of Section 25 hereof, UVEST may use Subscriber's name and may
identify Subscriber's locations at which the UVEST Centers are operated.
UVEST and Subscriber shall also meet prior to or as soon as possible after
the opening of the first UVEST Center at one of Subscriber's locations to
develop a comprehensive six-month business plan to promote and develop the
UVEST Program for the Subscriber. Thereafter, UVEST and Subscriber shall
meet approximately every six months to review the performance of the
business plan for the prior six months and to develop a new business plan
for the succeeding six months. The cost of such meetings shall be shared
equally by UVEST and Subscriber.
17. Vendor Relationships. In addition to being solely responsible for
the investment research regarding Securities, UVEST shall be solely
responsible for all contracts and discussions with all vendors of
Securities regarding the quality or investment characteristics of such
Securities, their availability and all other matters related to such
Securities, and UVEST shall be solely responsible for all other aspects of
the relationship between such vendors and the UVEST Program.
14
18. Bankruptcy, Changes in Control, Etc. Any party hereto (the
"defaulting party") shall give the other party hereto prompt written notice
in the event that such defaulting party (i) liquidates or dissolves; (ii)
makes an assignment for the benefit of creditors, becomes insolvent or is
unable to pay its debts as they mature, files a voluntary petition in
bankruptcy or a petition, answer or consent seeking reorganization or
readjustment of its indebtedness under applicable bankruptcy or insolvency
laws, consents to the appointment of a receiver or trustee for all or a
substantial part of its property or takes corporate or other action for the
purpose of effecting any of the foregoing; (iii) has filed against it a
petition for proceedings in bankruptcy or for its reorganization or for the
readjustment of its indebtedness under applicable bankruptcy or insolvency
laws or has a receiver or trustee appointed for it or for all or a
substantial part of its property; or (iv) experiences a change in control
through merger, consolidation or reorganization in a transaction in which
such party is not the surviving entity, a sale of substantially all of its
assets or, to the extent known by such defaulting party, the acquisition by
any person or related group of 25% or more of its outstanding equity
interest. The non defaulting party shall have the right to terminate this
Agreement upon the happening of any such event.
19. Term. This Agreement shall have an initial term of two years and
shall automatically renew for subsequent terms of one year, subject to
termination as provided in Section 20 hereof.
20. Arbitration; Termination; Suspension.
(a) UVEST and Subscriber shall work together in good faith to
resolve any dispute arising between them. If UVEST and Subscriber
cannot resolve such dispute after a good faith attempt to do so,
either party may submit such dispute to arbitration in Philadelphia,
Pennsylvania such arbitration to be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association.
The arbitration award shall be final and binding. Judgment upon the
award rendered may be entered in any court having jurisdiction over
the party against which the award is rendered. Nothing in this Section
20(a) shall prevent UVEST or Subscriber from exercising any other
rights which they have pursuant to this Section 20 or otherwise
pursuant to this Agreement in connection with such a dispute;
provided, however, that once a dispute has been submitted to
arbitration, neither party shall pursue a remedy with respect to such
dispute unless such remedy is specifically delineated herein.
(b) Either party may terminate this Agreement as of the end of
the initial term by giving notice to the other party at least 90 days
prior to the end of the initial term. If neither party gives notice of
termination within the initial term, this Agreement will automatically
renew for subsequent terms as provided in Section 19. Either party may
terminate this Agreement after the initial term upon 90 days prior
notice.
(c) UVEST may immediately suspend performance under this
Agreement, and may thereafter terminate this Agreement pursuant to the
procedures set forth in this Section 20(c), in the event of a material
breach by Subscriber in the performance of any material
15
agreement made by Subscriber under this Agreement, including, without
limitation, any failure of Subscriber to comply in any material
respect with any of the manuals identified in Section 12 hereof. UVEST
shall promptly notify Subscriber of the grounds for any such
suspension. Subscriber shall have 30 days following such notice to
resolve the matter(s) specified therein to UVEST's satisfaction prior
to any termination of the Agreement. If Subscriber fails to resolve
any such matter(s) within the prescribed time and UVEST does not agree
in writing to extend the period for resolution of any such matter(s),
UVEST may terminate this Agreement upon the expiration of such 30-day
period. In addition, UVEST may terminate this Agreement upon notice to
Subscriber if Subscriber directly or indirectly offers or makes
available Securities brokerage or broker-dealer services or Securities
investment advisory products or services.
(d) Subscriber may terminate this Agreement pursuant to the
procedures set forth in this Section 20(d), in the event of a material
breach by UVEST in the performance of any material agreement made by
UVEST under this Agreement. Subscriber shall promptly notify UVEST of
the grounds for any such termination. UVEST shall have 30 days
following such notice to cure the breach specified herein. If UVEST
fails to cure any such breach within such 30-day period and Subscriber
does not agree in writing to extend the period fOr cure of such breach
or UVEST does cure such breach but the same breach occurs within 90
days from the original breach, Subscriber may terminate this Agreement
upon the expiration of such 30-day period or upon the occurrence of
such second breach. Subscriber shall have the additional rights to
terminate this Agreement provided in Section 7(a) hereof
(e) At any point during the Initial Term or in subsequent terms,
subscriber may opt to terminate this agreement and exercise the UVEST
Service Bureau Agreement (Attachment A).
(f) Certain federal and state regulatory authorities may require
the termination of this Agreement on behalf of UVEST or Subscriber. In
the event of such a termination, whether made on behalf of UVEST or
Subscriber, (i) neither party hereto shall have any liability to the
other for such termination except to the extent such termination
results from the failure of one party to satisfy its obligations
hereunder, in which case such failing party shall be liable to the
other party to the extent it otherwise would have been liable for such
failure, and (ii) certain provisions of this Agreement, as specified
in Section 25 hereof, shall survive such termination as provided
herein.
(g) In the event that UVEST or Subscriber terminates this
Agreement or a governmental authority requires the termination of this
Agreement, (i) Subscriber shall immediately cease representing itself
as a participant in the UVEST Program, discontinue use of all UVEST
materials and all materials bearing the UVEST logo, service xxxx or
trademark; and (ii) Subscriber shall return to UVEST all records
relating to UVEST's brokerage accounts, all UVEST procedures and
compliance manuals and all UVEST forms and documents and shall so
certify in writing to UVEST within ten days of the date of
termination.
16
(h) Upon the termination of this Agreement by either UVEST,
Subscriber or any governmental authority, neither UVEST nor Subscriber
shall interfere with the decision of any customer or Dual Employee
regarding his brokerage accounts or employment, respectively.
Subscriber acknowledges that UVEST shall not be deemed to be
interfering with any customer as a result of UVEST performing its
obligations or sending customary notices with respect to any customer
or any such customer's accounts. UVEST agrees to cooperate in the
transfer of records relating to customer accounts to the Subscriber or
a broker/dealer designated by the Subscriber. After termination of
this Agreement, UVEST shall not provide information with respect to
such accounts to any other broker/dealer or financial institution nor
shall information with respect to such accounts be used by UVEST after
such transfer.
(i) Nothing in this Agreement shall be deemed or construed to
create a partnership or joint venture between the Subscriber and
UVEST. The relationship between such parties is only contractual in
nature.
(j) UVEST will not engage in market-making with respect to any
Securities.
