[LETTERHEAD]
EXHIBIT 10.20
FULLY DISCLOSED CLEARING AGREEMENT
OF
PERSHING DIVISION
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
THIS AGREEMENT is made and entered into as of the 7th day of April, 1999, by
and between the Pershing Division of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation ("Pershing"), a Delaware Corporation, and Xxxxxx, Xxxx &
Xxxxxxxx, Inc. ("Broker"), a Texas Corporation.
1.0 APPROVAL
This Agreement shall be subject to approval by the New York Stock
Exchange, Inc. ("NYSE") and by any other self-regulatory organization vested
with the authority to review or approve it. Pershing shall submit this
Agreement to the NYSE and Broker shall submit the Agreement to any other such
organization from which Broker is required to obtain approval. In the event
of disapproval, the parties shall bargain in good faith to achieve the
requisite approval.
2.0 AGREEMENT
From the opening of business on the later of June 15, 1999, or the
effectiveness of the registration of Broker with the NASD, until the
termination of this Agreement as provided for in Paragraph 21 hereof,
Pershing shall carry the cash and margin accounts of the customers of Broker
introduced by Broker to Pershing, and accepted by Pershing, and shall clear
transactions on a fully disclosed basis for such accounts, in the manner and
to the extent set forth in this Agreement.
3.0 ALLOCATION OF RESPONSIBILITY
3.1 RESPONSIBILITIES OF THE PARTIES.
Pursuant to NYSE Rule 382, responsibility for compliance with all
applicable laws, rules, and regulations of the Securities and Exchange
Commission ("SEC"), the National Association of Securities Dealers, Inc.
("NASD"), the NYSE, and any other regulatory or self-regulatory agency or
organization shall be allocated between Pershing and Broker as set forth in
this Agreement. To the extent that a particular function is allocated to one
party under this Agreement, the other party shall supply that party with
information in its possession pertinent to the proper performance and
supervision of that function.
3.2 RELATIONSHIP WITH CUSTOMERS.
Except as provided in Paragraph 27.11 of this Agreement, all
customers receiving services pursuant to this Agreement shall remain
customers of Broker. Pershing shall provide services under this Agreement to
Broker only to the extent explicitly required by specific provisions
contained in this Agreement and shall not be responsible for any duties or
obligations not specifically allocated to Pershing pursuant to this
Agreement. Broker shall enter into appropriate contractual arrangements with
customers on its own behalf. and such agreements shall make Broker, and not
Pershing, responsible to customers for the provision of services. Broker
shall not be deemed to be an agent of Pershing for any purpose, except to the
limited extent expressly set forth in paragraph 9.1.8 of this Agreement. nor
shall Pershing be deemed to have a fiduciary relationship with any of
Broker's customers. Broker acknowledges that Pershing does not control the
business or operations of Broker.
4.0 REPRESENTATIONS AND WARRANTIES
4.1 BROKER. Broker represents and warrants that:
4.1.1 CORPORATION DULY ORGANIZED. Broker is a corporation duly organized,
validly existing, and in good standing under the laws of the state of its
incorporation.
4.1.2 REGISTRATION. Broker is duly registered and in good standing as a
broker dealer with the SEC and is a member firm in good standing of the NASD.
4.1.3 AUTHORITY TO ENTER AGREEMENT. Broker has all requisite authority,
whether arising under applicable federal or state law or the rules and
regulations of any regulatory or self-regulatory organization to which Broker
is subject, to enter into this Agreement and to retain the services of
Pershing in accordance with the terms of this Agreement.
4.1.4 SUBSTANTIAL COMPLIANCE WITH RULES AND REGULATIONS. Broker and each
of its employees is in substantial compliance with, and during the term of
this Agreement shall remain in substantial compliance with, the registration,
qualification, capital, financial reporting, customer protection, and other
requirements of every self-regulatory organization of which Broker is a
member, of the SEC, and of every state to the extent that Broker or any of
its employees is subject to the jurisdiction of that state.
4.1.5 NO PENDING ACTION, SUIT, INVESTIGATION OR INQUIRY. Broker has
disclosed to Pershing every action, suit, investigation, inquiry, or
proceeding (formal or informal) pending or threatened against or affecting
Broker, any of its affiliates, or any officer, director, or general
securities principal or financial and operations principal of Broker, or
their respective property or assets, by or before any court or other
tribunal, any arbitrator, any Governmental authority, or any self-regulatory
organization of which any of them is a member. Broker shall notify Pershing
promptly, but in any event within three business days, of the initiation of
any such action, suit, investigation, inquiry, or proceeding that may have a
material impact on the capital of Broker.
4.2 PERSHING. Pershing represents and warrants that:
4.2.1 CORPORATION DULY ORGANIZED. Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation ("DLJ") is a corporation duly organized, validly existing, and in
good standing under the laws of the state of Delaware.
4.2.2 REGISTRATION. DLJ is duly registered and in good standing as a
broker dealer with the SEC and is a member firm in good standing of the NYSE
and the NASD.
4.2.3 AUTHORITY TO ENTER AGREEMENT. DLJ has all requisite authority, whether
arising under applicable federal or state law, or the rules and regulations of
any regulatory or self-regulatory organization to which
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DLJ is subject, to enter into this Agreement and provide services in
accordance with the terms of this Agreement.
4.2.4 COMPLIANCE WITH REGISTRATION. Pershing and each of its employees is
in substantial compliance with, and during the term of this Agreement shall
remain in substantial compliance with the registration, qualification,
capital, financial reporting, customer protection, and other requirements of
every self-regulatory organization of which Pershing is a member, of the SEC,
and every state.
5.0 ESTABLISHING AND ACCEPTING NEW ACCOUNTS
5.1 ACCEPTANCE OF NEW ACCOUNTS. Broker shall be responsible for opening
and approving new accounts.
5.2 MAINTENANCE OF ACCOUNT INFORMATION. Pershing may rely without
inquiry on the validity of all customer information furnished to it by Broker.
5.3 PERSHING OPERATIONS MANUAL. Broker acknowledges receipt and
familiarity with the Pershing "Customer Reference Guide" and agrees to
familiarize itself with any modifications or supplements to such guide that
may be issued from time to time.
6.0 SUPERVISION OF ORDERS AND ACCOUNTS
6.1 RESPONSIBILITY FOR COMPLIANCE. Broker shall be solely responsible
for compliance with Suitability, "Know Your Customer" rules and other
requirements of federal and state law and regulatory and self-regulatory
rules and regulations governing transactions and accounts. Possession by
Pershing of surveillance records, exception reports, or other similar data
shall not obligate Pershing to establish procedures for dealing with such
material or to review or be aware of their contents. Pershing shall not be
required to make any investigation into the facts surrounding any transaction
that it may execute or clear for Broker or any customer of Broker.
6.2 COMPLIANCE PROCEDURES. Broker agrees to diligently supervise
compliance with all applicable laws, rules, and regulations of the SEC, NASD,
NYSE, and any other regulatory or self-regulatory agency or organization
having jurisdiction over Broker through the use of a compliance manual or
other written procedures. Broker shall review transactions and accounts to
assure compliance with prohibitions against manipulative practices and
xxxxxxx xxxxxxx and other requirements of federal and state law and
applicable regulatory and self-regulatory rules and regulations to which
Broker or its customer are subject. Without limiting the above, Broker shall
be responsible for compliance with the supervisory requirements in Section 1
5(b)(4) of the Securities Exchange Act of 1934, as amended, NASD Rule 3010,
NYSE Rules 342, 431 and 35 1, and similar rules adopted by any other
regulatory or self-regulatory agency or organization, to the extent
applicable.
6.3 KNOWLEDGE OF CUSTOMER'S FINANCIAL RESOURCES AND INVESTMENT
OBJECTIVES. Broker shall comply with Rule 405(1) of the NYSE or comparable
requirements of similar rules of any other self-regulatory organization to
which Broker is subject. Broker shall obtain all essential facts relating to
each customer, each cash and margin account, each order, and each person
holding a power of attorney over any account, in order to assess the
suitability of transactions when required by applicable rules, the
authenticity of orders, signatures, endorsements, certificates, or other
documentation, and the frequency of trading. Broker warrants that, to the
best of its knowledge, it will not open or maintain accounts for persons who
are minors or who are otherwise legally incompetent and that it will comply
with NYSE Rule 407 and other laws, rules, or regulations that govern the
manner and circumstances in which accounts may be opened or transactions
authorized.
6.4 FURNISHING OF INVESTMENT ADVICE. Broker shall be solely responsible
for any recommendation or advice it may offer to its customers.
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6.5 DISCRETIONARY ACCOUNTS. Broker shall be solely responsible for
obtaining customer approval for and supervising discretionary accounts.
6.6 OPTION ACCOUNTS. Before engaging in option trading for any
customer, Broker shall deliver to the customer a current disclosure statement
of the Options Clearing Corporation and any effective supplements. Broker
shall obtain the required signatures on all option agreements, shall obtain
proper approval of the opening of all option accounts and shall otherwise
comply with all applicable laws, rules and regulations relating to options
accounts and option trading. Broker shall deliver to Pershing a copy of a
signed option agreement for each customer approved by it for options trading
in a form acceptable to Pershing.
6.7 ACCOUNTS OF EMPLOYEES OF MEMBER ORGANIZATIONS, SELF-REGULATORY
ORGANIZATIONS, AND FINANCIAL INSTITUTIONS. Broker shall give required notices
and obtain required approvals of employers in each case in which a customer
is an employee of a broker-dealer, a self-regulatory organization, or a
financial institution.
7.0 EXTENSION OF CREDIT
7.1 PRESUMPTION OF CASH ACCOUNT. Pershing may, but is not required to,
permit customers of Broker to purchase securities on margin, but all
transactions for a customer will be deemed to be cash transactions, and
payment for those transactions will be required in the manner applicable to
cash transactions, unless, on or prior to settlement, Broker has furnished
Pershing with a properly executed and binding customer margin agreement and
consent to loan of securities in a form acceptable to Pershing.
7.2 MARGIN REQUIREMENTS. All margin accounts introduced by Broker shall
be subject to Pershing's margin requirements as in effect from time to time.
Pershing reserves the right (but shall not be obligated) to refuse to accept
any transaction in a margin account or croup of accounts without the actual
receiptof the necessary margin and to impose a higher margin requirement for
a particular account when, in Pershing's discretion, the past history or
nature of the account or other factors or the securities held in it warrant
such action. In all instances, Broker shall be responsible for determining
the amount of credit suitable for every account and may require higher margin
than imposed by Pershing for any particular account, group of accounts, or
all accounts introduced by Broker to Pershing.
7.3 MARGIN MAINTENANCE AND COMPLIANCE WITH REGULATION T AND SEC RULE
15c3-3m.
7.3.1 INITIAL MARGIN. Broker shall be responsible for the initial margin
requirement for any transaction until such initial margin has been received
by Pershing, in acceptable form.
7.32 MARGIN CALLS. After the initial margin for a transaction has been
received, subsequent margin calls may be made by Pershing at its discretion.
Pershing shall calculate the maintenance requirement and notify Broker of any
amounts due. Broker shall be responsible for issuing the margin call to its
customer and obtaining the amount due directly from Broker's customer. If
Broker fails to take the appropriate action, Pershing reserves the right to
collect the amount due directly from Broker's customer. Broker agrees to
cooperate with Pershing in complying with and obtaining margin in response to
such calls. If any customer fails to meet a maintenance call, Broker shall be
liable to Pershing for any loss or damage it may incur unless the Broker
establishes that the loss or damage was directly attributable to Pershing's
failure to give proper and timely notification to Broker or customer.
7.3.3 ACTIONS UPON FAILURE TO MEET MARGIN CALLS OR DELIVER SECURITIES. In
the event that satisfactory margin is not provided within the time specified
by Pershing, or securities sold are not delivered as required, Pershing may
take such actions as Pershing deems appropriate, including but not limited to
the sale or purchase of securities in connection with the account. Broker
shall cooperate with Pershing by entering appropriate orders to buy-in or
sell-out securities in any such instance. Compliance with a request
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to withhold action shall not be deemed a waiver by Pershing of any of its
rights under this Agreement, including but not limited to the right to close
out a contract or position if in Pershing's judgment changing conditions
render such action advisable, with or without prior notification to customer
or Broker.
7.4 CHARGING OF INTEREST AND DISCLOSURES PURSUANT TO RULE l0b-16.
Interest charged with respect to debit balances in customers' accounts shall
be determined in accordance with the fully disclosed pricing schedule
attached to this Agreement. Broker shall send each margin customer a written
disclosure statement, in a form acceptable to Pershing, at the time of the
opening of a margin account as required by SEC Rule lOb-16.
7.5 UNSECURED DEBITS OR UNSECURED SHORT POSITIONS. Pershing shall
charge against the account of Broker an amount equal to the value of any
unsecured debit or short position (on a "xxxx to market" basis) in a customer
account if that position has not been promptly resolved by payment or
delivery. Any remaining debit shall be charged against Broker's Deposit
Account and be considered a claim against Broker pursuant to Paragraph 19 of
this Agreement.
8.0 MAINTENANCE OF BOOKS AND RECORDS
8.1 STOCK RECORDS. Pershing shall maintain stock records and other
prescribed books and records of all transactions executed or cleared through
it in accordance with generally accepted practices in the securities industry.
8.2 REGULATOR`- REPORTS AND RECORDS. Broker shall prepare, submit, and
maintain copies of all reports, records, and regulatory filings required of
Broker by any entity that regulates it, including, but not limited to, copies
of all account agreements and similar documentation obtained pursuant to
paragraph 5.0 of this Agreement and any reports and records required to be
made or kept under the Currency and Foreign Transactions Reporting Act of
1970, the Money Laundering Act of 1986, and any rules and regulations
promulgated pursuant thereto. To the extent that Pershing is required to
prepare or submit any reports or records by any entity that regulates it,
Broker shall cooperate in providing Pershing with any information needed in
order to prepare such reports or records.
8.3 AUDIOTAPING OF TELEPHONE CONVERSATIONS - Broker understands that
for quality control, dispute resolution or other business purposes, Pershing
records some or all telephone conversations between Broker and Pershing.
Broker hereby consents to such recording and will inform its employees,
representatives and agents of this practice. It is further understood that
all such conversations are deemed to be solely for business purposes.
9.0 RECEIPT AND DELIVERY OF FUNDS AND SECURITIES
9.1 RECEIPT AND DELIVERY OF FUNDS AND SECURITIES.
9.1.1 CASHIERING FUNCTIONS. Pershing shall perform normal and reasonable
cashiering functions for customer accounts introduced by Broker. These
functions shall include receipt and delivery of securities purchased, sold,
borrowed, and loaned; receipt and payment of funds owed by or to customers;
and provision of custody for securities and funds. Broker shall provide
Pershing with the basic data and documents that are necessary or appropriate
to permit Pershing to perform its obligations under this Paragraph, including
but not limited to copies of records documenting receipt of customers' funds
and securities received directly by Broker. Such data and documents must be
compatible with the requirements of Pershing's data processing systems.
9.1.2 PURCHASES. Broker shall be responsible for purchases made for
customers until actual and complete payment has been received by Pershing.
When payment is tendered to Pershing in the form of a check, Broker shall
remain responsible until the check has been paid and the proceeds actually
received and finally
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credited to Pershing (without any subsequent chargeback) by its bank.
Pershing shall use due diligence in depositing any checks that it receives
directly from customers of Broker.
9.1.3 SALES. Broker shall be responsible for sales until Pershing has
received, in acceptable form, the securities involved in a transaction. If
Pershing does not receive delivery of securities in an acceptable form,
Pershing may buy-in all or part of the securities for the accounts of the
customer of Broker or Broker.
9.1.4 WHEN ISSUED AND DELAYED DELIVERY TRANSACTIONS. In the case of the
purchase or sale of securities on a "when issued" basis, and in the case of a
purchase or sale where distribution or delivery is otherwise delayed (except
pursuant to a margin agreement), Broker shall remain responsible, as set
forth in this Agreement, until necessary and satisfactory payment of funds or
delivery of securities, as required by the margin rules, has been received by
Pershing.
9.1.5 FUNDS AND SECURITIES RECEIVED BY BROKER. Broker shall promptly
deposit with Pershing funds or securities received by Broker from its
customers, together with such information as may be relevant or necessary to
enable Pershing to record such remittances and receipts in the respective
customer accounts.
9.1.6 FAILURE TO SETTLE OR PAY. In the event of a failure to timely
deposit required funds or securities, Pershing may take appropriate remedial
action. Without waiving or otherwise limiting its right to take other
remedial action, Xxxxxxx=> may at its option charge interest at rates as
agreed in Schedule A to this Agreement. Broker may pass such charges on to
its customers but Broker remains responsible therefor until actually paid.
9.1.7 SETTLEMENT AND DELIVERY. Broker shall obtain each customer's
agreement to accept partial deliveries and to abide by other clearance
arrangements as may be directed by any exchange or association. With respect
to any settlements which involve the drafting of securities, draft charges,
including interest expense, will be borne by Broker.
9.1.8 CHECK WRITING AUTHORITY. Pershing may, but is not required to,
authorize certain of Broker's employees to sign checks to Broker's customers
for amounts due to, and requested by them, with respect to their accounts.
Broker shall designate in writing the names of any employees it wishes to
receive the authorization described in this subparagraph. All checks must be
signed by two employees who have received authorization from Pershing. No
check or checks totaling more than $100,000 shall be provided to any customer
by Broker on the same business day. All expenses incurred in connection with
the issuance of checks under the authority described in this subparagraph
shall be charged to Broker. Broker remains responsible for the disbursement
and delivery of such checks to its customers. Any lien on the customer's
property granted by the customer to Broker or Pershing shall extend to any
funds which may be segregated in a separate account in connection with the
exercise of the authority described in this subparagraph.
9.2 TRANSFER OF SECURITIES AND ACCOUNTS. Upon receiving written or oral
instructions from Broker, or written instructions from a customer, Pershing
shall make reasonable efforts to effectuate such transfers of securities or
accounts as may be requested. Whenever practicable, Pershing shall first
notify the Broker before acting on a customer's written request.
