AGREEMENT effective as of the 5th day of April, 1995 (the "Effective Date")
by and between Automated Securities Clearance Ltd., a New Jersey corporation,
having its principal office at 000 Xxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000
("ASC"), and Knight Securities, a LP ______________ , having its principal
office at 000 Xxxxxxxxxx Xxxxxxxxx, 00xx Xxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000
("Customer").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, ASC has developed and owns a computer software program for the
financial services industry, which program is an order entry and execution
system as more fully described in Schedule "A" attached hereto (the "BRASS
System"); and
WHEREAS, Customer desires to obtain a non-exclusive, non-transferable,
permanent license from ASC to use the BRASS System for the use of Customer.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and promises set forth below, the parties hereto agree as follows:
1. Grant of License. Subject to the terms and conditions of this
----------------
Agreement, ASC hereby grants to Customer, and Customer hereby accepts from ASC,
a non-transferable, non-exclusive license in perpetuity (subject to termination
as provided in Section 3 and Section 11 hereof) to use the BRASS System (the
"License") for the use of Customer. ASC shall provide to Customer all
documentation required to allow Customer to use and operate the BRASS System in
accordance with, and subject to, all of the terms,
conditions and provisions of this Agreement. The BRASS System, together with all
source codes, object codes and all enhancements, adaptations and modifications
thereof, and any related documentation of any type whatsoever is sometimes
hereinafter referred to collectively as the "Licensed Software."
Modifications or enhancements may be made by Customer to any Licensed
Software, without ASC's prior written consent; provided, however, that ASC shall
have no obligation to provide maintenance, software support, or daily
operations support (including, without limitation, the maintenance, software
support and daily operations support services to be provided by ASC under this
Agreement) with respect to all or any portion of the BRASS System and/or the
Licensed Software so modified or enhanced, unless ASC (in its sole and absolute
discretion) has consented in writing to such modifications or enhancements prior
to their being made to the Licensed Software.
2. Computer Equipment.
------------------
(a) Customer hereby agrees to acquire, at its sole cost and
expense, the data communications and terminal equipment necessary to utilize the
BRASS System and support its trading operation, including, without limitation,
Sun Microsystems computer hardware and system software (i.e., AIX, Sybase)
(collectively, the "Computer Equipment"). The Computer Equipment will be
delivered and installed at Customer's premises located at 000 Xxxxxxxxxx
Xxxxxxxxx, 00xx xxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000 ("Customer's Premises").
For the purpose of enabling ASC to perform its
2
obligations under Sections 8 and 9 hereof, Customer agrees to provide ASC, at
Customer's sole cost and expense, with a dedicated line to access the BRASS
System at Customer's premises which will enable ASC from its facility in
Weehawken, New Jersey, to diagnose a promblem with the operation of the Brass
System at Customer's Premises.
(b) Site Preparation. Customer, at its sole cost and expense,
----------------
with the advice and assistance of ASC, will prepare the space at Customer's
Premises at which the Computer Equipment will be installed. The location of such
installation shall be selected sensitive to power, environmental HVAC and
related concerns necessary for the proper operation of the Computer Equipment.
3. Term. The term of the License granted hereunder (the "License
----
Term") shall commence on the Effective Date and continue in perpetuity, unless
this Agreement is terminated pursuant to Section 11 hereof, in which event the
License Term will terminate; provided, however, that Customer may terminate this
Agreement at anytime after the one (1) year anniversary of the Acceptance Date
(as defined in Section 7 (e)) upon six (6) months prior written notice to ASC,
in which event the License Term will terminate.
4. Fees.
----
(a) License Fee. In consideration for the License granted by ASC
-----------
to Customer hereunder and for other good and
3
valuable consideration, Customer hereby agrees to pay ASC a fee (the "License
Fee") in accordance with the following:
(i) Commencing with the third (3rd) day that Customer has
utilized the BRASS System for the actual processing of its trading operation
(hereinafter referred to as the "Utilization Date") and continuing for each
month, or part thereof, until ASC provides Customer with application programming
interfaces which will enable Customer to receive order, trade and profit and
loss data from the BRASS System and to send order data to the BRASS System (the
"APIs"), the sum of $3,000 per month for the use of the BRASS System by up to
three (3) traders of Customer; $4,000 for four (4) traders; $5,000 for (5)
traders; $6,000 for (6) traders; and $15,000 per month for the use of the BRASS
System by more than six (6) traders of Customer, until such time ASC provides
Customer with the APIs, whereupon the License Fee shall be increased to $17,500
per month until the fifth (5th) year anniversary of the Utilization Date; and
(ii) Commencing with the month immediately following and
continuing for each month during the subsequent sixth (6th) and seventh (7th)
years, the sum of $8,750 per month.