21. UVEST Trademark; No License or Right to Use. Subscriber recognizes
and acknowledges that UVEST is a registered service xxxx and a registered
trademark of UVEST. Subscriber is not granted a license or right to use
UVEST's UVEST service xxxx or trademark. Subscriber shall not use the UVEST
service xxxx or trademark in any manner whatsoever without the prior
written consent of UVEST and any use of the UVEST service xxxx or trademark
by Subscriber pursuant to such written consent shall comply in all respects
with the terms thereof.
22. Additional Representations and Warranties of Subscriber.
Subscriber represents and warrants to UVEST that (i) Subscriber has full
legal right, power and authority to enter into and perform this Agreement;
(ii) this Agreement has been duly authorized, executed and delivered by
Subscriber and constitutes the legal, valid and binding agreement of
Subscriber; and (iii) no consent, approval, authorization or order of any
governmental agency or authority, except (A) those previously obtained by
Subscriber, disclosed to UVEST and in full force and effect, and (B) those
which have been disclosed to UVEST in writing and are to be obtained by
Subscriber, is required in connection with the transactions contemplated by
this Agreement on the part of Subscriber. Subscriber agrees to use its best
efforts to obtain all consents, approvals, authorizations and orders
necessary in connection with its performance under this Agreement which
have not been obtained as of the date hereof. Subscriber agrees that once
all of such consents, approvals, authorizations and orders have been
obtained, it will certify such fact to UVEST in writing. Subscriber further
acknowledges that UVEST shall not perform its obligations pursuant hereto
until it receives such certification. Subscriber further represents and
warrants that, to the extent permitted by law, it shall use its best
efforts, upon request by UVEST, to verify any information or
representations in the possession of Subscriber made by one of its
depositors or customers, or any other potential customer of UVEST,
contained or set forth in an Application for Account or any other
questionnaire submitted by such potential customer to UVEST in conjunction
with the opening or attempted opening of an account with UVEST. Subscriber
further represents that, except as may otherwise be required by law, it
shall keep confidential all information
17
not generally available to the public which it may acquire as a result of
this Agreement regarding the business or affairs of UVEST, or any of its
affiliates, and further acknowledges that this covenant shall survive the
termination of this Agreement until such information shall become generally
available to the public.
23. Representations and Warranties of UVEST. UVEST represents and
warrants to Subscriber that (i) UVEST has full legal right, power and
authority to enter into and perform this Agreement; (ii) this Agreement has
been duly authorized, executed and delivered by UVEST and constitutes the
legal, valid and binding agreement of UVEST; (iii) UVEST has obtained all
consents, approvals, authorizations and orders of governmental agencies or
authorities required in connection with the transactions contemplated by
this Agreement on the part of UVEST; including, without limitation, receipt
from the Securities and Exchange Commission of a "no-action letter," dated
November 24, 1992, which ("no-action letter") has not been modified or
rescinded as of the date hereof, (iv) UVEST is registered as a
broker-dealer and an investment adisor under federal and state securities
laws and is a member of the NASD and, during the term of this Agreement,
UVEST will maintain such registrations and membership as required by
applicable law. UVEST further represents that, except as may otherwise be
required by law, it shall keep confidential all information not generally
available to the public which it may acquire as a result of this Agreement
regarding the business or affairs of Subscriber, or any of its affiliates,
and further acknowledges that this covenant shall survive the termination
of this Agreement until such information shall become generally available
to the public.
24. Notices. All notices, requests, approvals, consents or other
communications required or permitted to be delivered hereunder shall be in
writing, delivered personally or forwarded by certified mail, postage
prepaid, to the address set forth on the signature page hereof and shall be
deemed duly given when so personally delivered or three business days after
the date of deposit in a mail box or other U.S. Postal Service depository
outside the control of the sender. Either party may from time to time
designate in writing any other address to which such notices, requests and
other communications shall be sent. Until any such change, such notices,
requests and other communications shall be sent to the address of the
appropriate party as set forth on the final page of this Agreement.
25. Compliance with Interagency Statement. Notwithstanding any
provision contained in this Agreement to the contrary, UVEST shall cause
all aspects of the UVEST Program (including, without limitation,
designation of the UVEST Centers in Subscriber's locations, training and
compensation of Dual Employees and Non-Dual Employee, manner and content of
disclosures to customers and advertising and promotional activities) to be
conducted in accordance and conformity with the Interagency Statement on
Retail Sales of Non-deposit Investment Products, dated February 15, 1994,
published by the Board of Governors of the Federal Reserve System, the
Office of the Comptroller of the Currency, the Federal Deposit Insurance
Corporation and the Office of Thrift Supervisions, as such statement has
been and hereafter may be amended from time to time (the "Interagency
Statement"). In accordance with their responsibilities under Interagency
Statement and various other laws, rules, regulations and policies of their
respective regulatory agencies as in effect from time to time, Subscriber
and its affiliate depository institutions on whose premises the activities
18
contemplated by this Agreement are conducted may from time to time review
the sales and other activities of the Dual Employees and the other
operations of the UVEST Centers to confirm that such activities and
operations are being conducted in a manner consistent with such Interagency
Statement and any such laws, rules, regulations and policies, and in
connection therewith to review such records of UVEST as the Subscriber or
such affiliate deems necessary or appropriate to evaluate such compliance.
Any such review or investigation shall not relieve UVEST from its
obligations hereunder to operate all aspects of the UVEST Program in
accordance with such Interagency Statement and any such additional laws,
rules, regulations and policies.
26. Miscellaneous.
(a) This Agreement and the materials incorporated herein by
reference constitute the entire understanding of the parties with
respect to its subject matter. Neither party may assign this Agreement
(either voluntarily or by operation of law) without the prior written
consent of the other party, except that UVEST, or Subscriber to the
extent permitted by applicable law, may assign its rights under this
Agreement to a subsidiary or affiliate. This Agreement shall be
binding upon, inure to the benefit of, and be enforceable by and
against, the successors and permitted assigns of each of the parties,
subject only to the rights of federal and state regulatory authorities
to terminate this Agreement under certain circumstances. This
agreement and all provisions hereof are for the sole and exclusive
benefit of the parties hereto and, in the case of Subscriber, any
subsidiary or affiliate depository institutions on whose premises the
activities contemplated hereby may be conducted. Nothing expressed or
referred to in this Agreement will be construed to give any other
person any legal or equitable right, remedy or claim under or with
respect to this Agreement or any provision hereof.
(b) Subscriber recognizes and acknowledges that failure by
Subscriber to comply with the provisions of this Agreement regarding
permitted use by Subscriber of the UVEST logo, service xxxx and
trademark, UVEST equipment, signs, materials, furnishings and supplies
and items bearing the UVEST logo, service xxxx or trademark may result
in damage to UVEST for which monetary compensation would be
inadequate. Subscriber therefore agrees that UVEST shall be entitled
to specific performance of Subscriber's obligations pursuant to such
provisions.
(c) Neither party shall be liable to the other for special,
indirect or consequential damages (including lost revenues or lost
profits) arising out of any breach of its obligations under this
Agreement other than the parties' respective obligations to indemnify
each other pursuant to Section 9 hereof.