9.3 RESTRICTED AND CONTROL STOCK REQUIREMENTS. Broker shall be
responsible for determining whether any securities held in Broker's or its
customer accounts are restricted or control securities as defined by
applicable laws, rules, or regulations. Broker is responsible for assuring
that orders executed for such securities comply with such laws, rules, and
regulations.
9.4 PAYMENT OF DIVIDENDS AND HANDLING OF EXCHANGE OR TENDER OFFERS,
RIGHTS, WARRANTS AND REDEMPTIONS. Whenever Pershing has been instructed to
retain custody of the securities in any account, Pershing may hold the
securities in the customer's name, the name of Pershing or its nominee, or in
the names of nominees of any depository used by Pershing. Pershing shall
perform the services required in connection with holding the securities in
custody in each account, including (1) collection and payment of dividends
and interest; (2) transmittal and handling (through Broker) of tenders or
exchanges pursuant to tender offers and exchange offers; (3) transmittal of
proxy materials and other shareholder communications
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if Pershing is appropriately compensated; and (4) handling of exercises or
expirations of rights, options, warrants and redemptions.
9.5 CORPORATE ACTION REQUESTS/SOLICITING DEALER AGREEMENTS: Broker
requests and authorizes Pershing to execute as Broker's agent-in-fact any and
all Soliciting Dealer Agreements for corporate actions involving securities
or other interests held by Broker's customers on the books of Pershing.
Pershing agrees to provide notice of the pending corporate action to Broker
at its designated locations. Pershing further agrees to collect and submit
corporate action requests from Broker and submit them to the soliciting party
in accordance with the instructions received from the soliciting party.
Pershing agrees to use its best efforts to communicate corporate action
information to Broker and, where applicable, Broker's customers, but shall
not be liable for a) any delays in the communication of corporate action
information or b) delays in the transmission of collected corporate action
requests to the soliciting party unless caused by Pershing's gross
negligence. All fees received from the soliciting party will be credited to
Broker. In consideration of providing this service to Broker, Broker agrees
to indemnify and hold harmless Pershing, its affiliates, officers, agents and
employees from all claims, suits, investigations, damages and defense costs
(including reasonable attorneys fees) that arise in connection with this
paragraph.
9.6 COD-ORDERS. Broker shall not introduce any retail or individual
accounts requiring settlement on a "delivery versus payment" or "receive
versus payment" basis without the prior written approval of Pershing. If such
approval has been given, Broker shall arrange for timely settlement of all
such transactions. Broker shall be responsible for complying with the
requirements of NYSE Rule 387 with respect to those transactions, except that
Pershing shall be responsible for delivering confirmations pursuant to NYSE
Rule 387.
10.0 SAFEGUARDING OF FUNDS AND SECURITIES
Except as otherwise provided in this Agreement, Pershing shall be
responsible for the safekeeping of all money and securities received by it
pursuant to this Agreement. However, Pershing will not be responsible for any
funds or securities delivered by a customer to Broker until such funds or
securities are actually received by Pershing or deposited in bank accounts
maintained by Pershing.
11.0 CONFIRMATIONS AND STATEMENTS
11.1 PREPARATION AND TRANSMISSION OF CONFIRMATIONS AND STATEMENTS.
Pershing shall prepare confirmations and summary periodic statements and
shall, to the extent required, transmit them to customers and Broker in a
timely fashion except to the extent Broker has agreed to transmit
confirmations to customers. Confirmations and statements shall be prepared on
forms disclosing that the account is carried on a fully disclosed basis for
the Broker in accordance with applicable rules, regulations and
interpretations. Broker will have the ultimate regulatory responsibility for
compliance with the prospectus delivery requirements of the Securities Act of
1933, as amended, regardless of its retention of a prospectus fulfillment
service to perform delivery of same.
11.2 EXAMINATION AND NOTIFICATION OF ERRORS. Broker shall examine
promptly all confirmations, statements, and other reports provided to Broker
by Pershing. Broker must promptly notify Pershing of any error claimed by
Broker in any account. If Broker fails to notify Pershing promptly of any
error the existence of which was, or should reasonably have been,
discoverable by review of confirmations, statements, and reports provided to
Broker by Pershing, Broker shall be deemed to have waived its right to make
any claim against Pershing with respect to such error.
12.0 ACCEPTANCE AND EXECUTION OF TRANSACTIONS
12.1 RESPONSIBILITY TO ACCEPT OR REJECT TRADES. Pershing shall execute
transactions in customers' accounts and release or deposit money or
securities to or for accounts only upon Broker's instructions. Pershing
reserves the right to accept written or oral transaction orders from Broker's
customers in circumstances where it determines that the customers are unable
to execute those transactions through
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Broker. Notwithstanding any instructions to the contrary, Pershing may, after
giving reasonable notice, (i) refuse to confirm a transaction or cancel a
confirmation, (ii) reject a delivery or receipt of securities or money, (iii)
refuse to clear a trade executed by Broker, or (iv) refuse to execute a trade
for the account of a customer or Broker.
12.2 RESPONSIBILITY FOR ERRORS IN EXECUTION. Broker shall be responsible
for transmission to Pershing of all customer orders and for any errors in the
Broker's recording or transmission of such orders. Pershing shall be
responsible for any errors it might make in the further transmission and
execution of such orders after their receipt, in proper and complete form,
from Broker.
12.3 SETTLEMENT OF CONTRACTS AND TRANSACTION. Unless otherwise agreed in
writing, Pershing shall have no obligation to settle contracts and
transactions in securities (i)between Broker and other brokers and dealers,
(ii) between Broker and its customers and (iii) between Broker and third
persons.
13.0 OTHER OBLIGATIONS AND RESPONSIBILITIES OF BROKER
13.1 OTHER CLEARING AGREEMENTS. During the term of this Agreement,
Broker shall not enter into any other similar agreement or obtain the
services contemplated by this Agreement from any other party or supply the
services contemplated by the Agreement without the prior written approval of
Pershing.
13.2 DISCIPLINARY ACTION, SUSPENSION, OR RESTRICTION. If Broker becomes
subject to disciplinary action, suspension, or restriction by a federal or
state agency, stock exchange, or regulatory or self regulatory organization
having jurisdiction over Broker or Broker's securities or commodities
business, Broker shall notify Pershing immediately, orally and in writing,
and provide Pershing a copy of any decision relating to such action,
suspension, or restriction. Broker shall reimburse Pershing for the fees and
expenses associated with any legal advice Pershing may seek with respect to
the effect of such action, suspension, or restriction on the rights and
obligations of Pershing under this Agreement. Pershing may take any action it
reasonably deems to be necessary (i) to assure that it will continue to
comply with all applicable legal, regulatory, and self-regulatory
requirements, notwithstanding such action, suspension, or restriction, and
(ii) to comply with any requests, directives, or demands made upon Pershing
by any such federal or state agency, stock exchange, or regulatory or
self-regulatory organization.
13.3 PROVISION OF FINANCIAL INFORMATION. Broker shall furnish Pershing
copies of FOCUS Reports, financial statements for the current fiscal year,
the executed Forms X-17a-5 (Parts I and IIA) filed with the SEC, any
amendments to Broker's Form BD, and any other regulatory or financial reports
Pershing may from time to time require. Broker shall provide such reports to
Pershing at the time Broker files such reports with its primary examining
authority. Broker shall also notify Pershing in advance of withdrawals of
more than 10% of its net capital.
13.4 FIDELITY BOND. Broker shall maintain throughout the term of this
Agreement fidelity insurance coverage in at least the minimum amount required
under NASD rules.
Pershing may require that Broker obtain additional fidelity insurance
coverage if it reasonably determines that such coverage is necessary to
assure Broker's performance of its obligations under this Agreement.
13.5 EXECUTING BROKERS. If Broker wishes to act as an "Executing Broker"
as such term is understood in that certain letter dated January 25, 1994 from
the Division of Market Regulation of the Securities and Exchange Commission,
as the same may be amended, modified or supplemented from time to time (the
"No-Action Letter'") then all terms herein shall have the same meaning as
ascribed thereto either in the Agreement or in the No-Action Letter as the
sense thereof shall require. Broker may, from time to time, execute trades
(either directly or through Pershing) for Prime Brokerage Accounts in
compliance with the requirements of the No-Action Letter. (The No-Action
Letter requires, INTER ALIA, that a contract be executed between Pershing and
Prime Broker, and between Broker and Prime Brokerage Customer prior to the
transaction of any business hereunder). Broker shall promptly notify
Pershing, but in no event later than 5:00 p.m. New York time of trade date in
a mutually acceptable fashion, of such trades in sufficient detail
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for Pershing to be able to report and transfer any trade executed by Broker
on behalf of a Prime Brokerage Account to the relevant Prime Broker. Broker
understands and agrees that if Prime Broker shall disaffirm or "dk" any trade
executed by Broker on behalf of a Prime Brokerage Account; Broker shall open
an account for such Prime Brokerage Account in its range of accounts and
shall transfer or deliver the trade to such account at the risk and expense
of Broker to the same extent as for any account introduced by Broker pursuant
to the Agreement. Broker understands and agrees that all Prime Brokerage
Accounts shall be conducted in accordance with the requirements of the
No-Action Letter and any relevant agreement between Broker and a Prime
Brokerage Customer, or between Pershing and relevant Prime Broker. Broker
further agrees to supply Pershing with such documents, papers and things,
which from time to time are reasonably required by Pershing to carry out the
intention of this Paragraph. Broker agrees that it shall know its customer,
obtain appropriate documentation, including new account form, conduct its own
credit check and determine the availability of shares for any short sales.
Broker shall maintain facilities to clear any disaffirmed trades.
14.0 OTHER OBLIGATIONS AND RESPONSIBILITIES OF PERSHING
14.1 USE OF THIRD PARTY SERVICES. Pershing may, at its reasonable
option, and consistent with common industry practice, retain one or more
independent data processing or other service bureaus to perform functions
(including, but not necessarily limited to pricing services or proxy mailing
services) superfluous assigned to Pershing under this Agreement. If any such
service bureau fails to perform an assigned function accurately, in
accordance with specifications, or within the customary time periods,
Pershing shall cause the service bureau to correct any error in its next
regularly scheduled processing operation and to deliver any overdue work as
soon as reasonably practicable. Except as stated in this subparagraph,
Pershing shall not be responsible for any losses, damages, liability, or
expenses claimed by Broker or its customers arising from any such failure
beyond the amount of such losses, damages or expense which Pershing is able
to recover pursuant to the terms of its agreement with such service bureau.
14.2 BACKUP WITHHOLDING. Broker hereby agrees to take necessary measures
to comply with the backup withholding requirements of Section 3406 and the
nonresident alien withholding requirements of Section 1441 of the Internal
Revenue Code of 1986, as amended, with respect to its customer accounts.
Broker agrees to furnish to Pershing in writing or by electronic transmission
any tax information in its possession relating to each customer account
transferred to Pershing and to each future customer (including the customer's
taxpayer identification number and any certifications provided by the
customer on IRS Forms X-0, X-0, or 1001 or any authorized substitute) and
agrees that Pershing may rely on such information. Pershing agrees to notify
Broker of any account not in compliance with such back-up withholding
requirements. Broker hereby authorizes Pershing to employ any procedures
permitted under applicable law or regulation to achieve compliance with
withholding obligations under the federal income tax law, including
procedures pertaining to backup withholding on orders to purchase or sell
securities which are received from customers by telephone or electronic
transmission.
15.0 SERVICES FOR WHICH PERSHING IS NOT RESPONSIBLE
Unless otherwise expressly agreed in writing, Pershing shall not
provide nor be responsible for providing any of the following services:
15.1 Accounting, bookkeeping, record-keeping, cashiering, or other
services involving commodity transactions, or any other transactions not
involving securities; or any matter not contemplated by the Agreement.
15.2 Preparation of Broker's payroll records, financial statements, or
any analysis thereof;
15.3 Preparation or issuance of checks in payment of Broker's expenses,
other than expenses incurred by Pershing on behalf of Broker pursuant to
this Agreement;
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15.4 Payment of commissions to Broker's sales personnel.
16.0 LIABILITY OF PERSHING
16.1 PERSHING INDEMNIFICATION. In addition to any other obligations it
may possess under other provisions of this Agreement, Pershing shall
indemnify, defend, and hold harmless Broker from and against all claims,
demands, proceedings, suits, actions, liabilities, expenses, attorney's fees,
and costs in connection therewith arising out of any reckless, dishonest,
fraudulent, or criminal act or omission on the part of any of its officers or
employees with respect to the services provided by Pershing under this
Agreement. Notwithstanding the foregoing, Pershin1-1 shall have no liability
to any of Broker's customers for any loss suffered by any customer.
Pershing's liability will be only to Broker and then only to the extent
expressly set forth in this Agreement.
16.2 DEFENSE OF THIRD PARTY CLAIMS. If, within 10 days after receiving
written notice of any claim, demand, suit, proceeding, or action with
respect to which Broker may have any colorable claims to indemnification
under this Agreement, Pershing shall fail to institute the defense of Broker
in connection with such claim, demand, suit, proceeding, or action, or if
thereafter Pershing shall fail diligently to pursue such defense, Broker
shall have the right to defend such action or settle such action. The
reasonable costs and expenses, including attorney's fees, associated with
such a defense or settlement shall be borne by Pershing. The exercise of the
right to participate in or assume the responsibility for any such defense
shall not limit in any way Broker's right to indemnification under this
Paragraph.
16.3 DAMAGES. Pershing shall not be liable for special, indirect,
incidental, consequential or punitive damages which Broker, a customer of
Broker, or any other third party may incur or experience, whether such
damages are incurred or experienced as a result of entering into or relying
on this Agreement or otherwise, even if Pershing has been advised of the
possibility of such damages. Broker and Pershing each agree not to assist any
claim for punitive damages against the other.
16.4 PERCHING RIGHT TO COMPETE. Nothing in this Agreement shall be
deemed to restrict in any way the right of Pershing or any affiliate of
Pershing to compete with Broker in any or all aspects of Broker's business.
17.0 LIABILITY OF BROKER
17.1 BROKER INDEMNIFICATION. In addition to any other obligations it may
possess under other provisions of this Agreement, Broker shall indemnify,
defend, and hold harmless Pershing, and any controlling person of Pershing,
from and against all claims, demands, proceedings, suits, and actions and all
liabilities, expenses, attorney's fees (including fees and costs incurred in
enforcing it's right to indemnification), and costs in connection therewith
arising out of one or more of Broker's or any of its employee's negligent,
dishonest, fraudulent or criminal act or omission or any of the following:
17.1.1 FAILURE TO MAKE PAYMENT OR DELIVER SECURITIES. Failure of Broker or
a customer of Broker to make any payment or deliver any securities when due.
A check received by Pershing from a customer shall not constitute payment
until it has been paid and the proceeds are actually received and finally
credited to Pershing (without any subsequent chargeback) by its bank.
17.1.2 MARGIN CALLS. Failure of a customer to meet any initial margin call
or any maintenance call, except that Pershing shall be responsible for the
portion of any such loss or damage that Broker establishes was directly
attributable to Pershing's failure to give notification to the Broker as
required in paragraph 7.2 of this Agreement.
17.1.3 BROKER'S FAILURE TO PERFORM. Failure of Broker to perform any duty,
obligation, or responsibility with respect to customer accounts as set forth
in this Agreement. Broker's indemnification obligation under this
subparagraph shall not be affected by the participation of Pershing or any
person controlling it or controlled by it within the meaning of the
Securities Exchange Act of 1934, as amended, in any transaction
10
giving rise to such an obligation, unless such participation constitutes
recklessness, fraud, or criminal conduct.
17.1.4 IMPROPER CONDUCT BY AGENTS. Any negligent, dishonest, fraudulent,
or criminal act or omission on the part of any of Broker's officers,
directors, employees or agents.
17.1.5 FAILURE OF A CUSTOMER TO PERFORM OBLIGATIONS. Any failure by any of
Broker's customers to perform any commitment or obligation with respect to a
transaction carried by Pershing under this Agreement, whether or not such
failure was under the control of Broker.
17.1.6 CUSTOMER CLAIMS AND DISPUTES. Any claim or dispute between Broker
and a customer with respect to services provided under this Agreement,
including but not limited to any claim or dispute concerning the validity of
a customer order in the form the order was transmitted to Pershing by Broker
and any claim arising in connection with Pershing's guarantee of any
signature of any customer of Broker.
17.1.7 WARRANTIES. Any adverse claim with respect to any security
delivered or cleared by Pershing, including a claim of a defect in title with
respect to securities that are alleged to have been forged, counterfeited,
raised or otherwise altered, or if they are alleged to have been lost or
stolen. The parties agree that Pershing shall be deemed to be an intermediary
between Broker and customer and shall be deemed to make no warranties other
than as provided in Section 8-306(3) of the Uniform Commercial Code.
17.1.8 DEFAULT OF THIRD PARTY BROKER. Any default by a third party broker
with whom the Broker deals on a principal or agency basis in a transaction
either not executed by Pershing or not cleared by Pershing even if permitted
by Pershing as provided herein.
17.1.9 CHECK SIGNING. Any negligence, fraud, malfeasance, or error of any
employee of Broker with respect to the use of the checksigning authority
granted under paragraph 9.1.8 of this Agreement.
17.1.10 PRIOR SELF-CLEARING ARRANGEMENTS. Any guarantee, indemnification,
or hold harmless agreement in connection with Broker's business or customers
that Pershing may provide to the National Securities Clearing Corporation,
the Depository Trust Company, or any other clearing, depository, or
selfregulatory organization with respect to transactions self-cleared by
Broker prior to transfer of such functions to Pershing.
17.1.11 BREACH OF WARRANTY BY BROKER. Any breach by Broker of any
representation or warranty made by it under this Agreement.
17.1.12 DEPOSIT OF CHECKS TO CUSTOMER ACCOUNTS Any failure to exercise due
diligence in reviewing checks received from customers to insure that same are
in proper form, or in the issuance of instructions to Pershing regarding the
accounts into which checks are to be deposited.
17.1.13 ASSETS NOT HELD IN BROKERAGE ACCOUNT - Any claim asserted against
Pershing alleging the inaccuracy of any information appearing on Broker's
customer brokerage account statements with respect to assets not held in the
brokerage account, regardless of whether such information was provided by
Broker, customer or a third-party.