The License Fee shall be payable on the first (1st) day of each month
during this seven (7) year period. After the expiration of this 7 year
period, and provided that Customer has performed all of its obligations
hereunder, Customer will have the License in perpetuity without any further
obligation to pay the License Fee unless this Agreement is terminated pursuant
to Section 11 hereof, in which event the License Term will terminate.
4
(b) Software Support and Maintenance Fee. In consideration for
------------------------------------
the software support and the maintenance service provided hereunder, Customer
hereby agrees to pay ASC a fee in the sum of Fourteen Thousand ($14,000) Dollars
on the Utilization Date and on the first (1st) day of each month thereafter
during the Maintenance Term (as hereinafter defined) and each renewal thereof
(the "Maintenance Fee").
(c) Daily Operations Support Fee. In consideration for the Daily
----------------------------
Operations Support (as hereinafter defined) to be provided by ASC hereunder,
Customer hereby agrees to pay ASC a fee in sum of Six Thousand ($6,000) Dollars
on the Utilization Date and on the first (1st) day of each month thereafter
during the Daily Operations Support Term (as hereinafter defined) and each
renewal thereof (the "Daily Operations Fee").
(d) Initial Fee. Customer will pay to ASC a non-refundable fee
-----------
in the sum of Forty Thousand ($40,000) Dollars upon the execution of this
Agreement as an advance payment for the License Fee (the "Initial Fee").
(e) Late Charges. In the event that payment of any one or more
------------
of the Initial Fee, the License Fee, the Maintenance Fee and the Daily
Operations Fee is received more than thirty (30) days after the date any such
fee is due pursuant hereto, Customer shall pay a late payment charge of one and
one-half (1 1/2%) percent per month on the unpaid balance of such fee.
(f) CPI Increase. The Maintenance Fee and the Daily Operations
------------
Fee shall each be subject to annual increases based upon the percentage increase
in the CPI from the first year
5
of the Maintenance Term and Daily Operations Support Term as compared to
subsequent years of these terms. ASC reserves the right to charge Customer with
a compounded CPI increase for those years in which it does not impose a CPI
increase on a Customer for either or each of the Maintenance Fee and the Daily
Operations Fee.
The term "CPI" as used in this Article shall mean the United
States Consumer Price Index, All Urban Customers, for the Northeastern New
Jersey-New York, New York Metropolitan Area, United States City Average, All
Items Category, Based 1982-1984 = 100. If the CPI is no longer calculated
utilizing the 1982-1984 = 100 base at the time any adjustment is to be
calculated pursuant to this Section, then the CPI figure shall be calculated by
referring to the CPI figure for the categories set forth above, and converting
that figure to the 1982-1984 = 100 base by utilizing the conversion factor
published by the Bureau of Labor Statistics.
5. Proprietary Rights; Non-Disclosure. All Licensed Software is, and
----------------------------------
shall remain, the exclusive property of ASC. Customer has no right to use the
Licensed Software for any purpose other than that expressly stated in this
Agreement or authority to sublicense, sell, disclose, reveal or otherwise
communicate except as permitted by Section 6 hereof), directly or indirectly,
information about the BRASS System or any Licensed Software to any third party.
6
6. Confidentiality; Source Code.
----------------------------
(a) ASC and Customer shall acquire and hold in a fiduciary
capacity for each other all information, knowledge and data relating to or
concerned with each organization's operations, sales, customers, business and
affairs, and shall not, at any time, use such information, knowledge and/or data
(hereinafter "Confidential Information") other than for the purpose of
performing their respective obligations hereunder, or disclose or divulge any
Confidential Information to any person, firm, partnership limited liability
company, corporation or other entity other than those officers, directors and
employees (collectively "Employees") of ASC or Customer who have a need to know
such Confidential Information and only if such Employees agree in writing to be
bound by the restrictions of Section 5 hereof and this Section 6. Confidential
Information does not include information which is (i) in the public domain, (ii)
within the custody or control of either party hereto before the Effective Date,
or (iii) disclosed to either party hereto by a third party who is legally
entitled to make such disclosure.
