EXHIBIT 10.46
FULLY DISCLOSED CLEARING AGREEMENT
AMENDMENT
This amendment modifies and changes certain provisions of the Fully Disclosed
Clearing Agreement dated October 3, 1996, as amended prior to the date hereof
("Agreement") between ▇.▇. ▇▇▇▇▇▇, Inc., a New York corporation
("Correspondent"), and ▇▇▇▇▇▇ Financial Services, Inc., a North Carolina
corporation ("▇▇▇▇▇▇").
The modifications are as follows:
1. Notwithstanding anything to the contrary in Section 8(a)(ii), ▇▇▇▇▇▇
shall only be permitted to insert higher prices into any revised Schedule A to
the extent that its out-of-pocket cost for providing the applicable services set
forth therein has increased (it being understood and agreed that (a) such costs
must arise from or in connection with actions taken by, or mandated by,
unaffiliated third parties and (b) any such revision shall be made in accordance
with the procedures set forth in Section 8(a)(ii)).
2. Section 12(a) is hereby deleted in its entirety and modified in lieu
thereof to read:
"This Agreement shall remain in force until July 31, 2007. Subsequent to this
initial term, either party may terminate this Agreement by giving thirty (30)
days written notice to the other party. During the term of this Agreement,
Correspondent agrees to clear all of its cash, margin, option and similar
accounts through ▇▇▇▇▇▇ and shall not use any other broker-dealer in connection
with any account clearing activity except Correspondent may (a) continue to use
Bank of New York as its clearing broker for institutional trading (i) during the
existing current term of the clearing agreement with Bank of New York (without
giving effect to automatic or requested extensions of such term) and (ii) after
the period in clause (i), solely to the extent ▇▇▇▇▇▇ either does not offer
comparable or better pricing and service for institutional trading of the type
to be conducted by Correspondent, and (b) utilize other clearing broker for
trades that are executed outside of the United States of America that are not
facilitated by the Licensed Software (as defined in the Software License
Agreement dated the date hereof among Correspondent, ▇.▇. ▇▇▇▇▇▇ Group, Inc. and
Integrated Trading Solutions, Inc."
3. Section 12(b) is amended by inserting "(a)" before clause "(i)" and by
adding the following clause (b):
"(b) Notwithstanding Section 12(a), ▇▇▇▇▇▇ may terminate this Agreement at
any time by giving written notice to Correspondent in the event that:
(i) a party (other than Integrated Trading Solutions, Inc. ("Integrated"))
fails to perform any of its obligations under the License Agreement
dated as of July 31, 2002 among Integrated, Correspondent and ▇.▇.
▇▇▇▇▇▇ Group Inc.("ABW"), in any material respect after the expiry of
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any cure period directly relating to such failure set forth in such
License Agreement;
(ii) a material breach (as determined in accordance with Section 9.3 of the
Asset Purchase Agreement dated as of July 31, 2002 ("Asset Purchase
Agreement") among Correspondent, ABW and Integrated) by a party (other
than Integrated and its affiliates, as applicable) or its affiliate(s)
under the Asset Purchase Agreement, under any agreement or instrument
contemplated by the Asset Purchase Agreement, or under any of the
Related Documents (as defined in the Asset Purchase Agreement), in
each case after the expiry of any cure period directly relating to
such breach set forth in the Asset Purchase Agreement, the applicable
agreement or instrument or the applicable Related Document;
(iii) any breach of a payment obligation with respect to any debt owed by
Correspondent or its affiliates in favor of ▇▇▇▇▇▇ or its affiliates
under the terms of the Related Documents (or under any future
agreement or instrument between any of Correspondent and/or any of its
affiliates and ▇▇▇▇▇▇, in each case after the expiry of any cure
period directly relating to such breach set forth in the applicable
Related Document, agreement or instrument);
(iv) Correspondent fails to treat as confidential information subject to
the provisions of Section 13 of the Agreement the prices set forth in
Schedule A; provided that Correspondent may provide such information
to prospective investors and lenders who execute a confidentiality
agreement in form and substance satisfactory to ▇▇▇▇▇▇ and who are not
current or prospective customers or competitors of ▇▇▇▇▇▇ as well as,
when required by applicable law, regulation, directive or order, to
governmental entities and the NASD, SEC and applicable securities
exchanges or other regulatory bodies that have supervisory
jurisdiction with respect to Correspondent.