17.2 DEFENSE OF THIRD PARTY CLAIMS. If, within 10 days after receiving
written notice of any claim, demand, suit, proceeding, or action with
respect to which Pershing may have any colorable claim to indemnification
under this Agreement, Broker shall fail to institute the defense of Pershing
in connection with such claim, demand, suit, proceeding, or action, or if
thereafter Broker shall fail diligently to pursue such defense, Pershing
shall have the right to defend such action or settle such action. The costs
and expenses, including attorney's fees, associated with such a defense or
settlement shall be borne by Broker. The exercise of the right to participate
in or assume the responsibility for any such defense shall not limit in any
way Pershing's rights to indemnification under this Paragraph.
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18.0 FEES AND SETTLEMENTS FOR SECURITIES TRANSACTIONS
18.1 COMMISSIONS. Pershing shall charge each of Broker's customers the
commission. markup and any other charge or expense that Broker instructs it
to charge for each transaction. If instructions are not received with respect
to a transaction in the time period required by Pershing to implement those
instructions, Pershing shall charge the customer the commission, markup, or
other charge or expense prescribed in the basic commission schedule delivered
to Pershing by Broker. This basic schedule may be amended from time to time
by Broker by written instructions delivered to Pershing. Pershing, shall only
be required to implement such amendments to the basic schedule to the extent
such amendments are within the usual capabilities of Pershing's data
processing and operations systems and only within such reasonable time
limitations as Pershing may deem necessary to avoid disruption of its normal
operating capabilities.
18.2 RESPONSIBILITY FOR PRICING. Broker shall establish the commissions,
xxxx-ups and other charges or expenses to be charged to customers in
accordance with all applicable laws, rules, and regulations of the SEC, NASD,
NYSE, and other regulatory and self-regulatory agencies and organizations.
Pershing shall exercise no control or influence over the establishment of
such commissions, xxxx-ups or other charges or expenses. This provision shall
not affect Pershing's right to charge Broker or Broker's customers reasonable
fees for the services provided under this Agreement, including SEC
transaction fees, fees for inactive accounts, and other appropriate fees.
Broker may instruct Pershing to charge such fees to its customers but remains
liable for the payment thereof. Broker shall notify its customers of fees
charged to them.
18.3 SETTLEMENT. Commissions charged Broker's customers shall be
collected by Pershing and credited to Broker, after deducting Pershing's
compensation referred to in Subparagraph 18.4 below and any other amount owed
to Pershing pursuant to this Agreement. Such commissions shall be remitted to
Broker on a monthly basis, approximately ten days after the final settlement
date of each month. More frequent remittances may be advanced to Broker if
the parties so agree and if the estimated current activity in the accounts
and prior experience justify such advances.
18.4 FEES FOR CLEARING SERVICES. As compensation for services provided
pursuant to this Agreement, Pershing shall deduct from the commissions,
xxxx-up, xxxx-down or fees charged Broker's customers the amounts set forth
in the fully disclosed pricing schedule attached hereto as Schedule A. The
compensation schedule may be changed by Pershing at any time on thirty days
prior written notice to Broker or from time to time as may be agreed by both
parties. Broker shall promptly notify Pershing of any change in the nature or
mix of the business engaged in by Broker.
19.0 DEPOSIT ACCOUNT
19.1 ESTABLISHMENT OF DEPOSIT ACCOUNT. To further assure Broker's
performance of its obligations under this Agreement, including but not
limited to its indemnification obligations under Paragraph 17, Broker shall,
on or before the execution of this Agreement, establish an account at
Pershing to be designated as the Broker's Deposit Account (the "Deposit
Account"). The Deposit Account shall at all times contain cash, securities,
or a combination of both, having a market value of at least the amount set
forth in Schedule A. The securities placed in the Deposit Account shall
consist only of direct obligations issued by or guaranteed as to principal
and interest by the United States Government. In the event of a substantial
change in the nature and extent of Broker's business operations, Pershing may
require immediately that an additional amount be deposited in the Deposit
Account. If such a deposit is not made in the amount specified whether or not
Broker agrees that the amount is justified under this subparagraph, Pershing
shall have the right to terminate this Agreement forthwith.
19.2 PERSHING RIGHT TO OFFSET COMMISSIONS AND DEPOSIT ACCOUNT. If (i)
Pershing shall have any claim against Broker or a customer of Broker which has
not been resolved within five business days after Pershing presents such claim
to Broker, or (ii) if Pershing shall suffer any loss or incur any expense for
12
which it is entitled to be indemnified pursuant to this Agreement, and Broker
shall fail to make such indemnification within five business days after being
requested to do so, Pershing may deduct the amount of such claim, loss, or
expense from the commissions to be credited to Broker on the next monthly or
other periodic settlement date pursuant to Paragraph 18.3. If the amount of
these commissions is less than the amount of such claim, loss, or expense,
Pershing may withdraw from the Deposit Account cash or securities (or both)
having a market value equal to the amount of such deficiency. Broker shall be
obligated to make an immediate deposit in the Deposit Account of cash or
securities sufficient to bring the Account back to a value of at least the
amount required by Schedule A.
19.3 TERMINATION OF DEPOSIT ACCOUNT. Upon the termination of this
Agreement, or as soon there after as practical, Pershing shall pay and
deliver to Broker the funds and securities in the Deposit Account, less any
amounts which it is entitled under the preceding paragraph; provided,
however, that Pershing may retain in the Deposit Account such amount for such
period as it deems appropriate for its protection from any claim or
proceeding of any type, then pending or threatened, until the final
determination of such claim or proceeding is made. If a threatened claim or
proceeding is not resolved or if a legal action or proceeding is not of this
Agreement, any amount retained with respect to such claim, proceeding, or
action shall be instituted within a reasonable time after the termination
paid or delivered to Broker.
20.0 PROPRIETARY ACCOUNTS OF INTRODUCING BROKERS AND DEALERS
(PAIB)
Pershing agrees to establish a separate reserve account for
proprietary assets held by Broker so that Broker can treat these assets as
allowable assets under SEC Rule I Sc3-1. Pershing agrees to perform the
required computation on behalf of Broker in accordance with the following
provisions, procedures and interpretations set forth in the SEC's No-Action
Letter regarding Proprietary Accounts of Introducing Brokers and Dealers
(PAIB) dated November 3, 1998:
20.1 Pershing will perform a separate computation for PAIB assets (PAIB
reserve computation) of Broker in accordance with the customer reserve
computation set forth in SEC Rule 15c3-3 (customer reserve formula) with the
following modifications:
A. Any credit (including a credit applied to reduce a debit) that is
included in the customer reserve formula will not be included as a
credit in the PAIB reserve computation:
B. Note E(3) to Rule 15c3-3a which reduces debit balances by one percent
under the basic method and subparagraph (a)(I)(ii)(A) of Rule 15c3-1
which reduces debit balances by three percent under the alternative
method will not apply; and
C. Neither Note E(I) to Rule 15c3-3a nor NYSE Interpretation /04 to Item
10 of Rule 15c3-3a regarding securities concentration charges is
applicable to the PAIB reserve computation.
20.2 PAIB reserve computation will include all the proprietary accounts
of Broker. All PAIB assets will be kept separate and distinct from customer
assets under the customer reserve computation set forth in SEC Rule 15c3-3.
20.3 PAIB reserve computation will be prepared within the same time
frames as those prescribed by Rule 15c3-3 for the customer reserve formula.
20.4 Pershing will establish and maintain a separate "Special Reserve
Account for the Exclusive Benefit of PAIB Customers" with a bank in
conformity with the standards of Rule 15c3-3(f) (PAIB Reserve Account). Cash
and/or qualified securities as defined in the Rule will be maintained in the
PAIB Reserve Account in an amount equal to the PAIB reserve requirement.
20.5 If the PAIB reserve computation results in a deposit requirement,
the requirement can be satisfied to the extent of any excess debit in the
customer reserve formula of the same date. However, a deposit requirement
resulting from the customer reserve formula cannot be satisfied with excess
debits from the PAIB reserve computation.
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20.6 Within two business days of entering into this agreement, Broker
must notify its designated examining authority (DEA) in writing that it has
entered into a PAIB agreement with its clearing broker-dealer.
20.7 Upon discovery that any deposit made to the PAIB Reserve Account
did not satisfy its deposit requirement, Pershing will immediately notify its
DEA and the SEC. Unless a corrective plan is found to be acceptable by the
SEC and the DEA, Pershing will provide written notification within five
business days of the date of discovery to Broker that PAIB assets held by
Pershing will not be deemed allowable assets for net capital purposes.
21.0 COMMUNICATION WITH CUSTOMERS
21.1 NOTICE TO CUSTOMERS. Pershing shall, upon the opening of an account
pursuant to paragraph 5 of this Agreement, mail to each customer a copy of
the Notice to Customers required by NYSE Rule 382(c).
21.2 CUSTOMER INQUIRIES AND COMPLAINTS. Broker and Pershing each agree
to forward to the other any written complaint received from a customer
regarding a function the other has agreed to perform pursuant to this
Agreement.
21.3 RESTRICTION ON ADVERTISING. Neither Pershing nor Broker shall
utilize the name of the other in any way without the other's prior written
consent nor shall either party employ the other's name in such a manner as to
create the impression that the relationship between them is anything other
than that of clearing broker and introducing broker. Broker shall not hold
itself out as an agent of Pershing or as a subsidiary or company controlled
directly or indirectly by or affiliated with Pershing.
22.0 TERMINATION OF AGREEMENT
This Agreement shall continue until terminated as hereinafter provided:
22.1 Termination Upon 90-Day Notice. This Agreement may be terminated by
either party without cause upon ninety days prior written notice delivered in
person or by registered or certified mail. If either party terminates the
Agreement pursuant to this subparagraph, Pershing shall have the right to
impose reasonable limitations upon Broker's activities during the period
between the giving of notice and the transfer of Broker's accounts.
22.2 CHANGE IN COMPENSATION SCHEDULE. If, pursuant to paragraph 18.4 of
this Agreement, Pershing shall make any unilateral change in the compensation
schedule described in that subparagraph, and that change causes the increase
in Pershing's compensation to exceed 10 percent during any calendar year,
Broker may, upon 15 days prior written notice to Pershing, terminate this
Agreement on the effective date of such unilateral change.
22.3 DEFAULT. If either party defaults in the performance of its
obligations under this Agreement, or otherwise violates the provisions of
this Agreement, the nondefaulting party may terminate this Agreement by
delivering written notice to the defaulting party (i) specifying the nature
of the default and (ii) notifying the defaulting party that unless the
default is cured within a period of ten days from receipt of the notice, this
Agreement will be terminated without further proceedings by the nondefaulting
party.
22.4 DISABILITY. This Agreement may be terminated by Pershing or Broker
immediately in the event that the other party is enjoined, disabled,
suspended, prohibited, or otherwise becomes unable to engage in the
securities business or any part of it by operation of law or as a result of
any administrative or judicial proceeding or action by the SEC, any state
securities law administrator, or any regulatory or self-regulatory
organization having jurisdiction over such party.
14
22.5 CONVERSION OF ACCOUNTS. In the event that this Agreement is
terminated for any reason, Broker shall arrange for the conversion of
Broker's and its customer accounts to another clearing broker or to Broker if
it becomes self-clearing. Broker shall give Pershing notice (the "Conversion
Notice") of (i) the name of the broker that will assume responsibility for
clearing services for Customers and Broker, (ii) the date on which such
broker will commence providing such services, (iii) Broker's undertaking, in
form and substance satisfactory to Pershing, that Broker's agreement with
such broker provides that such broker will accept on conversion all Broker
and customers accounts then maintained by Pershing, and (iv) the name of an
individual or individuals within new clearing broker's organization whom
Pershing may contact to coordinate the conversion. The Conversion Notice
shall accompany Broker's notice of termination given pursuant to this
paragraph. If Broker fails to give Conversion Notice to Pershing, Pershing
may give to Broker's customers such notice as Pershing deems appropriate of
the termination of this Agreement and may make such arrangements as Pershing
deems appropriate for transfer or delivery of customer and Broker accounts.
The expense of providing such notice and making such arrangements shall be
charged to Broker.
22.6 SURVIVAL. Termination of this Agreement in any manner shall not
release Broker or Pershing from any liability or responsibility to the other
with respect to transactions effected prior to the effective date of such
termination, whether or not claims relating to such transactions shall have
been made before or after such termination.
22.7 TERMINATION FEE. If Broker terminates this Agreement pursuant to
subparagraph 22.1 or 22.2 above, or Pershing terminates this Agreement
pursuant to subparagraph 22.3 or 22.4 above within the period specified in
Schedule A, Broker shall pay to Pershing a termination fee as stated in
Schedule A.
23.0 CONFIDENTIAL NATURE OF DOCUMENTS AND OTHER INFORMATION
Neither Pershing nor Broker shall disclose the terms of this
Agreement or information obtained as a result thereof to any outside party
except to regulatory or self-regulatory organizations with appropriate
jurisdiction, pursuant to judicial process or to authorized employees of the
other on a need-to-know basis. Any other publication or disclosure of the
terms of this Agreement may be made only with the prior written consent of
the other party. Broker and Pershing shall each maintain the confidentiality
of documents and information received from the other party pursuant to this
Agreement. Pershing and Broker each agree that any information regarding the
identity of the other's customers shall be kept confidential and not used by
the other except as required in connection with obligations under this
agreement.
Broker acknowledges that the services Pershing provides hereunder
involve Broker access to proprietary technology, trading and other systems,
and that techniques, algorithms and processes contained in such systems
constitute trade secrets and shall be safeguarded by Broker, and the Broker
shall exercise reasonable care to protect Pershing's interest in such trade
secrets. Broker agrees to make the proprietary nature of such systems known
to those of its consultants, staff, agents or clients who may reasonably be
expected to come into contact with such systems. Broker agrees that any
breach of this confidentiality provision may result in its being liable for
damages as provided by law.
24.0 ACTION AGAINST CUSTOMERS BY XXXXXXXX
Xxxxxxxx may, in its sole discretion and at its own expense, upon
written notice to Broker institute and prosecute in its name any action or
proceeding against any of Broker's customers in relation to any controversy
or claim arising out of Pershing's transactions with Broker or with Broker's
customers. Nothing contained in this Agreement shall be deemed either (a) to
require Pershing to institute or prosecute such an action or proceeding; or
(b) to impair or prejudice its right to do so, should it so elect, nor shall
the institution or prosecution of any such action or proceeding relieve
Broker of any liability or responsibility which Broker would otherwise have
had under this Agreement. Broker shall assign to Pershing its rights against
its customers to the extent requested by Pershing and necessary to effectuate
the provisions of this Paragraph.
15
25.0 NOTICES
Any notice or request required or permitted to be given under this
Agreement shall be sufficient if it is in writing and sent by hand or by
certified mail, return receipt requested, to the parties at the following
address:
Broker: Xxxxxx, Xxxx & Xxxxxxxx, Inc.
0000 Xxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xx. Xxxxx X. Xxxx, Xx.
Pershing: Pershing Division
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
0000 X. 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Attn: Xx. Xxxxx X. Xxxxxx
cc: Legal and Compliance Department
26.0 ARBITRATION
26.1 ARBITRATION REQUIREMENT. Any dispute between Broker and Pershing
that cannot be settled shall be taken to arbitration as set forth in
paragraph 26.3 below.
26.2 ARBITRATION DISCLOSURE.
- ARBITRATION IS FINAL AND BINDING ON THE PARTIES.
- THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT,
INCLUDING THE RIGHT TO JURY TRIAL.
- PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN AND
DIFFERENT FROM COURT PROCEEDINGS.
- THE ARBITRATORS' AWARD IS NOT REQUIRED TO INCLUDE FACTUAL
FINDINGS OR LEGAL REASONING AND ANY PARTY'S RIGHT TO APPEAL OR TO
SEEK MODIFICATION OF RULINGS BY THE ARBITRATORS IS STRICTLY
LIMITED.
- THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF
ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES
INDUSTRY.
26.3 ARBITRATION AGREEMENT.
ANY CONTROVERSY BETWEEN US ARISING OUT OF YOUR BUSINESS OR THIS
AGREEMENT SHALL BE SUBMITTED TO ARBITRATION CONDUCTED BEFORE THE NEW
YORK STOCK EXCHANGE, INC., OR THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS, INC., AND IN ACCORDANCE WITH THE RULES OBTAINING OF THE
SELECTED ORGANIZATION AND SHALL BE CONDUCTED AS A BROKER TO BROKER OR
MEMBER VS MEMBER DISPUTE. ARBITRATION MUST BE COMMENCED BY SERVICE
UPON THE OTHER PARTY OF A WRITTEN DEMAND FOR ARBITRATION OR A WRITTEN
NOTICE OF INTENTION TO ARBITRATE. THEREIN ELECTING THE ARBITRATION
TRIBUNAL.
16
NO PERSON SHALL BRING A PUTATIVE OR CERTIFIED CLASS ACTION TO
ARBITRATION, NOR SEEK TO ENFORCE ANY PRE-DISPUTE ARBITRATION AGREEMENT
AGAINST ANY PERSON WHO HAS INITIATED IN COURT A PUTATIVE CLASS ACTION
AND WHO IS A MEMBER OF A PUTATIVE CLASS AND WHO HAS NOT OPTED OUT OF
THE CLASS WITH RESPECT TO ANY CLAIMS ENCOMPASSED BY THE PUTATIVE CLASS
ACTION UNTIL: (i) THE CLASS CERTIFICATION IS DENIED; (ii) THE CLASS IS
DECERTIFIED; OR (iii) THE CUSTOMER IS EXCLUDED FROM THE CLASS BY THE
COURT. SUCH FORBEARANCE TO ENFORCE AN AGREEMENT TO ARBITRATE SHALL NOT
CONSTITUTE A WAIVER OF ANY RIGHTS UNDER THIS AGREEMENT EXCEPT TO THE
EXTENT STATED HEREIN.
27.0 GENERAL PROVISIONS
27.1 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the respective successors and assigns of Broker
and Pershing. No assignment of this Agreement by Broker shall be effective
unless Pershing's written consent shall be first obtained.