(d) Except to the extent specified in Section 20(a) hereof, the
enumeration herein of specific remedies shall not be exclusive of any
other remedies and no single, partial or other exercise of any such
right, power, remedy or privilege shall preclude the further exercise
thereof or the exercise of any other right, power, remedy or
privilege. Any delay or failure by any party to this Agreement to
exercise any right, power, remedy or privilege herein contained,
19
or now or hereafter existing under any applicable statute or law,
shall not be construed to be a waiver of such right, power, remedy or
privilege or to limit the exercise of such right, power, remedy or
privilege.
(e) Neither Subscriber nor UVEST shall hold itself out as an
agent of the other or any of the subsidiaries or the companies
controlled directly or indirectly by or affiliated with the other.
(f) This Agreement may be modified only by a writing signed by
both parties to this Agreement. Such modification shall not be deemed
a cancellation of this Agreement.
(g) In the event that any court of competent jurisdiction
declares invalid any provision of this Agreement, such invalidity
shall have no effect on the other provisions hereof, which shall
remain valid and binding and in full force and effect, and to that end
the provisions of this Agreement shall be considered severable;
provided, however, that should any court of competent jurisdiction
declare invalid any material provision of this Agreement, severance of
which would frustrate the purpose of this Agreement, such provision
shall not be severable, and this Agreement shall be voidable by either
party hereto.
(h) UVEST shall have each customer acknowledge in writing the
receipt of notice that (i) UVEST, and not Subscriber, is providing and
is responsible for the brokerage services being offered and (ii) UVEST
is not affiliated with Subscriber. Such notice and acknowledgment may
be a part of the customer's application for an account with UVEST.
(i) Subscriber, at a time mutually acceptable to Subscriber and
UVEST, may inspect those records of UVEST pertaining to commissions
and other revenue generated by the UVEST Centers in locations of
Subscriber or its affiliates.
(j) All such signs bearing the UVEST logo, service xxxx or
trademark shall remain the property of UVEST and shall be used by
Subscriber's locations only in connection with the UVEST Program and
the business conducted at the UVEST Centers.
(k) This Agreement has been accepted by UVEST in, and shall be
construed in accordance with the statutory and common laws of, the
State of Pennsylvania, except to the extent such laws may be preempted
by federal laws, rules or regulations.
(1) The headings preceding the text, articles and sections hereof
have been inserted for convenience and reference only and shall not be
construed to affect the meaning, construction or effect of this
Agreement.
(m) The provisions of Sections 9, 15 (to the extent such costs
are incurred prior to termination), 22 and 23 (to the extent such
Sections relate to confidentiality concerning
20
UVEST's or Subscriber's business), and 20(g), 26(b) and (c) hereof shall
survive the termination of this Agreement.
(n) This Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all
such counterparts shall together constitute but one and the same
instrument. It shall not be necessary to make proof of but one such
counterpart in any court of law having jurisdiction with regard to
this Agreement or any dispute arising pursuant hereto.
(o) Any list of Subscriber's customers, whether provided to UVEST by
Subscriber or compiled by UVEST in any other manner, shall be
considered the property of Subscriber and shall be held in strictest
confidence by UVEST. Any such list may not be sold or used for any
purpose other than those provided for and contemplated by this
Agreement, without first obtaining Subscriber's written approval.
(p) Each party hereto covenants and agrees that it will not permit a
Year 2000 problem in computer systems, software or equipment owned,
leased or licensed by it, its affiliates or subsidiaries to interfere
with its performance under this Agreement. The parties hereto will use
reasonable commercial efforts to cooperate and share information to
further comply with this Section 26 and to minimize the impact of any
Year 2000 problem on performance of this Agreement. Each party will
inform the other party of any circumstance indicating a possible
obstacle such compliance and the steps being taken to avoid or
overcome the obstacle.
Provided a party complies with this Section 26, it will not be liable
to the other party for any failure to perform obligations under the
Agreement to the extent that such failure arises from a Year 2000
problem (1) affecting one of the non-performing party's suppliers or
(2) beyond that party's reasonable control (such as, a Year 2000
problem affecting a government entity). In particular, such
non-performing party shall have no liability for any damages,
including direct, indirect, incidental, special, consequential,
punitive or exemplary damages.
A "Year 2000 problem" means a date-handling problem relating to the
Year 2000 date change that would cause a computer system, software or
equipment to fail to correctly perform, process and handle
date-related data and processes for these dates within and between the
twentieth and twenty-first centuries and all other centuries.
21
IN WITNESS WHEREOF, UVEST and Subscriber have executed this Agreement as of the
date set forth above.
UVEST FINANCIAL SERVICES BRYN MAWR BROKERAGE COMPANY
GROUP, INC. INC.
By [SIGNATURE APPEARS HERE] By [SIGNATURE APPEARS HERE]
----------------------------------- -------------------------------
Title PRESIDENT & CEO Title PRESIDENT & CEO
-------------------------------- -----------------------------
Address of UVEST for notices hereunder: Address of Subscriber for notices
hereunder:
UVEST Financial Services Group, Inc. Bryn Mawr Brokerage Company, Inc.
000 X. Xxxxx Xxxxxx, Xxxxx 0000 000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000 XxxxXxxx, XX 00000
Attention: Xxx Xxxxxx, President
22
UVEST FINANCIAL SERVICES GROUP, INC.
Brokerage Services Agreement
SCHEDULE 1
Revenue Sharing Payments
for
BRYN MAWR BROKERAGE COMPANY, INC.
Subscriber shall be entitled to the following percentage(s) of gross commissions
generated by the purchase or sale of Securities (as defined herein) through
registered representatives located in UVEST Centers in Subscriber's branches:
For monthly gross commissions of: Percentage* of gross commissions
Payable to Subscriber
$20,000 or less 75%
$20,001 and above 80%
*Percentages are applied only to the marginal increase in the stated
commissions.
Subscriber shall be entitled to the following percentage(s) of gross commissions
generated by the purchase or sale of Securities for large account cases as
defined below. At no point shall the commissions generated on large cases
contribute to the commission grid above.
Account case: Percentage of gross commissions
Principal Invested Payable to Subscriber
$2 M -$5 M 85%
$5 M- $1OM 87%
$10 M+ 89%
Subscriber shall be entitled to the following percentage(s) of gross commissions
generated by the purchase or sale of Variable Life for large account cases as
defined below. At no point shall the commissions generated on large cases
contribute to the commission grid above.
Account case: Percentage of gross commissions
Commission Generated Payable to Subscriber
$15,000 $30,000 85%
$30,001 - $40,000 87%
$40,001+ 89%
23
*Clearing Charges of $20 per transaction will be deducted from Subscriber's
revenue sharing payment on a monthly basis in accordance with the terms in
Section 7(b) of this Agreement. Clearing Charges will not be charged on
systematic investments after the initial transaction is made.
Subscriber shall be entitled to 20% of gross commissions, no clearing charges,
generated by the purchase or sale of Securities (as defined herein) under the
UVEST discount commission schedule
24
BROKERAGE SERVICES AGREEMENT
(Service Bureau Program)
(Attachment A)
THIS AGREEMENT, dated as of _______________________ is by and between
UVEST FINANCIAL SERVICES GROUP, INC., a North Carolina corporation doing
business as UVEST ("UVEST"), and the financial institution whose name appears on
the final page of this Agreement ("Subscriber").
THE PARTIES AGREE AS FOLLOWS:
1) Effective Date. This Agreement shall bind UVEST and Subscriber when
executed by an authorized representative of each party. The date of this
Agreement is referred to as the "Effective Date."