(b) ASC will provide Customer with a copy of the BRASS System
source codes and the related documentation which comprises the Licensed Software
for the sole purpose of off-site storage. Customer acknowledges and agrees that
the Licensed Software is the property of and a trade secret of ASC and
constitutes "Confidential Information" hereunder. Customer shall be fully
responsible for the actions of each of its Employees with respect to maintaining
the confidentiality of the Licensed
7
Software, whether or not any such individual is or was acting within the scope
of his or her employment while breaching such confidentiality. Simultaneously
with the execution of this Agreement, Customer, on its own behalf and on behalf
of its Employees, will execute a Confidentiality Agreement in the form of that
set forth in Schedule "B" attached hereto (the "Confidentiality Agreement"). Any
non-Employee of Customer (i.e., consultants, agents, representatives) shall
execute a Confidentiality Agreement in a form substantially similar to Schedule
"B", prior to his, her or its access to the Licensed Software or any part
thereof.
7. ESTABLISHMENT OF BRASS SYSTEM FOR CUSTOMER.
------------------------------------------
(a) Programming Services. As soon as practicable after the
--------------------
installation of all the Computer Equipment, ASC will (i) deliver the entire
BRASS System to Customer at Customer's Premises, (ii) provide Customer with
application programming interfaces which will enable Customer to receive order,
trade and profit and loss data from the BRASS System, (iii) provide Customer
with an application programming interface which will enable Customer to send
order data to the BRASS System, and (iv) prior to the full implementation of the
BRASS System, ASC will demonstrate the operation of the BRASS System to Customer
at Customer's Premises.
ASC will provide Customer with an interface to Customer's Trimark System by
the 45th day after the Effective Date or on such date Customer is ready to test
the interface, whichever is later. If ASC is unable to complete this interface
to the Trimark System
8
by the date due to no fault of Customer, then Customer may declare ASC to be in
default pursuant to Section 11(b) hereof.
ASC will provide Customer with the capability to support a "third market"
trading operation within six (6) months from Customer's written request therefor
to ASC in accordance with the attached schedule.
(b) Training and Education. ASC will provide comprehensive
----------------------
training and education to Customer's order entry and execution terminal
operators on the actual use of the BRASS System; provided, however, that
Customer will bear the expenses for travel and accommodations incurred by ASC in
providing such training and education.
(c) Daily Operations Training on the BRASS System. In connection
---------------------------------------------
with the expiration of the Daily Operations Support Term and all renewals
thereof, ASC will provide comprehensive training and education to Customer's
data processing personnel on the structure, design and internal coding
conventions of the BRASS System applications, provided, however, that Customer
will bear the expenses for travel and accommodations incurred by ASC in
providing such training and education.
(d) Obligations of Customer. In connection with the
-----------------------
establishment of the BRASS System, Customer shall perform the following
obligations:
(i) provide accurate and complete data to ASC for
conversion to the BRASS System; and
9
(ii) assign Customer personnel adequately trained in the
appropriate technical skills to assist in the implementation of the BRASS
System.
(e) Acceptance of BRASS System. The BRASS System shall be
--------------------------
deemed accepted by Customer on a date (the "Acceptance Date") which will occur
on the earlier of: (i) the first day that Customer is able to execute not less
than five thousand (5,000) trades per day through the BRASS System; or (ii) the
one hundred eightieth (180th) day after the Utilization Date. Customer shall use
its best efforts to achieve execution through the BRASS System of no less than
five thousand (5,000) trades per day until such time as the BRASS System has
been deemed accepted in accordance with this Section 7(e).
8. Maintenance; Software Support.
-----------------------------
(a) Subject to earlier termination pursuant to Section 3, 8(d)
or 11 hereof, the term during which the agreements set forth in this Section 8
shall remain in effect (the "Maintenance Term") shall commence on the
Utilization Date and shall continue until the first anniversary of the
Acceptance Date; provided, however, that Customer shall have the option to renew
the Maintenance Term for successive one (1) year periods, subject to earlier
termination pursuant to Section 3, 8(d) or 11 hereof, by giving ASC notice of
its exercise of said option within thirty (30) days prior to the expiration of
the then current Maintenance Term or renewal thereof, as the case may be.