27.2 27.2 SEVERABILITY. If any provision or condition of this Agreement
shall be held to be invalid or unenforceable, the validity or enforceability
of the remaining provisions and conditions shall not be affected hereby.
27.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute a single agreement.
27.4 ENTIRE AGREEMENT/AMENDMENTS. This Agreement represents the entire
agreement between the parties with respect to the subject matter contained
herein. This Agreement may not be changed orally, but only by an agreement in
writing signed by the parties.
27.5 CAPTIONS. Captions herein are for convenience only and are not of
substantive effect.
27.6 APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York, without giving
effect to the conflicts of laws principles thereof.
27.7 CITATIONS. Any reference to the rules or regulations of the SEC,
the NYSE or any other regulatory or self-regulatory organization are current
citations. Any changes in the citations (whether or not there are any changes
in the text of such rules or regulations) shall be automatically incorporated
herein.
27.8 CONSTRUCTION OF AGREEMENT. Neither this Agreement nor the
performance of the services hereunder shall be considered to create a joint
venture or partnership between Pershing and Broker or between Broker and
other brokers for whom Pershing may perform the same or similar service.
27.9 THIRD PARTIES. This Agreement is between the parties hereto and is
not intended to confer any benefits on third parties, including, but not
limited to, customers of Broker.
27.10 NON-EXCLUSIVITY OF REMEDIES. The enumeration herein of specific
remedies shall not be exclusive of any other remedies. Any delay or failure
by a 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. 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.
27.11 SEC RELEASE 34-315ll PROVISION Pursuant to the interpretation of
Introducing Accounts on a Fully Disclosed Basis contained in SEC Release
34-41511, it is hereby agreed between Broker and Pershing that,
17
insofar as the "financial responsibility rules" of the SEC and Securities
Investor Protection Act only are applicable, the accounts Broker introduces
to Pershing on a fully disclosed basis shall be considered to be accounts of
Pershing and not Broker's accounts. Nothing in this paragraph will otherwise
change or affect the provisions of this Agreement which provide that the
customer account remains Broker's customer account for all other purposes,
including but not limited to, supervision, suitability and indemnification.
IN WITNESS WHEREOF the parties have hereto affixed their hands and
seals by their duly authorized officers on the day and date first above
written.
This Agreement contains a pre-dispute arbitration clause in paragraph 26 on
page 20. Broker acknowledges receiving a copy of this Agreement.
BROKER: Xxxxxx, Xxxx & Xxxxxxxx, Inc.
By: Xx. Xxxxx X. Xxxx, Xx. 4-13-99
Title: Senior Vice President
PERSHING DIVISION
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
By: Xx. Xxxxx X. Xxxxxx
Title: Senior Vice President
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[LOGO]
NETEXCHANGE-TM-: ADDENDUM TO FULLY DISCLOSED CLEARING AGREEMENT OF PERSHING
DIVISION OF XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
THIS ADDENDUM to Fully Disclosed Clearing Agreement of Pershing Division of
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation (Addendum), effective as
of the 13th day of May, 1999, is entered into by and between the Pershing
Division of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation (Pershing)
and Xxxxxx, Xxxx & Xxxxxxxx, Inc. (Broker).
For and in consideration of the mutual promises and covenants contained
herein, the receipt, sufficiency, and adequacy of which are hereby
acknowledged, the parties, intending to be legally bound, hereby contract and
agree as follows:
A. BACKGROUND AND PURPOSE. Pershing and Broker entered into a Fully
Disclosed Clearing Agreement of Pershing Division Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation, dated as of the 7th day of April, 1999 (the
Agreement), pursuant to which Pershing currently carries cash and margin
accounts of the customers of Broker introduced to Pershing by Broker and
accepted by Pershing, and clears transactions on a fully disclosed basis for
such accounts, all pursuant to the terms and conditions of the Agreement.
Pershing has now developed certain services and software, referred to as
NetExchange. There are three versions of NetExchange; one that is used
primarily by Broker's investment professional, whether agents or employees,
called NetExchange Pro-TM-, and two variations that are used primarily by its
customers called NetExchange Client-TM- (custom or non-custom). Pershing and
Broker desire to amend the Agreement to provide (among other things) for
Pershing to offer and Broker to obtain the benefit of certain of such
NetExchange services. However, Pershing shall continue to act solely as
clearing agent for Broker's transactions and nothing in this Addendum shall
alter Pershing's obligations with respect thereto. Similarly, Broker shall
continue to be responsible for all matters of supervision of its accounts and
representatives, know-your-customer and suitability obligations imposed on
Broker as the introducing broker/dealer for Broker's customers' accounts, and
all other obligations imposed by the Agreement.
B. REFERENCES TO AGREEMENT. This Addendum hereby amends the Agreement
by supplementing it with a new paragraph to be added to the end of the
Agreement, consisting of the provisions set forth below, which shall be
applicable solely with respect to the provision of NetExchange services or
NetExchange Software (as defined below) by Pershing, and the receipt of, and
payment for, such services and NetExchange Software by Broker. In the event
of a conflict between the terms of this Addendum and those of the Agreement,
the terms of the Agreement shall govern, except as to matters specifically
covered herein. The terms used herein that are defined in the Agreement shall
have the same meanings in this Addendum as are given them in the Agreement,
unless otherwise defined herein, and except that Agreement, as used in this
Section B means the Agreement as in effect immediately prior to the execution
of this Addendum.
1. NETEXCHANGE. Subject to receipt by Pershing of the Fees set forth
in the NetExchange Pricing Schedule, as amended by Pershing in its sole and
absolute discretion from time to time (attached hereto) and approval by
Pershing of Broker's home page (as defined below), Pershing will provide
NetExchange services and NetExchange Software (as defined below), features of
which may enable Broker's customers or its representatives to contact Broker
through Broker's Internet address. Broker's Internet address may either: (a)
tie directly to Broker's home page (as defined below) hosted on the Pershing
server or (b) tie directly to Broker's existing home page hosted on Broker's
server and then to Pershing's server via a leased telecommunications facility
or other means. The Pershing server would route the communications directly
to a point that links the Pershing server and the Broker's communication port
or server via a leased telecommunications facility, as applicable, and hand
them off to the Broker (or as the Broker otherwise directs). Broker will
determine which communications to direct to Pershing for handling. To
facilitate the use of NetExchange. upon receipt of payment as set forth in
the attached Schedule, Pershing shall provide the design and architecture for
the computerized screen or series of screens that customers or
representatives of Broker will view when contacting Broker using the Internet
(Broker's home page). For the NetExchange Client platform, the home page may
feature Broker's name and logo and an introduction (to be provided by Broker)
to the Broker's services and offerings and such other information as Pershing
may require or permit. Alternatively, at the request of Broker, Pershing may
accept Broker's proposed home page design, provided that Pershing determines,
in its sole discretion, that the proposed design and content meet with all
Pershing requirements. At Pershing's option and in Pershing's sole
discretion, Pershing may consult with third parties to assist in the design
and content of Broker' home page. In all cases, Pershing retains the right to
establish standards for the style and content of Broker's home page and to
modify
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such standards from time to time in its sole discretion. For the NetExchange
Client non-custom platform, there is no customization available. The Broker,
and the Broker-Pershing relationship is identified at initial point of entry.
2. OWNERSHIP OF NETEXCHANGE. As between Pershing and Broker, Pershing
shall at all times be and remain the sole and exclusive owner of the
NetExchange proprietary computer software, home page design(s),
methodologies, techniques, software libraries, and know-how used by Pershing
or incorporated into the NetExchange services, including all improvements,
modifications, or enhancements thereto (the NetExchange Software). Except
with respect to intellectual property rights in trademarks and copyrights
belonging to Broker, Pershing retains all rights, title and interest in and
to NetExchange Software and NetExchange services, including without
limitation, all applicable copyrights (including without limitation, the
exclusive right to reproduce, distribute copies of, display and perform the
copyrighted work and to prepare derivative works), copyright registrations
and applications, trademark rights (including without limitation,
registrations and applications), patent rights, trade names, mask-work
rights, trade secrets, moral rights, authors' rights, and all renewal and
extensions thereof, regardless of whether any of such rights arise under the
laws of the United States or any other state, country or jurisdiction. If at
any time Broker proposes or makes agreed-to modifications to the home page,
all copyrightable aspects thereof shall be deemed to be and treated as a work
made for hire within the meaning of the Copyright Act of 1976, as amended.
3. CONFIDENTIAL INFORMATION. The contents of this Agreement, including
all Schedules hereto, and the content and source-code and object-code
embodiments of the NetExchange Software, are confidential information and
subject to the provisions of the Agreement, as are any of the following
related thereto: recommendations, strategies, requirements, discoveries,
designs, inventions, computer software, processes, improvements,
developments, methods, formulae, factors and parameters and values of such
factors and parameters used in formulae, techniques, engineering, know-how,
trade secrets, systems, documentation, drawings, renderings, plans, artwork,
descriptions, specifications, historical or technical or research data,
custom-designed computer codes, proprietary computer codes, and proprietary
information of third parties (regardless of whether any such item is
susceptible to patent, copyright, or any other form of protection).
Notwithstanding anything in the Agreement to the contrary, Pershing may use
and disclose compiled statistical information for planning and other
purposes, provided that the identity of Broker and Broker's customers is not
discernible. In addition, Pershing may disclose information with respect to
Broker to third parties in connection with Pershing's development of
NetExchange, including Broker's home page.
4. DISCLAIMER OF WARRANTIES. BROKER EXPRESSLY AGREES THAT BROKER'S USE
OF NETEXCHANGE SERVICES AND NETEXCHANGE SOFTWARE PROVIDED FOR USE IN
ACCESSING NETEXCHANGE IS AT BROKER'S SOLE RISK. NEITHER PERSHING NOR ANY OF
ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, CONTRACTORS, AFFILIATES,
INFORMATION PROVIDERS, LICENSORS, OR OTHER SUPPLIERS PROVIDING DATA,
INFORMATION, SERVICES OR SOFTWARE, INCLUDING BUT NOT LIMITED TO THE NEW YORK
STOCK EXCHANGE, INC., WARRANTS THAT THE SERVICE WILL BE UNINTERRUPTED OR
ERROR FREE; NOR DO ANY OF THEM MAKE ANY WARRANTY AS TO THE RESULTS THAT MAY
BE OBTAINED FROM THE USE OF NETEXCHANGE SERVICES OR NETEXCHANGE SOFTWARE, OR
AS TO THE TIMELINESS, SEQUENCE, ACCURACY, COMPLETENESS. RELIABILITY OR
CONTENT OF ANY DATA, INFORMATION, SERVICES, OR TRANSACTIONS PROVIDED THROUGH
NETEXCHANGETM, OR WITH RESPECT TO ANY NETEXCHANGE SOFTWARE. THE NETEXCHANGE
SERVICE AND NETEXCHANGE'SOFTWARE IS PROVIDED ON AN AS IS, AS AVAILABLE BASIS,
WITHOUT WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, THOSE OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE,
OTHER THAN THOSE WARRANTIES WHICH ARE IMPLIED BY AND INCAPABLE OF EXCLUSION,
RESTRICTION OR MODIFICATION UNDER THE LAWS APPLICABLE TO THIS AGREEMENT.
5. RIGHTS IN DATA. Pershing warrants that it has the right to license
all of the products it will provide. Furthermore, Pershing warrants that all
of the NetExchange services and NetExchange software do not and will not
infringe upon any copyright, trademark, or other intellectual property right
of a third party.
6. ADDITIONAL BROKER RESPONSIBILITIES
6.1 ACCESS AND ACCESS SECURITY. Broker shall determine whether and
which of its customers, employees or agents shall have access to NetExchange.
Broker shall solely be responsible for the assignment, distribution, and
maintenance of all passwords, codes, and other security measures designed to
ensure that access to NetExchange is granted only to those individuals who
are authorized by Broker. Nothing in this paragraph shall affect or diminish
Pershing's right, in its sole discretion, to refuse to provide any or all
NetExchange services to Broker, its agents or employees or any customer(s) of
Broker.
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6.2 INDEMNIFICATION. The indemnification rights and responsibilities
shall apply to the provision of NetExchange exactly as it is set forth in the
Agreement. This indemnification shall include, but not be limited to: (a)
damages incurred as a result of an act or omission with respect to the
NetExchange security procedures then in effect by Pershing, by Broker, by a
customer of Broker, or by any other individual or entity accessing any account
or information of a customer of Broker; (b) any breach of the representation
and warranty set forth in Paragraph 6.4 and (c) any intellectual property
infringement by Broker or Broker's customers.
6.3 NO UNAUTHORIZED USE OF NETEXCHANGE. Broker will not copy,
modify, distribute or transfer (by any means), display, sublicense, rent,
reverse engineer, decompile or disassemble the NetExchange Software.
6.4 NO PROFESSIONAL USERS. Broker acknowledges that certain
information available via NetExchange Client cannot be viewed by an individual
who is a member of any exchange or the National Association of Securities
Dealers, or of any corporation of which an exchange owns a majority of the
capital stock, or of a member firm or member corporation of any exchange or
the National Association of Securities Dealers. Inc. or of any corporation,
firm or individual engaged in business of dealing either as a broker or a
principal in securities, bills of exchange, acceptances or other forms of
commercial paper (hereinafter Professional User). Broker acknowledges that
Broker is solely responsible for ensuring that no such individual views that
information except in their capacity as public customers. Broker represents
and warrants that Broker will not use or permit any other Professional User to
access those features of NetExchange Client from which they are prohibited
from viewing except in their capacity as public customers.
6.5 OPTIONS PRICE REPORTING AUTHORITY REQUIREMENTS. In the event
Broker intends to allow access to information concerning options contracts to
its customers or itself: Broker hereby certifies that, for each customer to
whom it instructs Pershing to provide access to information concerning options
contracts, it has obtained a written agreement in which the customer agrees
that he or she: (1) shall receive options information solely for such person's
own use, (2) shall not retransmit or otherwise furnish options information to
any other person, (3) shall acknowledge that options information is and shall
remain the property of the respective exchange or other market on which a
reported transaction took place or a reported quotation was entered and (4)
shall acknowledge that (i) neither the Options Price Reporting Authority
(OPRA), OPRA's processor nor any OPRA Participant guarantees the timeliness,
sequence, accuracy or completeness of any options last sale price, quotation
information or other market information provided by OPRA, (ii) neither OPRA,
OPRA's processor nor any OPRA Participant shall be liable in any way to such
customer, broker or any other person for any loss, damages, cost or expense
which may arise from any failure of performance by OPRA, OPRA's processor or
any OPRA Participant, or from any delays, inaccuracies, errors in or omissions
of, any Options Information, or in the transmission or delivery thereof,
whether or not due to any negligent act or omission on the part of OPRA,
OPRA's processor or any OPRA Participant, and (iii) in no event shall OPRA,
OPRA's processor or any OPRA Participant be liable for any incidental,
special, indirect, or consequential damages, including but not limited to lost
profits, trading losses, or damages resulting from inconvenience, or loss of
use of the Service. Such written agreement shall state that it is for the
express benefit of OPRA, OPRA's processor and each OPRA Participant.
In addition, Broker, on its own behalf, acknowledges its
understanding of OPRA's responsibilities under subparagraph (4) above. In
addition, Broker agrees that it shall maintain and preserve for at least three
years sufficient records to identify the names and addresses of its customers
to whom it is authorized to provide the Service, together with copies of all
customer agreements and billing records. At the request of OPRA, Broker agrees
to permit representatives of OPRA to have access to such records, and to
provide to OPRA any information that OPRA may reasonably request concerning
its customers.
Broker further acknowledges that its acknowledgements and agreements
as stated above should are for the express benefit of OPRA, OPRA's processor
and each OPRA participant.
6.6 RECEIPT OF INFORMATION FROM REALITY ONLINE INC. Broker
acknowledges that it has read and executed the agreement attached hereto as
the Reuters Schedule and thereby has the right to distribute the information
provided by Reality Online Inc.
7. LIMITATION OF LIABILITY
7.1 THE LIABILITY OF THE PARTIES SHALL BE LIMITED TO THE SAME EXTENT
AS IT IS LIMITED IN THE AGREEMENT.
7.2 Broker acknowledges and agrees that the fees charged by Pershing
reflect the allocation of risks including, but not limited to, the foregoing
limitation of liability. A modification of the allocation of risks set forth
in this Agreement would affect the fees charged by Pershing, and in
consideration of such fees, Broker agrees to such allocations of risks.
8. GRANT OF LICENSES
8.1 Broker hereby grants to Pershing a non-exclusive,
non-transferable, irrevocable, fully paid-up, worldwide license to use
Broker's trade name(s), trademark(s) and service xxxx(s) in connection with
the design and implementation of NetExchange.
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8.2 Pershing hereby grants to Broker a non-exclusive,
non-transferable, irrevocable, fully paid-up, worldwide license to use
copyrightable aspects of Broker's home page owned by Pershing, such use to be
limited to use solely for the purpose of using the NetExchange services and
solely in conjunction with this Agreement.
9. INJUNCTIVE RELIEF. In addition to all other remedies available at
law or in equity, either party shall be entitled to injunctive relief to
enforce the terms of this Addendum and Broker agrees not to raise as a defense
in any such action that that party would be adequately compensated by monetary
damages.
10. TERMINATION OF NETEXCHANGE SERVICE. The parties may terminate this
Addendum and these services pursuant to the provisions in the Agreement. In
addition, Pershing may block access to the use of NetExchange without prior
notice in the event such services are discontinued due to circumstances beyond
Pershing's control or to avoid systems or mechanical failure or due to
regulatory or legal mandate.
11. ADDITIONAL SERVICES. From time to time Pershing may introduce new
products and services or cause new products and services to be made available
through NetExchange. These products and services may include such things as
delayed securities quotes, investment research and news. Use of such products
and services shall be subject to payment of the fees determined by Pershing
and governed by the terms and conditions of this section 11.
In witness whereof, the parties have executed this Addendum.
PERSHING DIVISION OF XXXXXXXXX, BROKER: Xxxxxx, Xxxx & Xxxxxxxx, Inc.