2) UVEST Services. UVEST is a broker-dealer registered with the Securities and
Exchange Commission ("SEC") and is a member of the National Association of
Securities Dealers, Inc., (NASD) and provides certain securities brokerage
services under its UVEST trademark.
3) Subscriber Services. Subscriber is a broker-dealer "registered with the
Securities and Exchange Commission and is a member of the National
Association of Securities Dealers, Inc.," and provides certain securities
brokerage services ("Subscriber Services") under its trademark to the
general public through the operation of Subscriber service centers
("Subscriber Centers") located within Subscriber's branches.
4) Subscriber's Obligations. Subscriber shall use all reasonable efforts to
provide the facilities and personnel, to cooperate with UVEST and to do all
other acts and things required by this Agreement to be provided or done by
Subscriber. Subscriber further agrees that it shall not permit any other
broker-dealer to offer brokerage services at any of Subscriber's locations
during the term of this Agreement.
Subscriber agrees to be bound by, and to comply in all material respects
with, the Participants' Compliance Manual, a current copy of which UVEST
has provided or will provide to Subscriber and which, as it may be modified
from time to time in accordance with the purposes set forth in Section 6
hereof, is incorporated in and made a part of this Agreement.
Subscriber shall provide Subscriber's affiliate depository institutions
with policies and procedures for monitoring the Subscriber Services
conducted at Subscriber Centers in accordance with the Interagency
Statement on Retail Sales of Non-deposit Investment Products, dated
February 15, 1994, published by the Board of Governors of the Federal
Reserve System, the Office of the Comptroller of the Currency, the Federal
Deposit Insurance Corporation and the Office of Thrift Supervisions, as
such statement has been and hereafter may be amended from time to time (the
"Interagency Statement"). In accordance with Subscriber's responsibilities
under the Interagency Statement and various other laws, rules, regulations
and policies of their respective regulatory agencies as in effect from time
to time, Subscriber and its affiliate depository institutions on whose
premises the activities contemplated by this Agreement are conducted will
from time to time review the sales and other activities of the Registered
Representatives and the other operations of the Subscriber Centers to
confirm that such activities and operations are being conducted in a manner
consistent with such Interagency Statement and any such laws, rules,
regulations and policies.
1
5) UVEST Program. The "UVEST program" consists of the following services,
which UVEST shall provide:
a) Brokerage Services. UVEST is subject to all applicable laws, rules,
regulations and procedures, including those of the Securities and Exchange
Commission ("SEC") and the National Association of Securities Dealers, Inc.
("NASD"), and subject to the terms and conditions hereof. As used herein,
the term "Security" or "Securities" shall have the meaning set forth in the
Securities Exchange Act of 1934, as amended, and shall also include all
other financial instruments or products included in the UVEST Program from
time to time, including without limitation, debt and equity instruments,
mutual funds, variable annuities, fixed annuities and other financial
instruments and products approved by appropriate regulatory authorities
from time to time for sale (directly or indirectly) by financial
institutions. UVEST may retain one or more clearing brokers to perform
order execution, billing, collection, account surveillance and other
services for UVEST, which are customarily performed by clearing brokers.
UVEST shall give notice to Subscriber of any change in the clearing brokers
it uses to perform such services and will endeavor to give such notice
prior to such change. In order to execute such purchase and sale orders,
UVEST shall establish and maintain cash and/or margin accounts for
customers, such accounts to be maintained as accounts of UVEST/Subscriber
or its clearing broker. UVEST reserves the right, in its sole discretion,
to refuse to open any account or to execute any order by any customer for
the purchase or sale of a Security, which right shall not be unreasonably
exercised. Subscriber agrees that such right shall not have been
unreasonably exercised if UVEST believes in good faith that such an account
or such Security or transaction is not appropriate or suitable for such
customer.
b) Marketing, Education, Research and Technical Services. UVEST will provide
Subscriber with compliance, operations, and technical services, which will
include:
i) advice and assistance regarding, and review and approval of,
Subscriber-sponsored advertising and promotion of Subscriber services;
ii) post-qualification training of subscriber's Registered
Representatives;
iii) compliance and procedures manuals, and administration thereof, for
the operation of the UVEST Program;
iv) advice and assistance regarding each Subscriber Center, including
designation and segregation from the remainder of the lobby area at
such location of Subscriber;
v) advice and assistance regarding UVEST's news/quote terminal,
sales technology and related services;
vi) advice and assistance regarding all other accessories, equipment
and supplies required to make the Subscriber Centers at
Subscriber's locations operational;
vii) centralized investment research;
viii)broker service support/help desk;
ix) phone-in service for use by Subscriber's customers during
non-regular business hours;
2
x) monitoring of compliance with applicable laws, rules and regulations
and with UVEST manuals, rules, procedures and instructions at the
Subscriber Centers;
xi) monitoring of relevant laws, rules and regulations affecting the
UVEST Program and the operation of the Subscriber Centers;
xii) trading and disbursement of Revenue Sharing Payments (as defined
below); and general marketing assistance for the promotion of
Subscriber's services;
xiii)general marketing assistance for the promotion of Subscriber's
services;
xiv) such other services as may from time to time be outlined in the UVEST
compliance or sales support manuals.
6) Modification of UVEST Program. The UVEST Program is a uniform program owned
and operated by UVEST. Subject to the provisions of Section 22 hereof,
UVEST may modify the UVEST Program from time to time for the intended
purpose of meeting applicable regulatory requirements, making the UVEST
Program more effective, efficient, economical or competitive, or adapting
to new technology or conditions.
7) Revenue Sharing Payments.
a) UVEST shall make payments to Subscriber with respect to all Securities
transactions, which occur at, or are attributable to, the Subscriber
Centers operated at Subscriber's locations ("Revenue Sharing Payments"), in
accordance with Schedule 1 ("Revenue Sharing Payments") attached to this
Agreement. Revenue Sharing Payments represent reimbursement for
compensation of the Registered Representatives and payment for the use of
the facilities and equipment of Subscriber or its affiliate depository
institutions, as applicable. The Board of Directors of UVEST may, after
careful consideration, amend the Revenue Sharing Payments schedule from
time to time during the term of this Agreement. UVEST shall notify
Subscriber not less than 30 days in advance of any reduction in the
percentage of Revenue Sharing Payments, which reduction shall take effect
on the date specified in such notice; provided, no decrease in the
percentage of Revenue Sharing Payments shall be permitted within 12 months
after the Effective Date; and provided, further, Subscriber may terminate
this Agreement by giving notice to UVEST within 30 days following UVEST's
notice of any such reduction in the percentage of Revenue Sharing Payments.
If Subscriber gives a notice of termination to UVEST pursuant to this
Section 7(a), this Agreement will terminate 60 days following such notice
and the reduction in the percentage of Revenue Sharing Payments shall not
apply to Revenue Sharing Payments payable to Subscriber prior to such
termination.
b) UVEST reserves the right to deduct from Revenue Sharing Payments (i) all
costs, expenses, charges and fees, if any, payable by Subscriber to UVEST
pursuant to this Agreement and (ii) an amount equal to all losses, costs
and expenses, if any, incurred by UVEST, directly or indirectly, as the
result of the failure of any customer of a Subscriber Center operated at
any of Subscriber's locations to meet any obligation to deliver any funds
or Securities, to meet any margin call or to meet any other obligation
pursuant to UVEST's agreement to perform Securities brokerage services for
Subscriber; provided that UVEST shall use such efforts as are customary in
the securities brokerage business to mitigate the losses, costs and
expenses referred to in clause (ii) above prior to making any deduction
therefor from Subscriber's Revenue Sharing Payments. UVEST shall make
Revenue Sharing Payments to Subscriber by the 15th day of the following
calendar month with respect to all Securities transactions for which it has
received commissions through the end of the immediately preceding calendar
month. Each Revenue Sharing Payment shall be accompanied by a complete
record of
3
transactions and, if applicable, of any costs, expenses, charges or fees
incurred by Subscriber and deducted from such Revenue Sharing Payment.