10
(b) In consideration of Customer's payment of the Maintenance
Fee, ASC shall provide Customer with maintenance service with respect to the
BRASS System during the Maintenance Term and each renewal thereof, upon the
following terms and conditions:
(i) During the Daily Operations Support Term. During the
----------------------------------------
Daily Operations Support Term (as hereinafter defined) and each renewal thereof,
ASC shall monitor the operation of the BRASS System to detect problems with such
operation. In the event that ASC detects such a problem, it will endeavor to
determine whether the problem relates to a problem with (A) the Computer
Equipment, (B) non-BRASS System Software utilized in connection with the BRASS
System (the "System Software") or (C) the application of the BRASS System to
Customer's trading operation (a "BRASS Application Problem"). ASC will notify
Customer if the problem relates to a problem with the Computer Equipment or the
System Software. Customer shall be responsible for resolving any problems with
the Computer Equipment, and ASC will reasonably cooperate in the resolution of
the same. ASC will exercise reasonable efforts to correct System Software
problems arising at ASC's premises. In the event that it is unable to resolve
any such System Software problem after exercising reasonable efforts, it shall
notify Customer, whereupon Customer shall be responsible for resolving such
System Software problem. ASC will use reasonable efforts to correct all BRASS
Application Problems. The foregoing obligations of ASC shall be in addition to
its obligation to provide second level desk support as provided in Sections
11
9(b)(i)(d) and 9(b)(iii) hereof. Customer shall fully cooperate with ASC's
maintenance efforts, including, without limitation, by giving ASC prompt
telephonic notice of any and all problems in the operation of the BRASS System
that Customer detects or of which Customer is aware, and by taking whatever
action at Customer's Premises that ASC reasonably requests in order to correct
problems with the operation of the BRASS System.
(ii) When ASC is No Longer Providing Daily Operation
-----------------------------------------------
Support. Upon the expiration of the Daily Operations Support Term (as
-------
hereinafter defined) and all renewals thereof, ASC shall provide maintenance
services in accordance with the following:
(A) First Level Support. Customer will designate
-------------------
certain qualified employees to be responsible for determining whether a problem
in the operation of the BRASS System relates to a problem with the Computer
Equipment or the System Software or whether the problem is a BRASS Application
Problem. Customer will be solely responsible for resolving problems with the
Computer Equipment and the System Software. Upon Customer's request. ASC will
assist Customer in determining the nature of the problem. If it is determined
that the problem is a BRASS Application Problem, then Customer will promptly
provide telephonic notice to ASC, who will then respond with Second Level
Support.
(B) Second Level Support. ASC will designate, with
--------------------
Customer's consent, which consent will not be unreasonably withheld, certain
qualified employees as "Second Xxxxx
00
Support Representatives" to receive notices from Customer with respect to a
BRASS Application Problem.
Customer will have access to Second Level Support
Representatives to answer questions with respect to a BRASS Application Problem
by way of a telephone hot-line which will be available during the hours of 7:00
a.m. through 5:30 p.m. Eastern Time on weekdays, excluding holidays during which
the stock exchanges are closed ("Telephone Hot-line Support"). There will also
be 24-hour emergency beeper service.
If the BRASS Application Problem is causing a complete
system level service interruption, ASC will have fifteen (15) minutes from its
receipt of telephonic notice from Customer requesting Second Level Support to
solve the problem. Should ASC be unable to solve the problem within 15 minutes,
it shall dispatch its Second Level Support Representative to Customer's
Premises. Said Second Level Support Representative will use reasonable efforts
to promptly correct the problem.
(c) After the expiration of the Maintenance Term and each
renewal thereof, Customer shall only be entitled to receive maintenance service
from ASC with respect to the BRASS System on a time-charge basis and, in
addition, Customer shall be responsible to Pay for ASC's cost of all materials
used by ASC in connection with its providing such maintenance service. Payment
of the foregoing by Customer shall be made upon receipt of an invoice for the
same from ASC and shall be subject to assessment of a late payment charge as
provided in Section 4)e) hereof.
13
(d) In the event that (i) Customer fails to comply with the
provisions of Sections 5 and 6 hereof, (ii) Customer fails to make any payment
due under this Agreement within ten (10) business days after ASC gives Customer
notice of Customer's failure to make such payment, or (iii) Customer fails to
comply with any other material provision of this Agreement within thirty (30)
days after ASC gives Customer notice of Customer's non-compliance, then the
obligations of ASC under this Section 8 shall terminate; provided, however, that
Customer shall be obligated to pay ASC for any then unpaid Maintenance Fee
payments.
(e) During the Maintenance Term and each renewal thereof, ASC
will provide Customer with any standard BRASS System Software reports, updates
and enhancements, regulatory or otherwise, which it creates pertaining to both
the source codes and object codes therefor.