XXXXXX & XXXXXXXX SECURITIES CORPORATION
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxx
Xxxxx X. Xxxxxx Xxxxx X. Xxxx
Its: SVP Its: COO
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ANY QUESTIONS REGARDING THE REALITY ONLINE INC. AGREEMENT SHOULD BE DIRECTED TO:
XX. XXXXX XXXXXXX, REALITY ONLINE INC., 0000 XXXXXXX XXXXXX, XXXXXXXXXX, XX
00000
(000) 000-0000 EXT. 8202
EXHIBIT B - REUTERS SERVICES - NETEXCHANGE-TM- PROFESSIONAL CLIENT AGREEMENT
REUTERS SERVICES - PROFESSIONAL CLIENT AGREEMENT, dated 05/07/99
between Reality Online Inc. a REUTERS Company ("Reality") with its principal
office at 0000 Xxxxxxx Xxx., Xxxxxxxxxx, XX 00000 and Xxxxxx, Xxxx & Xxxxxxxx,
Inc. (Client) with its principal offices at 0000 Xxx Xxxxxx, Xxxxx 000,
Xxxxxxx, XX 00000 (Client Address).
WHEREAS Client wishes to distribute the Reuters Services via a Net
Exchange-TM- Pro Site to Subscribers, as defined herein, NOW THEREFORE, in
consideration of the promises set forth below and the mutual agreements
contained herein and for other good and valuable consideration, the parties,
intending to be legally bound, agree as follows:
1. DEFINITIONS
1.1. CONTENT shall mean the text, information, data, images (still and
moving) and sound recordings included in the Reuters Services.
1.2. DISTRIBUTOR shall mean PC Financial Network, a service of Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation, with its principal office at Xxx
Xxxxxxxx Xxxxx, Xxxxxx Xxxx, XX 00000.
1.3. NET EXCHANGE PRO SITE shall mean a World Wide Web site developed,
operated and hosted by Distributor on behalf of Client, which site shall have
a password-protected area accessible only to Subscribers.
1.4. REUTERS SERVICES shall mean the Reuters North American Securities
News content delivered by Distributor via the NetExchange-TM- Site.
1.5. PRO SERVICE shall mean an electronic, subscription-based,
information service, which includes access to the Reuters Services, provided
by Distributor to Subscribers.
1.6. SUBSCRIBER shall mean a member of Clients firm, acting in a
professional status, who subscribes to the Pro Service via a NetExchange-TM-
Pro Site.
2. TERMS
2.1. Client shall ensure that all Subscribers agree not to copy all or
part of any of the Content except for purposes of downloading and/or printing
by Subscribers in the normal course of their brokerage business activities.
2.2. Client shall ensure that all Subscribers agree not to distribute,
disseminate or republish all or part of any of the Content in any hardcopy or
electronic form, including print, on-line services, CD-ROM, DVD and facsimile,
or in any other form, except for hardcopy or facsimile distribution by
Subscribers to their individual brokerage clients in the normal course of the
Subscribers brokerage business activities.
2.3. Client and its Subscribers acknowledge that Reuters will not be
liable for any damages (including special or consequential damages) of any
kind resulting in any way from (a) the use of the Content, or (b) failures,
delays or interruptions in the delivery of the Content or in the availability
of all or any portion thereof.
2.4. Client and its Subscribers acknowledge that Reuters does not warrant
the accuracy, completeness, currentness, merchantability or fitness for a
particular purpose of the Content.
2.5. Client and its Subscribers acknowledge that Reuters owns all rights
(including copyright), title and interest in the Content.
2.6. Client will be considered to have met its obligations hereunder by
providing the following text on all NetExchange-TM- Pro Site pages which
contain Content: Copyright Reuters, Ltd. Use is subject to the terms and
conditions of USER AGREEMENT, where the words User Agreement are a hyper-text
link which accesses a page containing the User Agreement (attached as Exhibit
1).
For: REALITY ONLINE INC. For: Xxxxxx, Xxxx & Xxxxxxxx, Inc.
By: By: Xxxxx X. Xxxx
Name: Name: Xxxxx X. Xxxx
Title: Title: COO
Date: Date: 5-21-99
23
Exhibit I - User Agreement
BY ACCESSING, DOWNLOADING, VIEWING OR USING ANY DATA FROM REUTERS YOU AGREE TO
THE TERMS OF THIS AGREEMENT WITH REUTERS, LTD (REUTERS). CONTINUED ACCEPTANCE
OF AND COMPLIANCE WITH THE TERMS OF THIS AGREEMENT ARE A CONDITION OF YOUR
RIGHT TO ACCESS OR USE THE DATA. ACCESSING OR USING THE DATA AFFIRMS YOUR
ACCEPTANCE OF THIS AGREEMENT AND ITS TERMS. IF YOU NOT DESIRE TO ACCEPT THE
TERMS OF THIS AGREEMENT, DO NOT ACCESS OR USE THE DATA AND EXIT NOW.
DATA LICENSE. In consideration of access to the Data, Reuters grants you a
non-exclusive, non-transferable and limited license to use the Data for your
own internal business or personal use for a period of thirty (30) days.
subject to all terms and conditions provided herein.
PROPRIETARY RIGHTS. You agree that all rights, title and interest (including
all copyrights, trademarks, service marks and other intellectual property
rights) in and to the Data, belong exclusively to Reuters.
DISCLAIMER. The Data is provided "as is" and without warranty of any kind.
Reuters does not warrant, guarantee or make any representations concerning the
Data, including accuracy, reliability, completeness, currentness,
functionality or otherwise. Reuters does not make any warranties, express or
implied, including, without limitation, any implied warranties of
merchantability and/or fitness for a particular purpose, with respect to the
Data. Reuters does not warrant the Data to be free of any error or defect.
YOU:
(1) assume the entire risk as to the suitably, use, results of use,
performance, accuracy, completeness, currentness and performance of the
Data;
(2) waive any claim of detrimental reliance upon the Data; and
(3) agree to independently verify, through other sources, the accuracy,
completeness and currentness of the Data.
LIMITED LIABILITY. Reuters entire liability, and your sole and exclusive
remedy, as to any defective Data shall be retransmission of the Data or
defective portion thereof. Reuters shall not be liable for any direct,
indirect, consequential or incidental damages (including damages for loss of
business profits, business interruption, loss of business information and the
like) arising out of your use or inability to use the Data, even if advised of
the possibility of such damages.
TERMINATION. This agreement shall remain in effect for thirty (30) days,
unless sooner terminated by Reuters. This agreement may be terminated at any
time by Reuters and shall automatically be terminated in the event you fail to
comply with any terms of this Agreement. The Proprietary Rights, Disclaimer
and Limited Liability provisions shall survive any termination of this
Agreement.
INJUNCTIVE RELIEF. You agree that legal remedies alone provide inadequate
protection of the Data and intellectual property rights embodied therein, and
that in addition to other relief Reuters may seek temporary or permanent
injunctions to enforce their respective rights. You hereby waive the
requirement of any bond in the event Reuters seeks injunctive relief.
SEVERABILITY. Any provision hereof found by a tribunal of competent
jurisdiction to be illegal or unenforceable shall be automatically conformed
to the minimum requirements of law and all other provisions shall remain in
full force and effect. Waiver of any provision hereof in one instance shall
not preclude enforcement on future occasions. Headings and subheadings are for
purposes of reference and convenience and have no substantive effect.
ENTIRE AGREEMENT. This Agreement: (1) constitutes the complete and exclusive
agreement among the parties with respect to the Data; and (2) supersedes all
other communications, representations, statements and understandings, whether
oral or written, among the parties concerning its subject matter.
* Whenever an asterisk follows the first use of a term, Paragraph I defines the
term.
OPTIONS PRICE REPORTING AUTHORITY
Subscriber Agreement
(Last Sale and Quotation Information)
TO THE PARTICIPANT EXCHANGES IN THE OPTIONS PRICE REPORTING AUTHORITY:
The undersigned ("Subscriber") hereby applies for the privilege of
receiving current options last sale information and current options quotation
information (the "Information") from a committee of Participant Exchanges
designated as the Options Price Reporting Authority ("OPRA") pursuant to a
plan for the consolidated reporting of last sale and quotation information in
eligible option contracts (the "Plan"), which Plan has been authorized by the
Securities and Exchange Commission. The Plan and the options price reporting
system described therein are administered by the Participant Exchanges through
OPRA. At the date of this Agreement, the Participant Exchanges are:
AMERICAN STOCK EXCHANGE, INC.
CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED
NEW YORK STOCK EXCHANGE, INC.
PACIFIC STOCK EXCHANGE, INCORPORATED
PHILADELPHIA STOCK EXCHANGE, INC.
For the purpose of this application, and as a condition of being approved
to receive the Information, Subscriber hereby represents and agrees with each
Participant Exchange as follows:
1. Subscriber's full name and business address is: Xxxxxx Xxxx & Xxxxxxxx
0000 Xxx Xxxxxx, Xxx. 000
Xxxxxxx, XX 00000
2. The business conducted by Subscriber is: Investment Banking/Broker
Dealer
3. For the privilege of receiving the Information, Subscriber agrees to pay
OPRA a fee in such amount and at such times as shall be established by OPRA
from time to time and set forth in a written notice to Subscriber plus any
applicable federal, state or local taxes. No increase in such fees shall be
effective less than thirty (30) days after written notice of such increase
is sent to Subscriber.
4. Subscriber acknowledges that the Information is and shall remain the
property of the respective Participant Exchange on which the reported
transaction took place or the reported quotation was entered and Subscriber
shall make no use of the Information except in compliance with the terms of
this Agreement.
5. Subscriber shall receive the Information only at its principal place of
business and/or its branch offices and only for its individual use in its
business. Subscriber shall not, without the prior approval of OPRA,
furnish the Information, nor permit the Information to be furnished, to any
other person or place.
6. Subscriber is not engaged in, and will not engage in, the operation of any
illegal business and will not use, or permit anyone else to use, the
Information for any illegal purpose.
7. Subscriber shall at all reasonable times permit OPRA, through its agents or
the agents of any of the Participant Exchanges, to have access to the
locations where the Information is received for the purpose of observing
the use made of the Information and to inspect all equipment and apparatus
used in connection therewith.
8. NEITHER OPRA, OPRA's PROCESSOR NOR ANY PARTICIPANT EXCHANGE GUARANTEES THE
TIMELINESS, SEQUENCE, ACCURACY OR COMPLETENESS OF ANY OPTIONS INFORMATION,
AND NEITHER OPRA, OPRA's PROCESSOR NOR ANY PARTICIPANT EXCHANGE SHALL BE
LIABLE IN ANY WAY TO VENDOR, TO ANY OF VENDOR'S CUSTOMERS, OR TO ANY OTHER
PERSON FOR ANY LOSS, DAMAGES, COST OR EXPENSE WHICH MAY ARISE FROM ANY
FAILURE OF PERFORMANCE BY OPRA, OPRA's PROCESSOR OR ANY PARTICIPANT
EXCHANGE, OR FROM ANY DELAYS, INACCURACIES, ERRORS IN, OR OMISSIONS OF ANY
OPTIONS
* Whenever an asterisk follows the first use of a term, Paragraph I defines the
term.
INFORMATION OR THE TRANSMISSION OR DELIVERY THEREOF, WHETHER OR NOT
DUE TO ANY NEGLIGENT ACT OR OMISSION ON THE PART OF OPRA, OPRA'S PROCESSOR
OR ANY PARTICIPANTEXCHANGE. IN NO EVENT SHALL OPRA, OPRA'S PROCESSOR OR ANY
PARTICIPANT EXCHANGE BE LIABLE FOR ANY INCIDENTAL, SPECIAL, INDIRECT OR
CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOST PROFITS, TRADING
LOSSES, OR DAMAGES RESULTING FROM INCONVENIENCE OR LOSS OF USE OF THE
SERVICE.
9. The Subscriber's privilege of receiving the Information hereunder shall
continue in force until the expiration of thirty (30) days after written
notice shall have been delivered by Subscriber to OPRA or by OPRA to
Subscriber of an intention to terminate this Agreement, unless sooner
terminated by OPRA in accordance with paragraph 10 hereof.
10. Notwithstanding the provisions of paragraph 9 above, Subscriber's privilege
of receiving the Information hereunder may be denied or terminated
forthwith at any time by OPRA upon a determination that Subscriber has
violated any provision of this Agreement or that such action is necessary
or appropriate in the public interest or for the protection of investors.
In the event OPRA does not approve Subscriber's application to receive the
Information or subsequently terminates Subscriber's privilege of receiving
the Information for reasons other than the non-payment of fees specified
from time to time by OPRA as provided in paragraph 3 hereof, such action
shall be taken only after Subscriber has been given notice and opportunity
for a hearing; provided, however, that OPRA may terminate Subscriber's
privilege of receiving the Information prior to such notice and hearing
where it is determined that immediate termination is appropriate and in the
public interest or for the protection of investors, in which event
Subscriber shall be entitled to notice and hearing as soon as practicable
following such termination. When Subscriber is adversely affected by final
action of OPRA pursuant to this paragraph, Subscriber shall be entitled to
have such action reviewed in accordance with the applicable rules and
regulations of the Securities and Exchange 'commission.
11. Nothing herein shall be deemed to prevent or restrict any Participant
Exchange from discontinuing to furnish options last sale information or
quotation information for dissemination pursuant to the Plan (referred to
above), nor to restrict OPRA from making such changes in the speed of
transmission, the characteristics of the electrical signals representing
the Information or the manner of disseminating the same, as OPRA shall from
time to time determine to be appropriate: but in the event of any such
discontinuance or change, OPRA shall give such notice thereof as is
reasonable under the circumstances.
12. Subscriber agrees that neither OPRA nor any Participant Exchange shall be
liable to it or to any other person, firm or corporation for any amount
which Subscriber may be obligated to pay the supplier or lessor of any
equipment through which Subscriber receives the Information upon the
termination of any agreement pursuant to which such equipment is furnished
to Subscriber.
13. Subscriber certifies the accuracy of the information provided herein and
agrees to inform OPRA promptly at its address set forth below of any
changes in such Information and to furnish OPRA any additional information
requested by it in connection with Subscriber's receipt of the Information.
14. The terms and conditions hereof shall be subject to any applicable
provisions of the Securities Exchange Act of 1934 (as amended) and any
rules and regulations promulgated thereunder.
Subscriber agrees that the provisions hereof shall extend and be applicable to
options last sale information or quotation information reported by any other
:exchange which commences the trading of options and becomes a Participant in
OPRA.
Dated: Name of Subscriber:
By:
B1LLING INFORMATION TO BE COMPLETED BY SUBSCRIBER
Notify OPRA promptly of any changes to the following information)
* Whenever an asterisk follows the first use of a term, Paragraph I defines the
term.
Subscriber Name:
Xxxx to the attention of:
Address:
Phone Number:
Fax Number:
Vendor providing service:
For purpose of qualifying for OPRA's reduced member subscriber fee, Subscriber
certifies that It is a member or associate member In good standing of the
following Participant Exchanges (check all that apply):
/ / American Stock Exchange
/ / Chicago Board Options Exchange
/ / New York Stock Exchange
/ / Pack Stock Exchange
/ / Philadelphia Stock Exchange
FOR OPRA USE ONLY
APPROVED:
Subscriber No. OPTIONS PRICE REPORTING
AUTHORITY
Location No. 000 XXXXX XXXXXXX XXXXXX
Start Date XXXXXXX, XXXXXXXX 00000
Number of Devices USA
(000)-000-0000
By
Date of Approval
Subscriber remains responsible for all fees due to OPRA hereunder, even if a
third party has agreed to pay such fees on behalf of Subscriber
* Whenever an asterisk follows the first use of a term, Paragraph I defines the
term.
AGREEMENT FOR RECEIPT OF CONSOLIDATED NETWORK A DATA
AND NYSE MARKET DATA
This Agreement permits the undersigned "Subscriber to arrange with
authorized vendors or with the New York Stock Exchange, Ink. ("NYSE"), as
appropriate to receive any one or more Types of Market Data* and to use that
Market Data for interrogation* display, tape* display or other purposes not
entailing retransmission. This Agreement governs whichever Type(s) of Market
Data, means of receipt and use(s) Subscriber receives, arranges and makes.
Subscriber and NYSE agree to all terms and conditions of this Agreement.
Subscriber Name: Xxxxxx Xxxx & Xxxxxxxx
0000 Xxx Xxxxxx, Xxx. 000
Xxxxxxx, XX 00000 XXX
Name and Title of Individual Signing: Xxxxx X . Xxxx
Billing address if different than above: same as above
Taxpayer ID or Social Security No. ###-##-####
Type of Business: Investment Banking
Tel. No. 000-000-0000
CHECK BOX IF MEMBER OF:
American Stock Exchange, Inc. / / Cincinnati Stock Exchange, Inc. / / New York Stock Exchange, Inc. / /
Boston Stock Exchange, Inc. / / Midwest Stock Exchange, Inc. / / Pacific Stock Exchange, Inc. / /
Chicago Board Options Exchange, Inc. / / National Association of / / Philadelphia Stock Exchange, Inc. / /
Securities Dealers, Inv.
SUBSCRIBER , NEW YORK STOCK EXCHANGE, INC.
On behalf of the CTA Plan Participants (in respect of CTA
Network A last sale information) and the CQ Plan
Participants (in respect of CQ Network A quotation
information) and on its own behalf solely (in respect of
NYSE Securities Information*)
By: Xxxxx X. Xxxx By:
Dated: Dated:
PART 1: PROVISIONS OF GENERAL APPLICABILITY
1. DEFINITIONS
(a) "Authorizing SRO" means each of the authorizing self-regulatory
organizations (i.e., each CTA Plan Participant, each CQ Plan Participant and
NYSE).
(b) "Interrogation," as used to differentiate devices and displays, refers
to (i) displaying Market Data for a security in response to Subscriber's
specific inquiries or (ii) displaying changes in Market Data as they occur
for a limited number of securities specified by Subscriber.