8) Registered Representatives. At the Subscriber Centers operated at
Subscriber's locations, Securities transactions shall be effected, and
investment advice and recommendations shall be disseminated, only by
Registered Representatives of Subscriber, who shall at all times be
registered and qualified with the SEC, the NASD, and all other applicable
federal and state securities and insurance laws (including without
limitation investment advisor laws):
a) Compensation. Subscriber shall pay the compensation of the Registered
Representatives in amounts to be determined by Subscriber. Except to the
extent permitted by federal and state securities and banking laws, rules
and regulations, neither UVEST nor Subscriber shall compensate any
Registered Representative, directly or indirectly, based upon the volume of
Securities transactions, commissions or Revenue Sharing Payments generated
by any Registered Representative or the Subscriber Center. Any portion of a
Registered Representative's compensation based on such a volume shall be
subject to the mutual approval of Subscriber and UVEST. Subscriber agrees
to maintain payroll and bonus records for each Registered Representative,
to withhold payroll taxes from the compensation of each Registered
Representative, and to remit payroll taxes for each Registered
Representative (including the employer's portion of any such taxes) to the
appropriate government agencies in compliance with applicable law. UVEST
shall have the right to inspect the payroll and bonus records maintained by
Subscriber for each Registered Representative.
b) Control by Subscriber. Subscriber shall exercise control of the Registered
Representatives with respect to their conduct of Securities brokerage and
investment advisory activities at the Subscriber Centers and shall cause
their conduct in such capacity to be governed in all respects
i) by UVEST/Subscriber compliance and procedures manuals and all other
manuals, procedures, rules and instructions of UVEST and Subscriber,
current copies of which UVEST and Subscriber will provide to
Registered Representatives, and
ii) by applicable laws, rules, and regulations and policies of applicable
regulatory agencies, all as in effect from time to time.
Notwithstanding the above, it is understood and agreed to between
UVEST and Subscriber that, to the extent that the loss is not
attributable to the negligence or other fault of either party, if any
Registered Representative embezzles or otherwise steals from UVEST,
UVEST or from Subscriber or any of its affiliates, Subscriber or such
affiliate shall bear such loss.
c) Discipline. Each Registered Representative shall be subject to discipline
by Subscriber and by various federal and state regulatory authorities,
Securities exchanges, clearing corporations or associations, associations
of Securities brokers and dealers and certain other entities having
jurisdiction over the operation of the Subscriber Centers and the conduct
of the Registered Representatives. Subscriber and UVEST shall cooperate in
all respects in connection with the enforcement of any sanctions imposed by
any such entities against any Registered Representative.
d) Hiring of Employees.
i) Without the prior consent of UVEST, Subscriber agrees that during the
term of this Agreement and for a period of one year after its
termination, Subscriber will not, directly or indirectly, hire,
recruit, solicit or induce or advise or recommend to any other person
that such other person hire, recruit, solicit or induce any person
employed by UVEST, its subsidiaries or affiliates, to
4
terminate his or her employment with UVEST, its subsidiaries or
affiliates. Without violating the provisions of this Section 8(d),
Subscriber may hire, solicit or recommend the employment of any
person previously employed by UVEST, its subsidiaries or affiliates,
if the hiring, solicitation or recommendation occurs more than 60
days after the effective date of such person's termination of
employment with UVEST, its subsidiaries or affiliates.
ii) Without the prior consent of Subscriber, UVEST agrees that during
the term of this Agreement and for a period of one year after its
termination, UVEST will not, directly or indirectly, hire, recruit,
solicit or induce or advise or recommend to any other person that
such other person hire, recruit, solicit or induce any person
employed by Subscriber, its subsidiaries or affiliates, to terminate
his or her employment with Subscriber, its subsidiaries or
affiliates. Without violating the provisions of this Section 8(d)
UVEST may hire, solicit or recommend the employment of any person
previously employed by Subscriber, its subsidiaries or affiliates,
if the hiring, solicitation or recommendation occurs more than 60
days after the effective date of such person's termination of
employment with Subscriber, its subsidiaries or affiliates.
9) Indemnification.
a) UVEST shall, provided Subscriber satisfies its obligations hereunder,
defend, indemnify and hold harmless Subscriber (and each person or entity
which controls Subscriber within the meaning of Section 20(a) of the
Securities Exchange Act of 1934, as amended or Section 15 of the
Securities Act of 1933, as amended), its affiliate depository
institutions and their respective directors, officers, agents and
employees (other than Registered Representatives to the extent provided
in Section 9(b) below), against any and all losses, claims, damages,
liabilities, actions, costs or expenses to which such indemnified party
may become subject to the extent such losses, claims, damages,
liabilities, actions, costs or expenses arise out of or are based upon:
i) The failure of UVEST to remain a member of the NASD or to remain a
duly licensed broker-dealer under federal and state securities laws;
ii) any violation of federal or state securities or insurance laws
(including, without limitation, laws relating to the registration or
qualification as a broker-dealer, investment advisor or insurance
agent) by UVEST, its officers, its agents or its employees;
iii) any breach, default or violation of, under or with respect to any of
UVEST's duties, obligations, representations, warranties or
covenants contained in this Agreement; or
iv) any negligence, gross negligence, recklessness or willful or
intentional misconduct of, or violation of any law by, UVEST or any
UVEST employee.
UVEST agrees to maintain, in full force and effect, insurance in amounts
sufficient to meet its indemnification obligations under this Section
9(a), in such form as shall be established by the UVEST Board of
Directors from time to time.
b) In no event, however, shall such indemnification inure exclusively to the
personal benefit of any Registered Representative whose action or failure
to act was the cause of or resulted in the violation of federal or state
securities or insurance laws and in no event shall such indemnification
result in the payment of moneys to any such Registered Representative.
c) Subscriber shall, provided UVEST satisfies its obligations hereunder,
defend, indemnify and hold harmless UVEST (and each person or entity
which controls UVEST within the meaning of Section
5
20(a) of the Securities Exchange Act of 1934, as amended or Section 15 of
the Securities Act of 1933, as amended), its directors, officers, agents
and employees against any and all losses, claims, damages, liabilities,
actions, costs or expenses to which such indemnified party may become
subject to the extent such losses, claims, damages, liabilities, actions,
costs or expenses arise out of or are based upon:
i) the failure of Subscriber to remain a member of the NASD or to
remain a duly licensed broker dealer under federal and state
securities laws;
ii) the failure of Subscriber to comply with applicable federal and
state laws relating to Subscriber or its affiliated depository
institutions;
iii) the failure of Subscriber to maintain payroll and bonus records for
each Registered Representative, to withhold payroll taxes from the
compensation of each Registered Representative, and to remit payroll
taxes for each Registered Representative (including the employer's
portion of any such taxes) to the appropriate government agencies in
compliance with applicable law;
iv) the acts or omissions of Subscriber's employees, except to the
extent where such employee was told to perform such action or to
refrain from so acting by any employee of UVEST;
v) any breach, default or violation of, under or with respect to any of
Subscriber's duties, obligations, representations, warranties or
covenants contained in this Agreement; or
vi) any negligence or gross negligence, recklessness or willful or
intentional misconduct of Subscriber or any Subscriber employee or
agent.