9. DAILY OPERATIONS SUPPORT.
------------------------
(a) Subject to earlier termination pursuant to Section 3, 9(c)
or 11 hereof, the term during which the agreements set forth in this Section 9
shall remain in effect (the "Daily Operations Support Term") shall commence on
the Utilization Date and shall continue until the first anniversary of the
Acceptance Date; provided, however, that Customer shall have the option to
renew the Maintenance Term for successive one (1) year periods, subject to
earlier termination pursuant to Section 3, 9(c) or 11 hereof, by giving ASC
notice of its exercise of said option within
14
thirty (30) days prior to the expiration of the then current Daily Operations
Support Term or renewal thereof, as the case may be.
(b) In consideration of Customer's payment of the Daily
Operations Fee, ASC shall provide Customer with daily operations support of the
BRASS System during the Daily Operations Support Term and each renewal thereof,
upon the following terms and conditions ("Daily Operations Support"):
(i) In connection with the daily operation of Customer's
BRASS System, ASC agrees to undertake responsibility for the following:
(A) the morning start-up operation of Customer's BRASS
System;
(B) process monitoring of Customer's BRASS System;
(C) the evening batch cycle of Customer's BRASS
System;
(D) second level desk support for Customer's BRASS
System;
(E) support for up to six external correspondent
circuits at no additional charge, and for each additional correspondent circuit
thereafter as to which Customer gives ASC thirty (30) days' prior notice, at the
rate of One Hundred Fifty ($150.00) Dollars per circuit, per month (charges for
all such additional correspondents, if any, shall be added to and paid as part
of the Daily Operations Support Fee); and
15
(F) the provision of on-site operation support in
the event that the primary and secondary communication links between ASC and
Customer become inoperable.
(ii) With respect to the process monitoring of Customer's
BRASS System, upon detection thereof, ASC agrees to undertake to correct a BRASS
Application Problem with Customer's BRASS System, including, for example,
responding to Customer's BRASS System error messages that are delivered to
Customer's printer; provided, however, that, in the event that ASC is unable to
correct such a BRASS Application Problem, nothing provided herein shall afford
Customer with any rights, or subject ASC to any liability, beyond that which is
provided for in this Agreement.
(iii) Second level desk support for Customer's BRASS System
shall consist of the following:
(A) ASC will designate certain qualified employees
as "Second Level Support Representatives" to receive notices from Customer with
respect to a BRASS Application Problem with the order entry and execution
terminals located at Customer's Premises.
(B) Customer will have access to Second Level
Support Representatives to answer questions with respect to such BRASS
Application Problems by ??? of Telephone Hot-Line Support.
(C) If the BRASS Application Problem is causing
complete terminal service interruption, ASC will have fifteen (15) minutes
from its receipt of telephonic notice from Customer requesting Second Level
Support to solve the problem.
16
Should ASC be unable to solve the problem within 15 minutes, it shall dispatch
its Second Level Support Representative to Customer's Premises. Said Second
Level Support Representative will use reasonable efforts to promptly correct the
problem.
(iv) Notwithstanding anything to the contrary set forth in
this Section 9, in connection with the daily operation of Customer's BRASS
System, Customer agrees to retain responsibility for the following:
(A) network support for Customer's BRASS System;
(B) hardware and operating system support for
Customer's BRASS System; and
(C) primary desk support for Customer's BRASS
System.
(v) If in connection with the performance of ASC's
obligations under this Section 9 hereof, ASC discovers any problems with
Customer's BRASS System relating to the network, hardware, operating system or
primary desk for Customer's BRASS System, ASC agrees to notify the designated
representative of Customer as soon as is reasonably practicable after ASC's
discovery of any such problem.
(c) If the event that (i) Customer fails to comply with the
provisions of Sections 5 and 6 hereof, (ii) Customer fails to make any payment
due under this Agreement within ten (10) business days after ASC gives Customer
notice of Customer's failure to make such payment, or (iii) Customer fails to
comply with any other material provision of this Agreement within thirty (30)
days
17
after ASC gives Customer notice of Customer's non-compliance; then the
obligations of ASC under this Section 9 shall terminate, provided, however, that
Customer shall be obligated to pay ASC for any then unpaid Daily Operations Fee
payments.