(c) "Market Data" means (i) CTA Network A last sale information, (ii) CQ
Network A quotation information, (iii) NYSE bond last sale information, (iv)
NYSE bond quotation information, (v) NYSE index information and (vi) each
other category of market information made available by NYSE as NYSE may
designate from time to time. Each of the above categories includes all
information that derives from the category's information. Stock and bond last
sale prices and information deriving from those prices cease to be "Market
Data" 15 minutes after the Authorizing SRO(s) make the prices available over
their low speed data transmission facilities. NYSE may alter such period from
time to time on 60 days' written notice to Subscriber.
(d) "NYSE Securities Information" means the Types of Market Data
enumerated or referred to in clauses (iii)-A) of Paragraph 1(c).
* Whenever an asterisk follows the first use of a term, Paragraph I defines the
term.
(e) "Person" includes any natural person or proprietorship or any
corporation, partnership or other organization.
(f) "Processor means the processor under the CTA Plan and CQ
(g) "Subscriber Device" means a component of Subscriber Equipment' that
provides an interrogation display, a tape display or both displays.
(h)"Subscriber Equipment" means any display device, computer, software,
wires, transmission facility or other equipment by which Subscriber receives,
displays or otherwise uses Market Data.
(i) "Tape," as used to differentiate devices and displays, refers to
displaying on a current and continuous basis (i) last sale prices as made
available over the data transmission facilities of one or more Authorizing
SROs or as retransmitted by an authorized vendor or (ii) a subset of the
prices so made available or retransmitted that Subscriber selects on the
basis of, for example, transaction size or security.
(j) "Type of Market Data" means the Market Data in any of the categories
enumerated or referred to in Paragraph 1(c).
2. PROPRIETARY NATURE OF DATA-Each Authorizing SRO asserts a proprietary
interest in its "Relevant Market Data" (i.e., the Market Data that it
furnishes to the Processor and in case of NYSE, that it otherwise makes
available).
3. NYSE CAPACITY; ENFORCEMENT-Whenever this Agreement requires "NYSE" to
take any action, or to receive any payment, information or notice, as to any
Type of Market Data, NYSE acts on behalf of the Authorizing SRO(s) for the
Type of Market Data. Any Authorizing SRO may enforce this Agreement as to its
Relevant Market Data, by legal proceeding or otherwise, against Subscriber
and may likewise proceed against any person that obtains its Relevant Market
Data other than as this Agreement contemplates. Subscriber shall pay the
reasonable attorneys' fees that any Authorizing SRO incurs in enforcing this
Agreement against Subscriber.
4. CHARGES
(a) PAYMENT-Subscriber shall pay in United States dollars the applicable
charge(s) as from time to time in effect, plus any applicable tax. Charges
apply for receipt of Market Data whether or not used.
(b) BILLING-Subscriber will be billed in advance for recurring data and
equipment charges on a periodic basis (monthly unless otherwise notified)
based upon information that Subscriber or authorized vendors report.
Subscriber will be billed upon incurrence for one-time charges, such as those
relating to installations, relocations and provision of additional equipment
facilities. Subscriber shall pay invoices promptly upon receipt. Errors in
and omissions from invoices, and errors or delays in sending, or failures to
send or receive, invoices, do not relieve Subscriber of its payment
obligations.
5. DATA SECURITY
(a) RETRANSMISSION PROHIBITED-Subscriber shall use Market Data only for
its individual use in its business. Subscriber shall neither furnish Market
Data to any other person nor retransmit Market Data among its premises.
(b) CONTROL OF EQUIPMENT-Subscriber shall assure that it or its partners
or officers and employees have sole control or physical possession of, and
sole access to Market Data through, Subscriber Equipment.
(c) DISPLAYS ACCESSIBLE TO THE GENERAL PUBLIC-Notwithstanding the
limitations of Paragraphs 5(a) and 5(b), Subscriber may install one or more
Subscriber Devices on enclosed portions of premises to which the general
public has access if Subscriber (i) controls the premises and access to them
and (ii) gives NYSE written notice of the installation. Subscriber may permit
individuals who are passing through or visiting the premises to operate or to
view the devices on a sporadic basis, and for limited periods of time, during
their temporary presence on the premises.
(d) EQUIPMENT SECURITY-Subscriber understands that this Paragraph 5
requires Subscriber to carefully locate and protect Subscriber Equipment.
Subscriber shall abide by any written requirements that NYSE specifies to
regulate the location or connection of Subscriber Equipment or to otherwise
assure compliance with this Paragraph 5. Subscriber guarantees that any
person installing or maintaining Subscriber Equipment will comply with this
Paragraph 5.
(e) INSPECTION-At any reasonable time, Subscriber shall assure that
authorized representatives of NYSE have access to the premises at which
Subscriber Equipment is located, and, in the presence of Subscriber's
officials, the rights to examine the equipment and to observe Subscriber's
use of the equipment.
6. DATA NOT GUARANTEED-Neither NYSE, any other Authorizing SRO nor the
Processor (the "disseminating parties") guarantees the timeliness, sequence,
accuracy or completeness of Market Data or of other market information or
messages disseminated by any disseminating party. No disseminating party
shall be liable in any way to Subscriber or to any other person for (a) any
inaccuracy, error or delay in, or omission of, (i) any such data, information
or message, or (ii) the transmission or delivery of any such data,
information or message, or (b) any loss or damage arising from or occasioned
by (i) any such inaccuracy, error, delay or omission (ii) of
* Whenever an asterisk follows the first use of a term, Paragraph I defines the
term.
nonperformance, or (iii) interruption in any such data, information or
message, due either to any negligent act or omission by any disseminating
party or to any "force majeure" (i.e., flood, extraordinary weather
conditions, earthquake or other act of God, fire, war, insurrection, riot,
labor dispute, accident, action of government, communications or power
failure, equipment or software malfunction) or any other cause beyond the
reasonable control of any disseminating party.
7. DISSEMINATION DISCONTINUANCE OR MODIFICATION-The Authorizing SROs may
discontinue disseminating any Type of Market Data, may change or eliminate
any transmission method and may change transmission speeds or other signal
characteristics. The Authorizing SROs shall not be liable for any resulting
liability, loss or damages to Subscriber.
8. DURATION; SURVIVAL-Subject to Paragraph 7, either Subscriber or NYSE
may terminate this Agreement in 30 days' written notice to the other. In
addition, this Agreement terminates 90 days after Subscriber no longer has
the ability to receive Market Data as contemplated by this Agreement.
Withdrawal of an Authorizing SRO other than NYSE from the CTA Plan and the CQ
Plan terminates this Agreement solely as to that Authorizing SRO. Withdrawal
of NYSE from the CTA Plan and CQ Plan terminates this Agreement as to all
other Authorizing SROs. Xxxxxxxxxx 0, 0(x), 0, 00(x), 15(e) and 16(e) survive
termination of this Agreement.
9. ENTIRE AGREEMENT: MODIFICATIONS-This writing contains the entire
agreement between the parties in respect of its subject matter. This
Agreement supersedes each previous agreement between Subscriber and NYSE
pursuant to which Subscriber has been receiving Market Data except insofar as
the earlier agreement covers receipt of Market Data through direct or
indirect access to the high speed line described in the CTA Plan or the CQ
Plan or any comparable high speed transmission facility that NYSE uses to
make NYSE Securities Information available. The parties may only modify this
Agreement by a writing signed by or on behalf of each of them.
10. ASSIGNMENTS-Subscriber may not assign all or part of this Agreement
without the written consent of NYSE.
11. GOVERNING LAW; CONSTRUCTION-The laws of the State of New York govem
this Agreement It shall be interpreted in accordance with those laws. In
prohibiting Subscriber from doing any act, this Agreement also prohibits
Subscriber from doing the act indirectly (e.g., by causing or permitting any
other person to the act).
12. APPLICABILITY OF 1934 ACT AND PLANS-This Agreement is subject to the
Securities and Exchange Act of 1934, the rules under that act, the CTA Plan
(as to CTA Network A last sale information) and the CQ Plan (as to CQ Network
A quotation information).
13. NOTICES; NOTIFICATION OF CHANGES-The parties shall send communications
relating to this
Agreement to: NEW YORK STOCK EXCHANGE, INC: SUBSCRIBER (AS ABOVE)
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Director of Market Data
Subscriber and NYSE may each change its address by written notice to the
other. Subscriber shall give NYSE prompt written notice of any change in (a)
the Subscriber information listed above, (b) any other information provided
to NYSE in connection with initiating the receipt of any Type of Market Data,
or (c) any description provided pursuant to Paragraph 15(d).
PART II: SPECIAL PROVISIONS
This Part II applies only to the extent that Subscriber's activity or
equipment falls within the scope of one or more of Paragraphs 14 through 16.
14. SECURITIES PROFESSIONALS: FURNISHING DATA TO CUSTOMERS AND BRANCH OFFICES
(a) SCOPE-This Paragraph 14 applies if Subscriber is a securities
professional, such as a registered broker-dealer or investment adviser, and
is an exception to Paragraphs 5(a), 5(b) and 5(c).
(b) LIMITED PROVISION OF DATA-Solely in the regular course of its
securities business, Subscriber may occasionally furnish limited amounts of
Market Data to its customers and clients and to its branch offices.
Subscriber may so furnish Market Data to its customers and clients who are
not on Subscriber's premises solely (i) in written advertisements,
educational material, sales literature or similar written communications. or
(ii) during telephonic voice communication not entailing the use of
computerized voice synthesization or similar technology. Subscriber may so
furnish Market Data to its branch offices solely (i) as provided in the
preceding sentence, or (ii) through manual entry of the data over its
teletype network. Subscriber shall not permit any customer or client to take
physical possession of Subscriber Equipment. Subscriber shall abide by any
additional limitations that NYSE specifies in writing.
* Whenever an asterisk follows the first use of a term, Paragraph I defines the
term.
15. REPORTING: RECORDS: EQUIPMENT DESCRIPTION
(a) SCOPE-This Paragraph 15 applies whenever an authorized vendor cannot
know (e.g., by virtue of installing equipment or recognizing electronically a
unique device identifier) all information necessary to xxxx Subscriber for
applicable charge(s). For example, this Paragraph 15 typically applies to (i)
Subscriber Devices not leased from NYSE or an authorized vendor, (ii)
portable Subscriber Devices and Subscriber Devices that use portable
components (e.g., software) to receive Market Data and (iii) Subscriber's
receipt of Market Data through synthesized voice responses over telephones.
(b) REPORTING-Subscriber shall furnish to NYSE in writing such
information, in such form and at such times, as NYSE may reasonably specify
from time to time to permit billing of Subscriber for applicable charge(s).
However, if an authorized vendor provides Market Data to any Subscriber
Device, Subscriber shall furnish information regarding the device to the
vendor instead of NYSE unless NYSE notifies Subscriber otherwise in writing.
(c) RECORDS-Subscriber shall maintain the records upon which it bases its
reporting for two years following the period to which the records relate.
Solely to monitor Subscriber's compliance with this Paragraph 15, authorized
representatives of NYSE may examine and verify those records at any
reasonable time in the presence of Subscriber's officials.
(d) EQUIPMENT DESCRIPTIONS-Upon NYSE's written request, Subscriber shall
provide NYSE with a description acceptable to NYSE of any Subscriber
Equipment that an authorized vendor or an Authorizing SRO does not supply.
(e) INDEMNIFICATION-Subscriber shall indemnify and hold harmless each
Authorizing SRO from and against any liability, loss or damages caused by (i)
any inaccuracy in or omission from, (ii) Subscriber's failure to furnish or
to keep, or (iii) Subscribers delay in furnishing or keeping, any report or
record that this Paragraph 15 requires. Subscriber shall do so even if
Subscriber depends on information from a third party and the third party
caused the inaccuracy, omission, failure or delay. Without limiting the
generality of the foregoing, if NYSE determines that, as a consequence of any
such inaccuracy, omission, failure or delay, applicable Subscriber charges
were not billed when incurred, Subscriber may be billed for those charges and
Subscriber shall promptly pay those charges plus any applicable tax.
16. EQUIPMENT SUPPLIED BY AUTHORIZING SROS
(a) SCOPE: DEFINITION This Paragraph 16 applies to Subscriber Equipment
that one or more Authorizing SROs supply ("SRO Equipment").
(b) OWNERSHIP-The Authorizing SRO(s) or their supplier(s) own SRO
Equipment. Subscriber shall not relocate, remove or alter SRO Equipment, or
attach to SRO Equipment any equipment other than authorized equipment that an
authorized vendor supplies, without NYSE's written consent. Subscriber shall
return SRO Equipment in the same condition as it was when installed except
for normal wear and tear and for failures for which the Authorizing SROs are
responsible under Paragraph 16(d).
(c) ACCESS TO PREMISES-Subscriber shall assure that authorized
representatives of the Authorizing SRO's and of their suppliers and service
contractors may install, repair, maintain, relocate and replace SRO
Equipment, and may remove any SRO Equipment that Subscriber no longer wants
or to which it is no longer entitled, at any reasonable time.
(d) SITE PREPARATION AND MAINTENANCE-Subscriber shall prepare the site
for SRO Equipment in a manner acceptable to the Authorizing SROs and shall
bear all costs of providing adequate space and power. The authorizing SROs
shall maintain SRO Equipment subject to applicable charges. Maintenance
includes repair or replacement of failed SRO Equipment and parts as
necessary. Extraordinary charges may apply if Subscriber caused the failure.
(e) WARRANTY AND SCOPE OF LIABILITY-THE AUTHORIZING SROS PROVIDE NO
WARRANTY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED
WARRANTY OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. Paragraph
16(d) sets forth the Authorizing SROs' entire liability for performance of
SRO Equipment. The Authorizing SROs' liability to Subscriber for any
liability, loss or damages relating to SRO Equipment other than for the cost
of maintaining, repairing or replacing SRO Equipment, whether based in
contract, in tort (including negligence and strict liability) or any other
theory, shall in the aggregate not exceed the lesser of (i) $1000 or (ii) the
total charges to Subscriber under this Agreement for the period preceding the
breach or injury. The foregoing limitations do not apply to personal injury
claims. In no event shall any Authorizing SRO be liable (i) for any indirect,
incidental, special, consequential or punitive liability, loss or damages
relating to SRO Equipment, regardless of the form of the action and
foreseeability of the liability, loss or damages, or (ii) for any liability,
loss or damages due to any "force majeure" (see Paragraph 6) or for any other
cause beyond the reasonable control of the Authorizing SRO.
* Whenever an asterisk follows the first use of a term, Paragraph I defines the
term.
AMERICAN STOCK EXCHANGE SERVICE ORDER FORM
VENDOR NAME___________________CONTACT NAME__________________
DATE SENT_____________________PHONE NUMBER__________________FAX NUMBER__________
MARKET DATA SERVICES
Phone: 000-000-0000 Fax: 000-000-0000
E-mail: Xxxxxxxx Xxxxxxx: xxxxxxxx@xxxx.xxx
Xxxx Jalcubowski: xxxxxxxxx@xxxx.xxx
Xxxxxxxxx Xxxxxx: xxxxxxx@xxxx.xxx
A m e x.
PLEASE IDENTIFY:
/ / Request For Approval - New Account / / Name Change / / Relocation
/ / New Location / / Vendor Account Number Change / / Billing Address Change
If a name change, include old name & vendor account # here: _______________
* VERY IMPORTANT: Customer's Existing Amex Account Number: 17996 TYPE A3
--------------
Customer's Broker Dealer Number: 28188
---------------------
CUSTOMER NAME: XXXXXX XXXX & XXXXXXXX
-------------------------------------------------------
BILLING INFORMATION (Not required if Amex account # is supplied above)**:
Contact ______________________________ Phone # ______________________________
Street Address________________________ Floor/Suite __________________________
City__________________________________ State______Country_______Zip Code_____
SERVICE LOCATION (Required):
Vendor Account # _____________________
Contact ______________________________ Phone # ______________________________
Street Address________________________ Floor/Suite __________________________
City__________________________________ State______Country_______Zip Code_____
Notes:
* If a Member Firm, a Broker Dealer Number must be provided in order for member
rates to apply.
* Attach an addendum if there is a third party payor.
* Whenever an asterisk follows the first use of a term, Paragraph I defines the
term.
AMERICAN
STOCK EXCHANGE MARKET COMMUNICATIONS AGREEMENT FOR RECEIPT OF
00 Xxxxxxx Xxxxx Tel.: (000) 000-0000 CONSOLIDATED NETWORK X XXXX XXX
Xxx Xxxx, Xxx Xxxx 00000-0000 Fax: (000) 000-0000 (2086) AMEX MARKET DATA
This Agreement permits the undersigned "Subscriber" to arrange with authorized
vendors or with the American Stock Exchange, Inc. ("AMEX"), as appropriate, to
receive any one or more Types of Market Data' and to use that Market Data for
interrogation' display, tape' display or other purposes not entailing
retransmission. This Agreement governs whichever Type(s) of Market Data, means
of receipt and use(s) Subscriber receives, arranges and makes. Subscriber and
AMEX agree to all terms and conditions of this Agreement.
(Type or Print)
Taxpayer ID or Social Security Number.
Subscriber's Name: Xxxxxx Xxxx & Xxxxxxxx ###-##-####
(Company Name)
Address: 0000 Xxx Xxxxxx, Xxx. 000 Type of Business: Investment Banking
City, State ,Zip: Xxxxxxx, XX 00000 Tel. No. 000-000-0000
Fax No. 000-000-0000
Country: USA
SUBSCRIBER
Name: Xxxxxx, Xxxx & Xxxxxxxx (Individual Name)
Title: COO
By: Xxxxx X. Xxxx
Dated: 5-21-99
Indicate following memberships:
American Stock Exchange, Inc. / / Chicago Stock Exchange, Inc. / / New York Stock Exchange, Inc. / /
Boston Stock Exchange, Inc. / / Cincinnati Stock Exchange, Inc. / / Pacific Stock Exchange, Inc. / /
Chicago Board Options Exchange, Inc. / / National Association of / / Philadelphia Stock Exchange, Inc. / /
Securities Dealers, Inc.
PART 1: PROVISIONS OF GENERAL APPLICABILITY
1. DEFINITIONS
(a) "Authorizing SRO" means each of the authorizing self-regulatory
organizations (i.e., each CTA Plan Participant, each CQ Plan Participant and
AMEX).