In addition, any breach by Correspondent, ABW or their affiliates of a Related
Document that results in a termination by the non-breaching party of such
Related Document shall give rise to an immediate right to terminate the
Agreement (without any requirement for any additional grace or cure period as
set forth hereinabove in the first paragraph of this clause (b); provided,
further, that no notice or other action shall be required by ▇▇▇▇▇▇ to effect
such termination in the event the termination of a Related Document resulted
from a bankruptcy, insolvency, liquidation or similar proceeding affecting
Correspondent, ABW or their affiliates as such event of termination under a
Related Document may be deemed by ▇▇▇▇▇▇ to constitute an automatic event of
termination hereunder).
4. Paragraph 19(d) of the Agreement is amended by adding the following text
at the end of the current text:
"For purposes of this Section, any change in "control" of Correspondent or
any guarantor shall also constitute an assignment. "Control" means the
direct or indirect power to direct or cause direction of the management and
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policies of an entity, whether through the exercise of voting power, by
contract or otherwise, as determined by ▇▇▇▇▇▇ in its sole discretion,
provided, however, and provided further that a transaction shall not
constitute a change in control if (i) Correspondent shall have notified
▇▇▇▇▇▇ in writing (sent by telecopy marked conspicuously on the cover sheet
with "Urgent-Immediate Reply Needed" to each of ▇▇▇▇▇▇`s CEO, COO, CFO,
General Counsel and Chief Compliance Officer and ▇▇▇▇▇▇ ▇▇▇▇▇▇
(208-275-3940) in reasonable detail of the general terms of a proposed
transaction and identity of the applicable investor(s) and/or acquirer, and
▇▇▇▇▇▇ either confirms that such transaction does not constitute a change
in control or does not notify Correspondent within six business days after
the day on which it receives the notice from Correspondent that Penson
deems the transaction to be a change in control and the Correspondent or a
guarantor complete a transaction on terms no less favorable to them than
those provided in the notice or (ii) it involves the issuance by the
Correspondent or a guarantor of common stock or other equivalent equity
securities (A) in connection with the conversion of existing indebtedness
on the date hereof of the Correspondent or a guarantor or (B) upon the
conversion or exercise of warrants, preferred stock or other securities
existing on the date hereof or issued pursuant to clause (A) above into
common stock of the Correspondent or a guarantor.. Any attempted
assignment, transfer, sale, or other delegation in violation of this
Section shall be void and any change of control described herein may be
deemed by ▇▇▇▇▇▇ to be an immediate event of termination without
application of any cure or grace period."
5. Paragraph 19(m) is modified by deleting the addresses for ▇▇▇▇▇▇ and
Correspondent and inserting in lieu thereof the addresses set forth in the
signature blocks below for ▇▇▇▇▇▇ and Correspondent, respectively.
6. The parties confirm the deletion of Section 12(g) inserted pursuant to
the Amendment dated June 8, 1998.
7. Schedule A to the Agreement is deleted in its entirety and the form of
Schedule A attached hereto is inserted in lieu thereof.
All the remaining provisions of the Agreement between Correspondent and
▇▇▇▇▇▇ remain unchanged and in full force and effect.
Agreed and Accepted
Date: July __, 2002
By:_________________________________
▇▇▇▇▇▇ ▇. Son
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President
▇▇▇▇▇▇ Financial Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By:_________________________________
▇▇▇▇▇▇ ▇▇▇▇▇
President
▇.▇. ▇▇▇▇▇▇, Inc.
▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ratified and confirmed by ▇.▇.
▇▇▇▇▇▇ Group Inc. as Guarantor of
payment and performance of all
obligations of Correspondent as of
the date hereof and with respect to
all amendments prior to and after
the date hereof:
By:________________________________
▇▇▇▇▇▇ ▇▇▇▇▇
President
▇.▇. ▇▇▇▇▇▇ Group, Inc.
▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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