10. BRASS PERFORMANCE STANDARDS.
---------------------------
(a) Defined Terms. For purposes of this Section 10 the following
-------------
definitions shall apply:
(i) the "Actual Performance Rate" shall mean a percentage
equal to 100% minus (A) (1) the total number of minutes during a given
Performance Month (as hereinafter defined) that the BRASS Transmission Service
failed to operate minus (2) the Permitted Operational Failures (as hereinafter
defined) for such Performance Month, divided by (B) the total number of minutes
of such Performance Month.
(ii) a "Monthly Performance Failure" shall mean the failure
of the BRASS Transmission Service to operate at less than the Target Performance
Rate (as hereinafter defined) during any Performance Month.
(iii) a "Performance Day" shall mean any weekday during a
Performance Month, except holidays during which the stock exchanges are closed,
commencing at 9:30 A.M. and ending at 4:00 P.M. There are 390 minutes in each
Performance Day.
(iv) a "Performance Month" shall mean all of the
Performance Days in a given month during the Term.
18
(v) the "Permitted Operational Failures" for any given
Performance Month shall mean a number of minutes equal to the total number of
minutes during such Performance Month that the BRASS Transmission Service failed
to operate due to events which would constitute a force majeure under Section 15
hereof.
(vi) the "Target Performance Rate" shall mean the satisfactory
operation of the BRASS Transmission Service for 99.6% or more of the total
number of minutes during any given Performance Month.
(b) Performance Rebate. In the event that a Monthly Performance
------------------
Failure occurs during any Performance Month, Customer shall be entitled to
receive a rebate off the License Fee for such Performance Month (the "Monthly
Performance Rebate"); provided, however, that in no event shall the Monthly
Performance Rebate exceed the amount of the License Fee for such Performance
Month. The Monthly Performance Rebate for such Performance Month shall be
calculated by multiplying the License Fee for such Performance Month by a
percentage equal to five (5) times difference between the Target Performance
Rate and the Actual Performance Rate. For purposes of making and calculations
pursuant to this Section 10(b), each fraction of a minute shall be rounded off
to the nearest whole minute.
(c) Notice of Claim for Monthly Performance Rebate. It is a condition
----------------------------------------------
precedent to Customer's entitlement to receive any Monthly Performance Rebate
pursuant to this Section 10 that Customer provide ASC with written notice of its
claim within ten (10) business days after the end of the month for
19
which Customer claims a Monthly Performance Rebate. Such notice shall specify
the exact date, time and duration (rounded off to the nearest minute) of each
operational failure of the BRASS Transmission Service included in the
calculation of the Monthly Performance Failure giving rise to such Performance
Rebate and shall set forth the calculations used to determine the Monthly
Performance Rebate for the applicable period.
(d) Terminal Servers. It is a condition precedent to Customer's
----------------
entitlement to receive any Monthly Performance Rebate pursuant to this Section
10 that Customer maintain at Customer's Premises during the Term and any renewal
term hereof adequate terminal server capability. The failure by Customer to
comply with this condition precedent shall render this entire Section 10 null
and void.
(e) Disputes. If after receiving Customer's notice of claim for
--------
a Monthly Performance Rebate, ASC shall dispute any specified operational
failure of the BRASS Transmission Service, and/or the Monthly Performance
Rebate, ASC shall promptly give notice of such dispute to Customer, and,
thereafter, ASC and Customer shall work in good faith towards a mutually
acceptable resolution of such dispute. In the event that ASC and Customer are
unable to reach such a mutually acceptable resolution within ten (10) business
days after ASC receives Customer's notice of claim for the Monthly Performance
Rebate, the dispute shall be referred for resolution by a mutually acceptable
third party whose determination as to such dispute shall be final.
20
(f) Award of Performance Rebate. Any Monthly Performance Rebate
---------------------------
required to be given under this Section 10 shall be credited to Customer's
account with ASC on the later of (i) the due date of the License Fee for the
second month next succeeding the month with respect to which the Monthly
Performance Rebate is claimed, or (ii) the date that any dispute as to
Customer's claim for such Monthly Performance Rebate has been resolved in
accordance with Section 10(c) hereof, or shall be paid to Customer by such date
if the License to use the BRASS System granted hereunder or if this Agreement
has been terminated. On or after the date that Customer's account is so
credited, Customer shall be entitled to offset from the amount of any License
Fee which is then or thereafter due to ASC the amount of such credit. The
Monthly Performance Rebate will be awarded solely in accordance with the
foregoing provisions of this Section 10(f).
(g) Customer Remedies Still Apply. Nothing provided in this
-----------------------------
Section 10 shall be deemed to preclude the termination of this Agreement under
Section 11(b) hereof.