(b) "Interrogation", as used to differentiate devices and displays,
refers to (i) displaying Market Data for a security in response to
Subscriber's specific inquiries or (ii) displaying changes in Market Data as
they occur for a limited number of securities specified by Subscriber..
(c) "Market Data" means (i) CTA Network Blast sale information, (ii) CQ
Network B quotation information, (iii) AMEX Index Information and (iv) each
other category of market information made available by AMEX as the AMEX may
designate from tire to time. Each of the above categories includes all
information that derives from the category's information. Last sale prices
and information deriving from those prices cease to be "Market Data" 15
minutes after the Authorizing SRO(s) make the prices available over their low
speed data transmission facilities. AMEX may alter such period from time to
time on 60 days' written notice to Subscriber.
(d) "AMEX Securities Information" means the Types of Market Data
enumerated or referred to in clauses (iii) and (iv) of Paragraph 1(c).
(e) "Person" includes any natural person or proprietorship or any
corporation, partnership or other organization.
(f) "Processor" means the processor under the CTA Plan and CQ Plan.
(g) "Subscriber Device" means a component of Subscriber Equipment' that
provides an interrogation display, a tape display or both displays.
(h) "Subscriber Equipment" means any display device, computer, software,
wires, transmission facility or other equipment by which Subscriber receives,
displays or otherwise uses Market Data.
* Whenever an asterisk follows the first use of a term, Paragraph I defines the
term.
(i) "Tape", as used to differentiate devices and displays, refers to
displaying on a current and continuous basis (i) Market Data as currently made
available (or as may be made available in the future) over the data transmission
facilities of one or more Authorizing SROs or as retransmitted by an authorized
vendor or (ii) a subset of the Market Data so made available or retransmitted
that Subscriber selects on the basis of, for example, transaction size or
security.
(j) "Type of Market Data" means the Market Data in any of the categories
enumerated or referred to in Paragraph 1(c).
2. PROPRIETARY NATURE OF DATA - Each Authorizing SRO asserts a proprietary
interest in its "Relevant Market Data" (i.e., tile Market Data that it furnishes
to the Processor and in case of AMEX, that it otherwise makes available).
3. AMEX CAPACITY; ENFORCEMENT - Whenever this Agreement requires "AMEX" to
take any action, or to receive any payment, information or notice, as to any
Type of Market Data, AMEX acts on behalf of the Authorizing SRO(s) for the Type
of Market Data Any Authorizing SRO may enforce this Agreement as to its Relevant
Market Data, by legal proceeding or otherwise, against Subscriber and may
likewise proceed against any person that obtains its Relevant Market Data other
than as this Agreement contemplates. Subscriber shall pay the reasonable
attorneys' fees that any Authorizing SRO incurs in enforcing this Agreement
against Subscriber.
4. CHARGES
(a) PAYMENT - Subscriber shall pay in United States dollars the applicable
charge(s) as from time to time in effect, plus any applicable tax. Charges apply
for receipt of Market Data whether or not used.
(b) BILLING - Subscriber will be billed in advance fm recurring data and
equipment charges on a periodic basis (monthly unless otherwise notified) based
upon information that Subscriber or authorized vendors report Subscriber will be
billed upon incurrence for one-time charges, such as those relating to
installations, relocations and provision of additional equipment facilities.
Subscriber shall pay invoices promptly upon receipt- Errors in and omissions
from invoices, and errors or delays in sending, or failures to send or receive,
invoices, do not relieve subscriber of its payment obligations.
5. DATA SECURITY
(a) RETRANSMISSIONS PROHIBITED - Subscriber shall use Market Data only for its
individual use in its business. Subscriber shall neither furnish Market Data to
any other person nor retransmit Market Data among its premises.
(b) CONTROL OF EQUIPMENT - Subscriber shall assure that it or its partners or
officers and employees have sole control or physical possession of, and sole
access to Market Data through, Subscriber Equipment.
(c) DISPLAYS ACCESSIBLE TO THE GENERAL PUBLIC -Notwithstanding the limitations
of Paragraphs 5(a) and 5(b), subscriber may install one or more Subscriber
Devices on closed portions of premises to which the general public has access if
Subscriber (i) controls the premises and access to them and (ii) gives AMEX
written notice of the installation. Subscriber permit individuals who are
passing through or visiting the premises to operate or to view the devices on a
sporadic basis, and for limited periods of time, during their temporary presence
un the premises.
(d) EQUIPMENT SECURITY - Subscriber understands that this Paragraph 5 requires
Subscriber to carefully locate and protect Subscriber Equipment. Subscriber
shall abide by any written requirements that AMEX specifies to regulate the
location or connection of Subscriber Equipment or to otherwise assure compliance
with this Paragraph 5. Subscriber guarantees that any person installing or
maintaining Subscriber Equipment will comply with this Paragraph 5.
(e) INSPECTION - At any reasonable time, Subscriber shall assure that
authorized representatives of AMEX have access to the premises at which
Subscriber Equipment is located, and, in the presence of Subscriber's officials,
the rights to examine the equipment and to observe Subscriber's use of the
equipment.
6. DATA NOT GUARANTEED - Neither AMEX, any other Authorizing SRO nor the
Processor (the "disseminating parties') guarantees the timeliness, sequence,
accuracy or completeness of Market Data or of other market information or
messages disseminated by any disseminating party. No disseminating party shall
be liable in any way to Subscriber or to any other person for (a) any
inaccuracy, error or delay in, or omission of, (i) any such data, information or
message or (ii) the transmission or delivery of any such data, information or
message, or (b) any loss or damage arising from or occasioned by (i) any such
inaccuracy, error, delay or omission, (i) non-performance, or (iii) interruption
in any such data, information or message, due either to any negligent act or
omission by any disseminating party or to any "force majeure" (i.e., flood,
extraordinary weather conditions, earthquake or other act of God, fire, war,
insurrection, riot, labor dispute, accident, action of government,
communications or power failure, equipment or software malfunction) or any other
cause beyond the reasonable control of any disseminating party.
7. DISSEMINATION DISCONTINUANCE OR MODIFICATION - The Authorizing SROs may
discontinue disseminating any Type of Market Data, may change or eliminate any
transmission method and may change transmission speeds or other signal
characteristics. The Authorizing SROs shall not be liable for any resulting
liability, loss or damages to Subscriber.
8. DURATION; SURVIVAL - Subject to Paragraph 7, either Subscriber or AMEX may
terminate this Agreement on 30 days' written notice to the other. In addition,
this Agreement terminates 90 days after Subscriber no longer has the ability to
receive Market Data as contemplated by this Agreement Withdrawal of an
Authorizing SRO other than AMEX from the CTA Plan and the CQ Plan terminates
this Agreement solely as to that Authorizing SRO. Withdrawal of AMEX from the
CTA Plan and CQ Plan terminates this Agreement as to all other Authorizing SROs.
Xxxxxxxxxx 0, 0(x), 0, 00(x), 15(e) and 16(e) survive termination of this
Agreement.
9. ENTIRE AGREEMENT; MODIFICATIONS - This writing contains the entire
agreement between the parties in respect of its subject matter. This Agreement
supersedes each previous agreement between Subscriber and AMEX pursuant to which
Subscriber has been receiving Market Data except insofar as the earlier
agreement covers receipt of Market Data through direct or indirect access to the
high speed line described in the CIA Plan or the CQ Plan or any comparable high
speed transmission facility that AMEX uses to make Market Data available. The
parties may only modify this Agreement by a writing signed by or on behalf of
each of them.
10. ASSIGNMENTS - Subscriber may not assign all or part of this Agreement
without the written consent of AMEX.
11. GOVERNING LAW; CONSTRUCTION - The laws of the State of New York govern
this Agreement. It shall be interpreted in accordance with those laws. In
prohibiting Subscriber from doing any act, this Agreement also prohibits
Subscriber from doing the act indirectly (e.g., by causing or permitting any
other person to do the act).
12. APPLICABILITY OF 1934 ACT AND PLANS - This Agreement is subject to the
Securities and Exchange Act of 1934, the rules under that act, the CTA Plan (as
to CTA Network B fast sale information) and the CQ Plan (as to CQ Network B
quotation information).
13. NOTICES; NOTIFICATION OF CHANGES - The parties shall send communications
relating to this Agreement to:
American Stock Exchange, Inc. Subscriber (as above)
00 Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Market Communications
* Whenever an asterisk follows the first use of a term, Paragraph I defines the
term.
Subscriber and AMEX may each change its address by written notice to the
other. Subscriber shall give AMEX prompt written notice of any change in (a)
the Subscriber information listed above, (b) any other information provided
to AMEX in connection with initiating the receipt of any Type of Market Data
or (c) any description provided pursuant to Paragraph 15(d).
PART II: SPECIAL PROVISIONS
This Part II applies only to the extent that Subscriber's activity or equipment
falls within the scope of one or more of Paragraphs 14 through 16.
14. SECURITIES PROFESSIONALS: FURNISHING DATA TO CUSTOMERS AND BRANCH OFFICES
(a) SCOPE - This Paragraph 14 applies if Subscriber is a securities
professional, such as a registered broker-dealer or investment adviser, and is
an exception to Paragraphs 5(a), 5(b) and 5(c).
(b) LIMITED PROVISION OF DATA - Solely in the regular course of its
securities business, Subscriber may occasionally furnish limited amounts of
Market Data to its customers and clients and to its branch offices. Subscriber
may so furnish Market Data to its customers and clients who are not on
Subscriber's premises solely (i) in written advertisements, educational
material, sales literature or similar written communications or (ii) during
telephonic voice communication not entailing the use of computerized voice
synthesization or similar technology. Subscriber may so furnish Market Data to
its branch offices solely (i) as provided in the preceding sentence or (ii)
through manual entry of the data over its teletype network. Subscriber shall not
permit any customer or client to take physical possession of Subscriber
Equipment. Subscriber shall abide by any additional limitations that AMEX
specifies in writing.
15. REPORTING; RECORDS; EQUIPMENT DESCRIPTION
(a) SCOPE - This Paragraph 15 applies whenever an authorized vendor cannot
know (e.g., by virtue of installing equipment or recognizing electronically a
unique device identifier) all information necessary to xxxx Subscriber for
applicable charge(s). For example, this Paragraph 15 typically applies to (i)
Subscriber Devices not leased from AMEX or an authorized vendor, (ii) portable
Subscriber Devices and Subscriber Devices that use portable components (e.g.,
software) to receive Market Data and (iii) Subscriber's receipt of Market Data
through synthesized voice responses over telephones.
(b) REPORTING- Subscriber shall furnish to AMEX in writing such information,
in such form and at such times, as AMEX may reasonably specify from time to time
to permit billing of Subscriber for applicable charge(s). However, if an
authorized vendor provides Market Data to any Subscriber Device, Subscriber
shall furnish information regarding the device to the vendor instead of AMEX
unless AMEX notifies Subscriber otherwise in writing.
(c) RECORDS - Subscriber shall maintain the records upon which it bases its
reporting for two years following the period to which the records relate. Solely
to monitor Subscriber's compliance with this Paragraph 15, authorized
representatives of AMEX may examine and verify those records at any reasonable
time in the presence of Subscriber's officials.
(d) EQUIPMENT DESCRIPTIONS - Upon AMEX's written request, Subscriber shall
provide AMEX with a description acceptable to AMEX of any Subscriber Equipment
that an authorized vendor or an Authorizing SRO does not supply.
(e) INDEMNIFICATION - Subscriber shall indemnify and hold harmless each
Authorizing SRO from and against any liability, loss or damages caused by (i)
any inaccuracy in or omission from, (ii) Subscriber's failure to furnish or to
keep, or (ii) Subscriber's delay in furnishing or keeping, any report or record
that this Paragraph 15 requires. Subscriber shall do so even if Subscriber
depends on information from a third party and the third party caused the
inaccuracy, omission, failure or delay. Without limiting the generality of the
foregoing, if AMEX determines that, as a consequence of any such inaccuracy,
omission, failure or delay, applicable Subscriber charges were not billed when
incurred, Subscriber may be billed for those charges and Subscriber shall
promptly pay those charges plus any applicable tax.
16. EQUIPMENT SUPPLIED BY AUTHORIZING SROS
(a) SCOPE: DEFINITION - This Paragraph 16 applies to Subscriber Equipment
that one or more authorizing SROs supply ("SRO Equipment").
(b) OWNERSHIP - the Authorizing SRO(s) or their suppliers) own SRO Equipment.
Subscriber shall not relocate, remove or alter SRO Equipment, or attach to SRO
Equipment any equipment other than authorized equipment that an authorized
vendor supplies, without AMEX's written consent. Subscriber shall return SRO
Equipment in the same condition as it was when installed except for normal wear
and tear and for failures for which the Authorizing SROs are responsible under
Paragraph 16(d).
(c) ACCESS TO PREMISES - Subscriber shall assure that authorized
representatives of the Authorizing SROs and of their suppliers and service
contractors may, install, repair, maintain, relocate and replace SRO Equipment,
and may remove any SRO Equipment that Subscriber no longer wants or to which it
is no longer entitled, at any reasonable time.
(d) SITE PREPARATION AND MAINTENANCE - Subscriber shall prepare the site for
SRO Equipment in a manner acceptable to the Authorizing SROs and shall bear all
costs of providing adequate space and power. The Authorizing SROs shall maintain
SRO Equipment subject to applicable charges. Maintenance includes repair or
replacement of failed SRO Equipment and parts as necessary. Extraordinary
charges may apply if Subscriber caused the failure.
(e) WARRANTY AND SCOPE OF LIABILITY - THE AUTHORIZING SROs PROVIDE NO
WARRANTY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATTON, IMPLIED WARRANTY OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. Paragraph 16(d) sets forth
the Authorizing SROs' entire liability for performance of SRO Equipment. The
Authorizing SROs' liability to Subscriber for any liability, loss or damages
relating to SRO Equipment other than for the cost of maintaining, repairing or
replacing SRO Equipment, whether based in contract, in tort (including
negligence and strict liability) or any other theory, shall in the aggregate not
exceed the lesser of (i) $1,000 or (ii) the total charges to Subscriber under
this Agreement for the period preceding the breach or injury. The foregoing
limitations do not apply to personal injury claims. In no event shall any
Authorizing SRO be liable (i) for any indirect, incidental, special,
consequential or punitive liability, loss or damages relating to SRO Equipment,
regardless of the foam of the action and foreseeabilitv of the liability, loss
or damages or (ii) for any liability, loss or damages due to any "force majeure"
(see Paragraph 6) or for any other cause beyond the reasonable control of the
Authorizing SRO.
* Whenever an asterisk follows the first use of a term, Paragraph I defines the
term.
THE VENDOR AND ITS AGENTS MAY NOT MODIFY OR WAIVE ANY TERM OF THIS
AGREEMENT. ANY ATTEMPT TO MODIFY THIS AGREEMENT, EXCEPT BY NASDAQ, IS VOID.
THE NASDAQ STOCK MARKET, INC. ("NASDAQ") CONSOLIDATED SUBSCRIBER AGREEMENT
1. The word "CORPORATIONS" means The Nasdaq Stock Market, Inc. and its
affiliates. The word "INFORMATION" means certain data and other information:
relating to securities or other financial instruments, products, vehicles or
devices; or relating to Persons regulated by the Corporations or to
activities of the Corporations; or gathered by the Corporations from other
sources. The word "OR" includes the word "AND". The phrase "CLAIMS OR LOSSES"
means any and all liabilities, obligations, losses, damages, penalties,
claims, actions, suits, costs, judgments, settlements, and expenses of
whatever nature, whether incurred by or issued against an indemnified party
or a third party, including, without limitation, (1) indirect, special,
punitive, consequential or incidental loss or damage, (including, but not
limited to, trading losses, loss of anticipated profits, loss by reason of
shutdown in operation or increased expenses of operation, or other indirect
loss or damage) and (2) administrative costs, investigatory costs, litigation
costs, and auditors' and attorneys' and fees and disbursements (including
in-house personnel). The word "PERSON" means any natural person,
proprietorship, corporation, partnership, or other entity whatsoever. The
phrase "NON-PROFESSIONAL SUBSCRIBER" means any natural person who is neither:
(a) registered or qualified in any capacity with the SEC, the Commodities
Futures Trading Commission, any state securities agency, any securities
exchange or association, or any commodities or futures contract market or
association; (b) engaged as an "investment advisor" as that term is defined
in Section 201 (11) of the Investment Advisors Act of 1940 (whether or not
registered or qualified under that Act); nor, (c) employed by a bank or other
organization exempt from registration under federal or state securities laws
to perform functions that would require registration or qualification if such
functions were performed for an organization not so exempt. The phrase
"PROFESSIONAL SUBSCRIBER" means all other persons who do not meet the
definition of Non-Professional Subscriber. When it appears alone, the word
"SUBSCRIBER" encompasses all Non-Professional and Professional Subscribers.
The phrase "VENDOR'S SERVICE" means the service from a vendor, including the
data processing equipment, software, and communications facilities related
thereto, for receiving, processing, transmitting, using and disseminating the
Information to or by Subscriber.
2. Subscriber is granted the right to receive from Nasdaq the Information
under the terms stated herein or in the NASD Rules. "NASD Rules" shall mean
all applicable laws (including intellectual property, communications, and
securities laws), statutes, and regulations, the rules and regulations of the
SEC, the rules and regulations of the Corporations including, but not limited
to, those requirements established by the Corporations' rule filings (with
such SEC approval as may be required), the Corporations' decisions and
interpretations and any User Guides, or successors of the components of the
NASD Rules, as they may exist at the time. If any payment is due directly to
Nasdaq under this Agreement, payment in full is due Nasdaq in immediately
available U.S. funds, within 30 days of date of invoice, whether or not use
is made of the Information. Interest shall be due from the date of the
invoice to the time that the amount(s) that are due have been paid.
Subscriber shall assume full and complete responsibility for the payment of
any taxes, charges or assessments imposed on Subscriber or Nasdaq (except for
U.S. federal, state, or local income taxes, if any, imposed on Nasdaq) by any
foreign or domestic national, state, provincial or local governmental bodies,
or subdivisions thereof, and any penalties or interest, relating to the
provision of the Information to Subscriber.