d) Promptly after receipt by an indemnified party under this Section 9 of
notice of any claim or the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
party to this Agreement from which it is seeking indemnification under
this Section 9, notify such other party in writing of such claim or the
commencement of such action, but the failure to notify the indemnifying
party will not relieve the indemnifying party of any liability it may
have to any indemnified party, except to the extent that the indemnifying
party demonstrates that its liability for such action is prejudiced by
the indemnifying party's failure to give notice. In case any such action
is brought against any indemnified party' and such indemnified party
notifies UVEST or Subscriber, as appropriate, of the commencement
thereof, as provided herein, UVEST or Subscriber, as appropriate, shall
be entitled to participate therein and, at its option, assume the defense
thereof. Upon assumption by UVEST or Subscriber, as appropriate, of the
defense of such action, UVEST or Subscriber, as appropriate, will cease
to be liable to such indemnified party under this Section 9 for any legal
or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof.
e) An indemnified party hereunder shall settle a claim for which it has
requested or intends to request indemnification only with the consent of
the indemnifying party.
10) Separation of Businesses. Subscriber and Subscriber's affiliate
depository institutions shall each maintain strict and total separation
of their businesses, including separation of records and of physical
facilities, and shall conduct its business so as not to lead to confusion
between the business conducted by Subscriber and its affiliate depository
institutions and the Subscriber Program conducted at each Subscriber
Center.
6
11) Subscriber Costs and Expenses.
a) Direct costs and expenses. Subscriber shall be directly responsible
for the costs and expenses associated with the following items in
connection with the operation of Subscriber Centers at Subscriber's
locations:
i) the furnishings, accessories and equipment necessary to establish
the Subscriber Center, including a news/quote terminal;
ii) the service and maintenance for the sales technology terminal;
iii) equity investment research employed in the Subscriber Center;
iv) telephones and other operating equipment;
v) Registered Representative compensation and related costs,
including, without limitation, recruitment costs, salary and
benefits, travel (including but not limited to any travel
associated with pre-qualification or post-qualification
training), cost of pre-qualification training and prescribed
pre-examination course, examination fees and filing fees and
corporate stationery and business cards;
vi) Registered Representative post-qualification sales training
materials;
vii) Recruitment costs, salary and benefits for any support personnel;
viii)All other costs associated with the operation of the Subscriber
Centers at Subscriber's locations not specified in Section 12
hereof Subscriber shall pay all costs and expenses set forth in
this Section 11 directly to third-party vendors or to UVEST or to
the Registered Representative(s), in accordance with UVEST's
applicable standard procedures and fee schedules, each as in
effect from time to time.
b) Indirect Costs and Expenses. With approval from Subscriber, UVEST
shall from time to time furnish to each Subscriber Center promotional
literature in reasonable quantities determined by UVEST. Subscriber
shall pay for such items furnished in excess of such reasonable
quantities and/or requiring customization at a charge to Subscriber
equal to UVEST's cost for such items, which shall be based upon the
cost of development, production or purchase, shipping, handling,
billing and any applicable taxes.
12) UVEST Costs and Expenses. UVEST shall be directly responsible for the
following costs and expenses in connection with the operation of the
UVEST Program:
a) all costs associated with the operation of UVEST's offices other than
at Subscriber's locations, including centralized investment research,
national and regional inquiry/help desks for use by Subscriber's
Registered Representatives and phone-in service for use by UVEST
customers during non-regular business hours;
b) all costs associated with the recruitment, training, qualification and
employment by UVEST of all UVEST employees;
c) UVEST-sponsored advertising and promotion;
7
d) technical assistance program;
e) compliance and supervision; and
f) field sales support and related travel expenses.
13) Advertising and Promotion. Subscriber shall secure UVEST's prior
written approval of all advertising and promotional materials, if any
prepared by or on behalf of Subscriber which mention UVEST or the
UVEST Program. UVEST and Subscriber shall also meet prior to or as
soon as possible after the opening of the first Subscriber Center at
one of Subscriber's locations to develop a comprehensive six-month
business plan to promote and develop Subscriber's Program. Thereafter,
UVEST and Subscriber shall meet approximately every six months to
review the performance of the business plan for the prior six months
and to develop a new business plan for the succeeding six months.
UVEST and Subscriber shall share the cost of such meetings equally.
14) Bankruptcy Changes in Control, etc. Any party hereto (the "defaulting
party") shall give the other party hereto prompt written notice in the
event that such defaulting party
a) liquidates or dissolves;
b) makes an assignment for the benefit of creditors, becomes insolvent or
is unable to pay its debts as they mature, files a voluntary petition
in bankruptcy or a petition, answer or consent seeking reorganization
or readjustment of its indebtedness under applicable bankruptcy or
insolvency laws, consents to the appointment of a receiver or trustee
for all or a substantial part of its property or takes corporate or
other action for the purpose of effecting any of the foregoing;
c) has filed against it a petition for proceedings in bankruptcy or for
its reorganization or for the readjustment of its indebtedness under
applicable bankruptcy or insolvency laws or has a receiver or trustee
appointed for it or for all or a substantial part of its property; or
d) experiences a change in control through merger, consolidation or
reorganization in a transaction in which such party is not the
surviving entity, a sale of substantially all of its assets or, to the
extent known by such defaulting party, the acquisition by any person
or related group of 25% or more of its outstanding equity interest.
The non-defaulting party shall have the right to terminate this
Agreement upon the happening of any such event.
15) Term. This Agreement shall have an initial term of two years and shall
automatically renew for subsequent terms of one year, subject to
termination as provided in Section 16 hereof.
16) Arbitration; Termination; Suspension.
a) UVEST and Subscriber shall work together in good faith to resolve any
dispute arising between them. If UVEST and Subscriber cannot resolve
such dispute after a good faith attempt to do so, either party may
submit such dispute to arbitration in Philadelphia, Pennsylvania such
arbitration to be conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The
arbitration award shall be final and binding. Judgment upon the award
rendered may be entered in any court having jurisdiction over the
party against which the award is rendered. Nothing in this Section
16(a) shall prevent UVEST or Subscriber from exercising any other
rights which they have pursuant to this Section 16 or otherwise
pursuant to this Agreement in connection with such a dispute;
provided, however, that once a dispute has been submitted to
arbitration, neither
8
party shall pursue a remedy with respect to such dispute unless such
remedy is specifically delineated herein.
b) Either party may terminate this Agreement as of the end of the initial
term by giving notice to the other party at least 90 days prior to the
end of the initial term. If neither party gives notice of termination
within the initial term, this Agreement will automatically renew for
subsequent terms as provided in Section 15. Either party may terminate
this Agreement after the initial term upon 90 days prior notice.