11. Defaults and Termination.
------------------------
(a) Events of Default by Customer. Customer shall be in default
-----------------------------
under this Agreement if any of the following occur:
(i) Customer fails to make any payment to ASC hereunder
after the expiration of ten (10) days written notice;
21
(ii) Customer fails to comply with the provisions of
Sections 5 and 6 hereof; or
(iii) Customer fails to perform or comply with any other
term or condition of this Agreement and such non-performance or non-compliance
has not been cured after the expiration of thirty (30) days prior written
notice.
In the event of a default by Customer, ACS may, upon notice to
Customer, declare all amounts owed to it hereunder immediately due and payable
and/or declare this Agreement to be terminated. The election by ASC of either or
both of such remedies shall not exclude the election of any other remedy.
(b) Events of Default by ASC. ACS shall be in default under this
------------------------
Agreement if it fails to perform or comply with any material term or condition
of this Agreement and such non-performance or non-compliance has not been cured
after the expiration of thirty (30) days prior written notice from Customer. In
the event of such a default, this Agreement will be terminated and neither party
shall have any further liability to the other, except Customer shall pay to ASC
all due but unpaid amounts which it is required to pay under this Agreement.
(c) Upon termination of this Agreement, the License granted
hereunder to use the BRASS System will automatically terminate without the
requirement of any notice.
(d) Upon termination of this Agreement, for any reason
whatsoever, Customer shall immediately return and cause to be returned to ASC
all Licensed Software and all copies made thereof.
22
12. Warranties; Limitation of Liability; Remedies.
---------------------------------------------
(a) ASC warrants that it owns all the rights required to grant
this license to Customer. ASC does not warrant that the Licensed Software will
meet Customer's desired results or that any defects in the Licensed Software can
or will be corrected.
(b) ASC MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, INCLUDING,
BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE AND ALL SUCH OTHER WARRANTIES ARE HEREBY DISCLAIMED.
(c) THE COMMITMENTS SET FORTH IN THIS AGREEMENT ARE IN LIEU OF
ALL OTHER OBLIGATIONS OR LIABILITIES ON THE PART OF ASC FOR DAMAGE OR OTHER
RELIEF, INCLUDING, WITHOUT LIMITATION, SPECIAL, INDIRECT OR CONSEQUENTIAL
DAMAGES THAT IN ANY WAY ARISE FROM OR ARE IN CONNECTION WITH THE USE AND/OR
PERFORMANCE OF THE BRASS SYSTEM.
13. Taxes; Communication Costs.
--------------------------
(a) Taxes. The fees set forth in this Agreement and in any
-----
schedules attached hereto are exclusive of all sales or use taxes levied on the
License of the BRASS System or any of the services or support to be provided by
ASC hereunder, however designated and levied by any state, local or federal
government. Customer shall be solely responsible for the payment of such taxes
and the filing of any tax returns applicable thereto.
(b) Communication Costs. ASC will be solely responsible for the
-------------------
cost of the telephone line charges for the
23
NASDAQ Level I and CTCI lines, and dial-up charges up to Fifty ($50) Dollars per
month. Customer will be solely responsible for the NASDAQ and stock exchange
service charges associated with the implementation of the BRASS System, the cost
of the installation of the telephone lines and the leased line charges and dial
back-up charges from the ASC data center to Customer's processing facility and
trading location, and the cost of all ancillary services rendered by
third-parties in connection with Customer's use of the BRASS System. These
charges will be included in ASC's monthly invoice to Customer. A schedule of the
one-time installation charge for the telephone lines and the current fees
charged for the telephone lines and the current fees charged by third parties in
connection with the Customer's use of the BRASS System is set forth on Schedule
"C" attached hereto. The fees set forth on Schedule "C" are subject to
adjustment from time to time in the event the fees charged by such third parties
change, and additional third party fees may be added to Schedule "C" from time
to time in the event that new third party value-added services become available
in connection with the Customer's use of the BRASS Transmission Service.
14. Arbitration. Any controversy or claim arising out of, or relating
-----------
to, this Agreement, or the breach thereof, with the exception of any claim
arising out of, or relating to, Sections 5 and/or 6 hereof or any
Confidentiality Agreement executed pursuant thereto, or the breach of any of the
foregoing, shall be settled by arbitration in accordance with the Commercial
Arbitration rules of the American Arbitration Association, and
24
judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof.