3. The Information is licensed only for the personal use of the
Non-Professional Subscriber and the internal use in the business of the
Professional Subscriber. By representing to Vendor that Subscriber is a
non-professional, or by continuing to receive the Information at a
nonprofessional subscriber rate, Subscriber is affirming to Vendor and the
Corporations that Subscriber meets the definition of Non-Professional
Subscriber as set forth in paragraph 1 above. Subscriber will promptly give
written notice to Vendor of any change in the name or place of residence or
place of business at which the Information is received. Subscriber may not
sell, lease, furnish or otherwise permit or provide access to the Information
to any other Person or to any other office, or place. Subscriber will not
engage in the operation of any illegal business; use or permit anyone else to
use the Information, or any part thereof, for any illegal purpose; or violate
any NASD Rule. Professional Subscribers may, on a non-continuous basis,
furnish limited amounts of the Information to customers: in written
advertisements, correspondence, or other literature; or during voice
telephonic conversations not entailing computerized voice, automated
information inquiry systems, or similar technologies. Subscriber may not
present the Information rendered in any unfair, misleading, or
* Whenever an asterisk follows the first use of a term, Paragraph I defines the
term.
discriminatory format. Subscriber shall take reasonable security precautions
to prevent unauthorized Persons from gaining access to the Information.
4. Subscriber acknowledges that Nasdaq, in its sole discretion, may from
time to time make modifications to its system or the Information. Such
modifications may require corresponding changes to be made in Vendor's
Service. Changes or the failure to make timely changes by Vendor or
Subscriber may sever or affect Subscriber's access to or use of the
Information. Nasdaq shall not be responsible for such effects.
5. Nasdaq grants to Subscriber a nonexclusive, non-transferable license
during the term of the Agreement to receive and use the Information
transmitted to it by Vendor and thereafter to use such Information for any
purpose not inconsistent with the terms of the Agreement or with the NASD
Rules. Subscriber acknowledges and agrees that the Corporations have
proprietary rights in the Information that originates on or derives from
markets regulated or operated by the Corporations and compilation or other
rights in Information gathered from other sources. Subscriber further
acknowledges and agrees that the Corporations' third party Information
providers have exclusive proprietary rights in their respective Information.
In the event of any misappropriation or misuse, Nasdaq or its third party
information providers shall have the right to obtain injunctive relief for
its respective materials. Subscriber will attribute source as appropriate
under all the circumstances.
6. Subscriber acknowledges that Nasdaq, as a subsidiary of NASD, when
required to do so by NASD in fulfillment of NASD's statutory obligations, may
by notice to Vendor unilaterally limit or terminate the right of any or all
Persons to receive or use the Information, and that Vendor will immediately
comply with any such notice and will terminate or limit the furnishing of the
Information and confirm such compliance by notice to Nasdaq. Any affected
Person will have available to it such procedural protections as are provided
by the Exchange Act and applicable rules thereunder. Neither Nasdaq nor NASD
shall have any liability when complying with such NASD notice.
7. Subscriber will maintain such accurate and verifiable records regarding
the use of the Information and including the number and location of all
devices that receive the Information, as may be required, and will make these
records available for a period of 3 years in a form acceptable to Nasdaq for
inspection by Nasdaq's auditors upon reasonable notice. Subscriber shall make
its premises available to Nasdaq for review of said records and for physical
inspection of Vendor's Service and of Subscriber's use of the Information,
all at reasonable times, upon reasonable notice, to ensure compliance with
this Agreement.
8. To the extent permitted by applicable law, Subscriber acknowledges and
agrees that the termination of the Vendor's Service for failure to make
payments shall not be deemed or considered to be, and Subscriber waives any
right to represent or assert that any such exercise constitutes, an act or
omission or an improper denial or limitation of access by Nasdaq to any
service or facility operated by Nasdaq as contemplated in Section 11A of the
Exchange Act, or any other provision of the Exchange Act, or any rule,
regulation, or interpretation adopted thereunder.
9. NASDAQS WARRANTIES/DISCLAIMER OF WARRANTIES. NASDAQ SHALL ENDEAVOR TO
OFFER THE INFORMATION AS PROMPTLY AND ACCURATELY AS IS REASONABLY
PRACTICABLE. IN THE EVENT THAT THE INFORMATION IS NOT AVAILABLE AS A RESULT
OF A FAILURE BY NASDAQ TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT,
NASDAQ WILL ENDEAVOR, GIVING DUE REGARD FOR THE COST, TIME, AND EFFECT ON
OTHER USERS, TO CORRECT ANY SUCH FAILURE. IN THE EVENT THAT THE INFORMATION
IS NOT AVAILABLE, IS DELAYED, IS INTERRUPTED, IS INCOMPLETE, OR IS NOT
ACCURATE OR IS OTHERWISE MATERIALLY AFFECTED FOR A CONTINUOUS PERIOD OF FOUR
(4) HOURS OR MORE DURING THE TIME THAT NASDAQ REGULARLY TRANSMITS THE
INFORMATION DUE TO THE FAULT OF NASDAQ (EXCEPT FOR A REASON PERMITTED IN THIS
AGREEMENT OR IN NASDAQ'S AGREEMENT WITH THE VENDOR), SUBSCRIBER'S OR ANY
OTHER PERSON'S EXCLUSIVE REMEDY AGAINST NASDAQ SHALL BE (A) IF SUBSCRIBER
OR.ANY 'OTHER PERSON CONTINUES TO RECEIVE THE INFORMATION OR ANY OTHER DATA
AND/OR INFORMATION OFFERED BY NASDAQ, A PRORATED MONTH'S CREDIT OF ANY MONIES
DUE, IF ANY, FOR THE AFFECTED INFORMATION DIRECTLY TO NASDAQ FROM SUBSCRIBER,
OR, IF APPLICABLE, FROM SAID OTHER PERSON, FOR THE PERIOD AT ISSUE OR, (B) IF
SUBSCRIBER OR ANY OTHER PERSON NO LONGER RECEIVES EITHER THE INFORMATION OR
ANY OTHER DATA AND/OR INFORMATION OFFERED BY NASDAQ,
* Whenever an asterisk follows the first use of a term, Paragraph I defines the
term.
A PRORATED MONTH'S REFUND OF ANY MONIES DUE FOR THE AFFECTED INFORMATION
DIRECTLY TO NASDAQ FROM SUBSCRIBER, OR, IF APPLICABLE, FROM SAID OTHER
PERSON, FOR THE PERIOD AT ISSUE. SUCH CREDIT OR REFUND SHALL, IF APPLICABLE,
BE REQUESTED BY WRITTEN NOTICE TO NASDAQ WITH ALL PERTINENT DETAILS. BEYOND
THE WARRANTIES STATED IN THIS SECTION, THERE ARE NO OTHER WARRANTIES OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY (INCLUDING, WITHOUT LIMITATION,
TIMELINESS, TRUTHFULNESS, SEQUENCE, COMPLETENESS, ACCURACY, FREEDOM FROM
INTERRUPTION), ANY IMPLIED WARRANTIES ARISING FROM TRADE USAGE, COURSE OF
DEALING, OR COURSE OF PERFORMANCE, OR THE IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE.
10. CORPORATIONS' LIMITATION OF LIABILITY. (A) EXCEPT AS MAY OTHERWISE BE SET
FORTH HEREIN, THE CORPORATIONS SHALL NOT BE LIABLE TO SUBSCRIBER, ITS VENDOR
OR ANY OTHER PERSON FOR INDIRECT, SPECIAL, PUNITIVE, CONSEQUENTIAL, OR
INCIDENTAL LOSS OR DAMAGE (INCLUDING, BUT NOT LIMITED TO, TRADING LOSSES,
LOSS OF ANTICIPATED PROFITS, LOSS BY REASON OF SHUTDOWN IN OPERATION OR
INCREASED EXPENSES OF OPERATION, COST OF COVER, OR OTHER INDIRECT LOSS OR
DAMAGE) OF ANY NATURE ARISING FROM ANY CAUSE WHATSOEVER, EVEN IF THE
CORPORATIONS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
(B) THE CORPORATIONS SHALL NOT BE LIABLE TO SUBSCRIBER OR ANY OTHER
PERSON FOR ANY UNAVAILABILITY, INTERRUPTION, DELAY, INCOMPLETENESS, OR
INACCURACY OF THE INFORMATION THAT LASTS LESS THAN FOUR (4) CONTINUOUS HOURS
DURING THE TIME THAT NASDAQ REGULARLY TRANSMITS THE INFORMATION OR IF THE
INFORMATION IS MATERIALLY AFFECTED FOR LESS THAN FOUR (4) CONTINUOUS HOURS
DURING THE TIME THAT NASDAQ REGULARLY TRANSMITS THE INFORMATION.
(C) IF ANY OR ALL OF THE CORPORATIONS ARE FOR ANY REASON HELD LIABLE TO
SUBSCRIBER OR TO ANY OTHER PERSON, WHETHER IN TORT OR IN CONTRACT, THE
LIABILITY OF ALL OR ANY OF THE CORPORATIONS WITHIN A SINGLE YEAR (FROM THE
EFFECTIVE DATE OF THE AGREEMENT) OF THE AGREEMENT, COMBINED WITH THE TOTAL OF
ALL CLAIMS OR LOSSES OF SUBSCRIBER'S VENDOR, AND ANY OTHER PERSON CLAIMING
THROUGH, ON BEHALF OF, OR AS HARMED BY SUBSCRIBER, IS LIMITED TO THE GREATER
OF: (I) IF SUBSCRIBER OR ANY OTHER PERSON CONTINUES TO RECEIVE THE
INFORMATION OR ANY OTHER DATA AND/OR INFORMATION OFFERED BY NASDAQ, A
PRORATED MONTH'S CREDIT OF ANY MONIES DUE DIRECTLY TO NASDAQ FROM SUBSCRIBER,
OR, IF APPLICABLE, FROM ANY OTHER PERSON, FOR THE PERIOD AT ISSUE OR, IF
SUBSCRIBER OR ANY OTHER PERSON NO LONGER RECEIVES EITHER THE INFORMATION OR
ANY OTHER DATA AND/OR INFORMATION OFFERED BY NASDAQ, A REFUND OF ANY MONIES
DUE DIRECTLY TO NASDAQ FROM SUBSCRIBER, OR, IF APPLICABLE, FROM ANY OTHER
PERSON, FOR THE PERIOD AT ISSUE; OR (H) $500.00.
(D) THIS SECTION SHALL NOT RELIEVE ANY OR ALL OF THE CORPORATIONS,
SUBSCRIBER OR ANY OTHER PERSON FROM LIABILITY FOR DAMAGES THAT RESULT FROM
THEIR OWN GROSS NEGLIGENCE OR WILLFUL TORTIOUS MISCONDUCT, OR FROM PERSONAL
INJURY OR WRONGFUL DEATH CLAIMS.
(E) SUBSCRIBER AND THE CORPORATIONS UNDERSTAND AND AGREE THAT THE TERMS
OF THIS SECTION REFLECT A REASONABLE ALLOCATION OF RISK AND LIMITATION OF
LIABILITY.
11. THIRD PARTY INFORMATION PROVIDERS' DISCLAIMERS OF WARRANTIES/LIMITATIONS
OF LIABILITIES. NASDAQ'S THIRD PARTY INFORMATION PROVIDERS MAKE NO WARRANTIES
OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY (INCLUDING, WITHOUT LIMITATION,
TIMELINESS, TRUTHFULNESS, SEQUENCE, COMPLETENESS, ACCURACY, FREEDOM FROM
INTERRUPTION), ANY IMPLIED WARRANTIES ARISING FROM TRADE USAGE, COURSE OF
DEALING, OR COURSE OF PERFORMANCE, OR THE IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE AND THEY SHALL
HAVE NO LIABILITY FOR THE ACCURACY OF, OR FOR DELAYS OR OMISSIONS IN, ANY OF
THE INFORMATION PROVIDED BY THEM. NASDAQ'S THIRD PARTY INFORMATION PROVIDERS
SHALL ALSO HAVE NO LIABILITY FOR ANY DAMAGES, WHETHER DIRECT OR INDIRECT,
WHETHER
* Whenever an asterisk follows the first use of a term, Paragraph I defines the
term.
LOST PROFITS, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OF THE SUBSCRIBER OR
ANY OTHER PERSON SEEKING RELIEF THROUGH SUBSCRIBER, EVEN IF THE THIRD PARTY
INFORMATION PROVIDERS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
IN NO EVENT WILL THE LIABILITY OF THE THIRD PARTY INFORMATION PROVIDERS OR
THEIR AFFILIATES TO SUBSCRIBER OR ANY OTHER PERSON SEEKING RELIEF THROUGH
SUBSCRIBER PURSUANT TO ANY CAUSE OF ACTION, WHETHER IN CONTRACT, TORT, OR
OTHERWISE, EXCEED THE FEE PAID BY SUBSCRIBER OR ANY OTHER PERSON SEEKING
RELIEF THROUGH SUBSCRIBER, AS APPLICABLE.
12. Notwithstanding any other term or condition of this Agreement, Nasdaq,
its third party information providers or Subscriber shall not be obligated to
perform or observe their respective obligations undertaken in this Agreement
(except for obligations to make payments hereunder and regulatory
obligations) if prevented or hindered from doing so by any circumstances
found to be beyond their control.
13. Subscriber will indemnify and hold harmless the Corporations and their
employees, officers, directors, and other agents from any and all Claims or
Losses imposed on, incurred by or asserted as a result of or relating to: (a)
any noncompliance by Subscriber with the terms and conditions hereof; (b) any
third-party actions related to Subscriber's receipt and use of the
Information, whether authorized or unauthorized under the Agreement.
14. Each party warrants and represents and will indemnify and hold harmless
(and in every case, Nasdaq shall be permitted to solely defend and settle)
another party (including the Corporations) and their officers, directors,
employees, and other agents, against any Claims or Losses arising from,
involving, or relating to a claim of infringement or other violation of an
intellectual property right by the indemnifying party, its actions or
omissions, equipment, or other property. This right is conditioned on the
indemnified party giving prompt written notice to the indemnifying party (as
does not prejudice the defense) of the Claims or Losses and providing
cooperation in the defense of the Claims or Losses (without waiver of
attorney-client, work-product or other legal privilege, or disclosure of
information legally required to be kept confidential).
15. Subscriber agrees that Nasdaq may enforce the terms of this Agreement
against any Person, whether or not Vendor or Subscriber is a party to any
such action or against Subscriber itself. - In any action there shall be
available injunctive relief or damages, with the prevailing party being
awarded costs and attorneys' fees (including in-house counsel).
16. In the event of any conflict between the terms of this Agreement and of
the Vendor's agreement, the terms of this Agreement shall prevail as between
the Corporations and Subscriber.
17. In addition to terminations permitted under the Vendor's agreement, this
Agreement may be terminated by Subscriber on 30 days written notice to Vendor
and by the Corporations on 30 days written notice either to Vendor or
Subscriber. Nasdaq may also alter any term of this Agreement on 60 days
written notice either to Vendor or Subscriber, and any use after such date is
deemed acceptance of the new terms. In the event of Subscriber breach,
discovery of the untruth of any representation of Subscriber, or where
directed by NASD in its regulatory authority, Nasdaq may terminate this
Agreement on not less than three (3) days written notice to Subscriber
provided either by Nasdaq or Vendor.
18. Nasdaq does not endorse or approve any equipment, Vendor, or Vendor's
Service.
19. Natural persons executing this Agreement warrant and represent that they
are at least eighteen (18) years of age. Subscriber and the Person executing
this Agreement on behalf of Subscriber which is a proprietorship,
corporation, partnership or other entity, represent that such Person is duly
authorized by all necessary and appropriate corporate or other action to
execute the Agreement on behalf of Subscriber.
20. All notices, invoices, and other communications required to be given in
writing under this Agreement shall be directed to: Trading & Market Services,
The Nasdaq Stock Market, Inc., 0000 X Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000,
Attn.: Manager, Trading and Market Services, or to Subscriber at the last
address known to the Vendor, and shall be deemed to have been duly given upon
actual receipt by the parties, or upon constructive receipt if sent by
certified mail, postage pre-paid, return receipt requested, at such
* Whenever an asterisk follows the first use of a term, Paragraph I defines the
term.
address or to such other address as any party hereto shall hereafter specify
by written notice to the other party or parties hereto.
21. Except as otherwise provided herein, no provision of this Agreement may
be amended, modified, or waived, unless by an instrument in writing executed
by a duly authorized signatory of the party against whom enforcement of such
amendment, modification, or waiver is sought. No failure on the part of
Nasdaq or Subscriber to exercise, no delay in exercising, and no course of
dealing with respect to any right, power, or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise
of any such right, power, or privilege preclude any other or further exercise
thereof or the exercise of any other right, power, or privilege under this
Agreement. If any of the provisions of this Agreement, or application thereof
to any Person or circumstance, shall to any extent be held invalid or
unenforceable, the remainder of this Agreement, or the application of such
terms or provisions to Persons or circumstances other than those as to which
they are held invalid or unenforceable, shall not be affected thereby and
each such term and provision of this Agreement shall be valid and enforceable
to the fullest extent permitted by law.
22. The terms of this Agreement apply to those obligations that survive any
cancellation, termination, or rescission, namely, obligations relating to
intellectual property, indemnification, limitation of liability, warranties,
disclaimer of warranties, and Exchange Act related provisions.
23. This Agreement shall be deemed to have been made in the United States in
the District of Columbia and shall be construed and enforced in accordance
with, and the validity and performance hereof shall be governed by, the laws
of the District of Columbia, without reference to principles of conflicts of
laws thereof. Subscriber hereby consents to submit to the jurisdiction of the
courts of or for the District of Columbia in connection with any action or
proceeding instituted relating to this Agreement.
[FOR STAND-ALONE AGREEMENT, PLEASE INCLUDE SIGNATURE BLOCK.]
/ / Check here if you qualify as a non-professional as defined in paragraph 1.
SUBSCRIBER: Xxxxxx, Xxxx & Xxxxxxxx, Inc. VENDOR:
BY: Xxxxx X. Xxxx BY:
TITLE: COO TITLE:
DATE: 5-21-99 DATE:
* Whenever an asterisk follows the first use of a term, Paragraph I defines the
term.