c) UVEST may immediately suspend performance under this Agreement, and
may thereafter terminate this Agreement pursuant to the procedures set
forth in this Section 16(c), in the event of the breach by Subscriber
in the performance of any material agreement made by Subscriber under
this Agreement, including, without limitation, any failure of
Subscriber to comply in any material respect with any of the manuals
identified in Section 4 hereof. UVEST shall promptly notify'
Subscriber of the grounds for any such suspension. Subscriber shall
have 30 days following such notice to resolve the matter(s) specified
therein to UVEST's satisfaction prior to any termination of the
Agreement. If Subscriber fails to resolve any such matter(s) within
the prescribed time and UVEST does not agree in writing to extend the
period for resolution of any such matter(s), UVEST may terminate this
Agreement upon the expiration of such 30-day period. In addition,
UVEST may terminate this Agreement upon notice to Subscriber if
Subscriber directly or indirectly offers or makes available Securities
brokerage or broker-dealer services or Securities investment advisory
products or services.
d) Subscriber may terminate this Agreement pursuant to the procedures set
forth in this Section 16(d) in the event of a material breach by UVEST
in the performance of any material agreement made by UVEST under this
Agreement. Subscriber shall promptly notify UVEST of the grounds for
any such termination. UVEST shall have 30 days following such notice
to cure the breach specified herein. If UVEST fails to cure any such
breach within such 30-day period and Subscriber does not agree in
writing to extend the period for cure of such breach or UVEST does
cure such breach but the same breach occurs within 90 days from the
original breach, Subscriber may terminate this Agreement upon the
expiration of such 30-day period or upon the occurrence of such second
breach. Subscriber shall have the additional rights to terminate this
Agreement provided in Section 16 hereof.
e) Certain federal and state regulatory authorities may require the
termination of this Agreement on behalf of UVEST or Subscriber. In the
event of such a termination, whether made on behalf of UVEST or
Subscriber,
i) neither party hereto shall have any liability to the other for
such termination except to the extent such termination results
from the failure of one party to satisfy' its obligations
hereunder, in which case such failing party shall be liable to
the other party to the extent it otherwise would have been liable
for such failure, and
ii) certain provisions of this Agreement, as specified in Section 22
hereof, shall survive such termination as provided herein.
f) In the event that UVEST or Subscriber terminates this Agreement or a
governmental authority requires the termination of this Agreement,
i) Subscriber shall immediately cease representing itself as a
participant in the UVEST Program, discontinue use of all UVEST
materials and all materials bearing the UVEST logo, service xxxx
or trademark; and
9
ii) Subscriber shall return to UVEST all procedures and compliance
manuals and all UVEST forms and documents and shall so certify
in writing to UVEST within ten days of the date of termination.
g) Upon the termination of this Agreement by UVEST, Subscriber or any
governmental authority, neither UVEST nor Subscriber shall interfere
with the decision of any customer regarding his brokerage account(s).
Subscriber acknowledges that UVEST shall not be deemed to be
interfering with any customer as a result of UVEST performing its
obligations or sending customary notices with respect to any customer
or any such customers accounts. UVEST agrees to cooperate in the
transfer of records relating to customer accounts to the Subscriber or
a broker/dealer designated by the Subscriber. After termination of
this Agreement, UVEST shall not provide information with respect to
such accounts to any other broker/dealer or financial institution nor
shall information with respect to such accounts be used by UVEST after
such transfer.
g) Nothing in this Agreement shall be deemed or construed to create a
partnership or joint venture between the Subscriber and UVEST. The
relationship between such parties is only contractual in nature.
17) UVEST Trademark; No License or Right to Use. Subscriber recognizes and
acknowledges that UVEST is a registered service xxxx and a registered
trademark of UVEST. Subscriber is not granted a license or right to
use UVEST's UVEST service xxxx or trademark. Subscriber shall not use
the UVEST service xxxx or trademark in any manner whatsoever without
the prior written consent of UVEST and any use of the UVEST service
xxxx or trademark by Subscriber pursuant to such written consent shall
comply in all respects with the terms thereof.
18) Additional Representations and Warranties of Subscriber. Subscriber
represents and warrants to UVEST that
a) Subscriber has full legal right, power and authority to enter into and
perform this Agreement;
b) this Agreement has been duly authorized, executed and delivered by
Subscriber and constitutes the legal, valid and binding agreement of
Subscriber; and
c) no consent, approval, authorization or order of any governmental
agency or authority, except those previously obtained by Subscriber,
disclosed to UVEST and in full force and effect, and those which have
been disclosed to UVEST in writing and are to be obtained by
Subscriber, is required in connection with the transactions
contemplated by this Agreement on the part of Subscriber.
Subscriber agrees to use its best efforts to obtain all consents,
approvals, authorizations and orders necessary in connection with its
performance under this Agreement which have not been obtained as of
the date hereof. Subscriber represents and warrants that
(i) Subscriber is duly registered and in good standing as a
broker-dealer with the Securities and Exchange Commission (SEC)
and is a member firm in good standing of the National Association
of Securities Dealers, Inc. (NASD).
10
(ii) Subscriber has all requisite authority, whether arising under
applicable federal or state laws or the rules and regulations of
any securities exchange or regulatory authority to which
Subscriber is subject, to enter into this Agreement and to retain
the services of Pershing in accordance with the terms hereof.
Subscriber further represents that, except as may otherwise be
required by law, it shall keep confidential all information not
generally available to the public which it may acquire as a result of
this Agreement regarding the business or affairs of UVEST, or any of
its affiliates, and further acknowledges that this covenant shall
survive the termination of this Agreement until such information shall
become generally available to the public.
19) Representations and Warranties of UVEST. UVEST represents and warrants
to Subscriber that
a) UVEST has full legal right, power and authority to enter into and
perform this Agreement;
b) this Agreement has been duly authorized, executed and delivered by
UVEST and constitutes the legal, valid and binding agreement of UVEST;
c) UVEST has obtained all consents, approvals, authorizations and orders
of governmental agencies or authorities required in connection with
the transactions contemplated by this Agreement on the part of UVEST;
including, without limitation, receipt from the Securities and
Exchange Commission of a "no-action letter," dated November 24, 1992,
which ("no-action letter") has not been modified or rescinded as of
the date hereof,
d) UVEST is registered as a broker-dealer and an investment advisor under
federal and states securities laws and is a member of the NASD and,
during the term of this Agreement, UVEST will maintain such
registrations and membership as required by applicable law.
UVEST further represents that, except as may otherwise be required by
law, it shall keep confidential all information not generally
available to the public which it may acquire as a result of this
Agreement regarding the business or affairs of Subscriber, or any of
its affiliates, and further acknowledges that this covenant shall
survive the termination of this Agreement until such information shall
become generally available to the public.
20) Notices. All notices, requests, approvals, consents or other
communications required or permitted to be delivered hereunder shall
be in writing, delivered personally or forwarded by certified mail,
postage prepaid, to the address set forth on the signature page hereof
and shall be deemed duly given when so personally delivered or three
business days after the date of deposit in a mail box or other U.S.
Postal Service depository outside the control of the sender. Either
party may from time to time designate in writing any other address to
which such notices, requests and other communications shall be sent
Until any such change, such notices, requests and other communications
shall be sent to the address of the appropriate party as set forth on
the final page of this Agreement.