15. Force Majeure. Neither party hereto shall be held responsible for
-------------
any failure or delay in the performance of its obligations hereunder if such
failure is due to Force Majeure, which shall include acts of God, fire, flood,
strikes or other labor disorders, acts of Government, war or civil disturbance,
and telephone and other communication line failures. During the period of any
such failure or delay, the obligations of the parties hereto shall be suspended
and shall resume when resolved.
16. Assignment. ASC may transfer or assign this Agreement, or any
----------
right or obligation hereunder, without the prior written consent of Customer,
provided that the assignee executes and delivers to Customer an assumption
agreement pursuant to which it will assume all obligations on its part to be
performed hereunder. Customer may not transfer or assign this Agreement, or any
right or obligation hereunder, without the prior written consent of ASC which
shall be in ASC's absolute and sole discretion.
17. Notice. Whenever notice or any other communication is required or
------
permitted pursuant to any provision of this Agreement, the parities hereto agree
that, except as otherwise expressly provided in this Agreement, such notice or
other communication shall be made by hand delivery, telefacsimile
25
transmission, a recognized overnight courier or by certified mail, return
receipt requested, addressed to the address of the other party hereto set forth
above, or to such other address as may be designated by written notice. If sent
by certified mail, return receipt requested, notices shall be deemed to have
been made on the date which is two (2) days after the date postmarked by the
United States Post Office. In all other cases, notices shall be deemed to have
been made when delivered.
18. Non-Waiver. Waiver by any party hereto of any breach of this
----------
Agreement or the failure to exercise any right hereunder shall not be deemed to
be a waiver of any other breach or right, nor shall the failure of any party
hereto to take action by reason of any such breach or to exercise any such right
deprive such party of the right to take action at any time while such breach or
condition giving rise to such right continues in effect.
19. Time Limitations. Any cause of action arising out of or related
----------------
to this Agreement must be brought no later than one year after the cause of
action has accrued.
20. Severability. If any of the covenants, terms, conditions or
------------
provisions of this Agreement are held invalid for any reason, such invalidity
shall not affect the other provisions hereof which can be given effect without
the invalid provision,
26
as the provisions of this Agreement are intended to be and shall be deemed
severable.
21. Applicable Law. This Agreement shall be governed by, and
--------------
construed in accordance with, the laws of the State of New York, applicable to
contracts executed and to be fully performed therein, without giving effect to
the principles of conflicts of law.
22. Captions and Headings. The captions and headings used in this
---------------------
Agreement are for convenience only and are not to be considered in construing
the terms of this Agreement.
23. Entire Agreement. This Agreement contains the entire agreement of
----------------
the parties hereto concerning the subject matter hereof, and supersedes any and
all prior agreements among the parties hereto concerning the subject matter
hereof, which prior agreements are hereby canceled. This Agreement may only be
changed, modified, amended, by an agreement in writing, signed by the parties
hereto.
24. Counterparts. This Agreement may be executed simultaneously in
------------
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers as of the date of the day, month
and year first above written.
AUTOMATED SECURITIES
CLEARANCE, LTD.
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: President
Date:
KNIGHT SECURITIES
By: /s/ Xxxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: President
Date: 04/10/95
28
SCHEDULE A
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The major functionality modules of the BRASS System is as follows:
Position Management
. BRASS will provide a real time updating of all positions
maintained by the Customer with the BRASS System.
Automatic Regulatory Reporting
. As a part of the trade processing cycle, BRASS will automatically
perform the following reporting functions:
* ACT Reporting
* 90 Second Reporting
* Tick Reporting
* Pink Sheet Reporting
* Generation of Form T Report
Automatic Execution
. BRASS will support the automatic execution of incoming orders at
the price of the NASDAQ Level I inside market. This will be
controlled by parameters established by the Customer.
. BRASS will directly interface to the automated trading systems
established by NASDAQ (i.e., SOES, ACES, Selectnet).
Open Order Management
. BRASS will continually monitor the open order file against the
NASDAQ Level I inside market. When an open order hits a market
condition, BRASS will process that order based upon parameters
established by the Customer.
Trade Entry Support
. BRASS will support the direct entry of dealer to dealer trades,
and Customer to dealer trades.
Real-time Profitability Analysis
. BRASS will provide a real-time profitability analysis of all
trades processed through the system.
Real Reporting
Xxxxxxx I and Xxxxxxx II Compliance
Short Sale Compliance
Customer Terminal Support
Institutional Sales Commission Calculation