21) Compliance with Interagency Statement. Notwithstanding any provision
contained in this Agreement to the contrary, UVEST shall cause all
aspects of the UVEST Program to be conducted in accordance and
conformity with the Interagency Statement.
22) Miscellaneous.
a) This Agreement and the materials incorporated herein by reference
constitute the entire understanding of the parties with respect to its
subject matter. Neither party may assign this
11
Agreement (either voluntarily or by operation of law) without the
prior written consent of the other party, except that UVEST or
Subscriber, to the extent permitted by applicable law, may assign its
rights under this Agreement to a subsidiary or affiliate. This
Agreement shall be binding upon, inure to the benefit of, and be
enforceable by and against, the successors and permitted assigns of
each of the parties, subject only to the rights of federal and state
regulatory authorities to terminate this Agreement under certain
circumstances. This agreement and all provisions hereof are for the
sale and exclusive benefit of the parties hereto and, in the case of
Subscriber, any subsidiary or affiliate depository institutions on
whose premises the activities contemplated hereby may be conducted.
Nothing expressed or referred to in this Agreement will be construed
to give any other person any legal or equitable right, remedy or claim
under or with respect to this Agreement or any provision hereof.
b) Neither party shall be liable to the other for special, indirect or
consequential damages (including lost revenues or lost profits)
arising out of any breach of its obligations under this Agreement
other than the parties' respective obligations to indemnify each other
pursuant to Section 9 hereof.
c) Except to the extent specified in Section 16(a) hereof, the
enumeration herein of specific remedies shall not be exclusive of any
other remedies and no single, partial or other exercise of any such
right, power, remedy or privilege shall preclude the further exercise
thereof or the exercise of any other right, power, remedy or
privilege. Any delay or failure by any party to this Agreement to
exercise any right, power, remedy or privilege herein contained, or
now or hereafter existing under any applicable statute or law, shall
not be construed to be a waiver of such right, power, remedy or
privilege or to limit the exercise of such right, power, remedy or
privilege.
d) Neither Subscriber nor UVEST shall hold itself out as an agent of the
other or any of the subsidiaries or the companies controlled directly
or indirectly by or affiliated with the other.
e) Only writing signed by both parties to this Agreement may modify this
Agreement Such modification shall not be deemed a cancellation of this
Agreement.
f) In the event that any court of competent jurisdiction declares invalid
any provision of this Agreement, such invalidity shall have no effect
on the other provisions hereof, which shall remain valid and binding
and in full force and effect, and to that end the provisions of this
Agreement shall be considered severable; provided, however, that
should any court of competent jurisdiction declare invalid any
material provision of this Agreement, severance of which would
frustrate the purpose of this Agreement, such provision shall not be
severable, and this Agreement shall be voidable by either party
hereto.
g) Subscriber, at a time mutually acceptable to Subscriber and UVEST, may
inspect those records of UVEST pertaining to commissions and other
revenue generated by the Subscriber Centers in locations of Subscriber
or its affiliates.
h) This Agreement has been accepted by UVEST in, and shall be construed
in accordance with the statutory and common laws of, the State of
Pennsylvania, except to the extent such laws may be preempted by
federal laws, rules or regulations.
i) The headings preceding the text, articles and sections hereof have
been inserted for convenience and reference only and shall not be
construed to affect the meaning, construction or effect of this
Agreement.
12
j) The provisions of Sections 9, 12 (to the extent such costs are
incurred prior to termination), 18 and 19 (to the extent such Sections
relate to confidentiality concerning UVEST's or Subscriber's
business), hereof shall survive the termination of this Agreement.
k) This Agreement may be executed in any number of counterparts; each of
which when so executed and delivered shall be an original, but all
such counterparts shall together constitute but one and the same
instrument It shall not be necessary to make proof of but one such
counterpart in any court of law having jurisdiction with regard to
this Agreement or any dispute arising pursuant hereto.
l) Any list of Subscriber's customers, whether provided to UVEST by
Subscriber or compiled by UVEST in any other manner, shall be
considered the property of Subscriber and shall be held in strictest
confidence by UVEST. Any such list may not be sold or used for any
purpose other than those provided for and contemplated by this
Agreement, without first obtaining Subscriber's written approval.
m) Each party hereto covenants and agrees that it will not permit a Year
2000 problem in computer systems, software or equipment owned, leased
or licensed by it, its affiliates or subsidiaries to interfere with
its performance under this Agreement The parties hereto will use
reasonable commercial efforts to cooperate and share information to
further comply with this Section 26 and to minimize the impact of any
Year 2000 problem on performance of this Agreement. Each party will
inform the other party of any circumstance indicating a possible
obstacle such compliance and the steps being taken to avoid or
overcome the obstacle.
Provided a party complies with this Section 26, it will not be liable
to the other party for any failure to perform obligations under the
Agreement to the extent that such failure arises from a Year 2000
problem (1) affecting one of the non-performing party's suppliers or
(2) beyond that party's reasonable control (such as, a Year 2000
[problem affecting a government entity). In particular, such
non-performing party shall have no liability for any damages,
including direct, indirect, incidental, special, consequential,
punitive or exemplary damages.
A "Year 2000 problem" means a date-handing problem relating to the
Year 2000 date change that would cause a computer system, software or
equipment to fail to correctly perform, process and handle
date-related data and processes for these dates within and between the
twentieth and twenty-first centuries and all other centuries.
IN WITNESS WHEREOF, UVEST and Subscriber have executed this Agreement
as of the date set forth above.
UVEST FINANCIAL SERVICES BRYN MAWR BROKERAGE COMPANY
GROUP, INC.
By___________________________ By_____________________________
Title________________________ Title__________________________
13
Address of UVEST for notices hereunder:
UVEST Financial Services Group, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: Xxx Xxxxxx, President and COO
Address of Subscriber for notices hereunder:
Bryn Mawr Brokerage Company, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxxxx 00000
Attention: Xxx Xxxxx
14
UVEST FINANCIAL SERVICES GROUP, INC.
Brokerage Services Agreement
SCHEDULE 1
Revenue Sharing Payments
Subscriber shall be entitled to the following percentage(s) of gross commissions
generated by the purchase or sale of Securities (as defined herein) through
registered representatives located in UVEST Centers in Subscriber's branches:
For monthly gross commissions of: Percentage* of gross commissions
Payable to Subscriber
$20,000 or less 75%
$20,001 and above 80%
*Percentages are applied only to the marginal increase in the stated
commissions.
Subscriber shall be entitled to the following percentage(s) of gross commissions
generated by the purchase or sale of Securities for large account cases as
defined below. At no point shall the commissions generated on large cases
contribute to the commission grid above.
Account case: Percentage of gross commissions
Principal Invested Payable to Subscriber
$2 M-$5M 85%
$5 M-$lOM 87%
$10 M+ 89%
Subscriber shall be entitled to the following percentage(s) of gross commissions
generated by the purchase or sale of Variable Life for large account cases as
defined below. At no point shall the commissions generated on large cases
contribute to the commission grid above.
Account case: Percentage of gross commissions
Commission Generated Payable to Subscriber
$15,000 $30,000 85%
$30,001 - $40,000 87%
$40,00l+ 89%
*Clearing Charges of $20 per transaction will be deducted from Subscriber's
revenue sharing payment on a monthly basis in accordance with the terms in
Section 7(b) of this Agreement. Clearing Charges will not be charged on
systematic investments after the initial transaction is made.
15
