Commission Sharing Agreement - Instinet Corp. and Bridge Trading Co.
COMMISSION SHARING AGREEMENT
This Commission Sharing Agreement (the "Agreement"), dated as of April
23, 2002, is by and between Instinet Corporation ("Instinet"), a registered
broker-dealer and a member of the National Association of Securities Dealers,
Inc. and Bridge Trading Company ("Bridge"), a registered broker-dealer and a
member of the New York Stock Exchange (each a "Party", and together the
"Parties").
WHEREAS Bridge has selected Instinet as a firm that it will introduce
to certain of its institutional clients (each a "Client", and together the
"Clients") as a means of providing Clients with a facility for execution of
transactions in foreign-denominated securities ("Foreign Securities
Transactions"); and
WHEREAS Bridge and Instinet have agreed that, as compensation for such
introductions, Instinet shall pay Bridge a portion of the commissions it
receives on the Foreign Securities Transactions directly resulting from such
introductions;
NOW THEREFORE, in consideration of the mutual covenants and obligations
set forth in this Agreement, the Parties agree as follows:
1. Client Introductions. Bridge may introduce Clients to Instinet for
certain of their Foreign Securities Transactions.
2. Acceptance of Accounts by Instinet and Execution Services. Instinet
will open accounts for Clients introduced by Bridge and provide
execution services for Foreign Securities Transactions provided that:
(i) such Clients comply with all of Instinet's terms and conditions
for acceptance of clients; (ii) Instinet approves such account in its
sole discretion; and (iii) such Clients enter into agreements with
Instinet governing the terms and conditions for provision of services
and equipment by Instinet (the "Services") and remain in compliance
thereof. Neither Instinet nor its owners, affiliates, officers,
directors, advisory committees, agents, employees, associated persons,
licensors or other third parties providing services on their behalf
will be liable to Bridge or any other person for any damage, cost or
expense of any nature or from any cause whatsoever, whether direct,
special, incidental or consequential, arising out of, or related to:
(i) any Client's use of the Services; (ii) Instinet's refusal to
accept, display, execute, clear and/or settle any order entered or
executed or attempted to be entered or executed by any Client; or
(iii) the installation, furnishing, performance, maintenance, use of
or inability to use the Services, authorized equipment or any computer
software, cabling, network services, databases, manuals or any other
materials or Services furnished by or on behalf of Instinet.
Instinet makes no warranty, express or implied, including, without
limitation, any implied conditions or warranties or merchantability or
fitness for a particular use or purpose, any implied warranty arising
from trade usage, course of dealing or course of performance, and of
any other warranty or obligation with respect to the Services or any
software or other equipment made available to any Client and all such
other warranties are hereby disclaimed.
3. Commission Sharing. Effective as of the date hereof, Instinet shall
remit to Bridge the Rebates (as hereinafter defined) in relation to
Foreign Securities Transactions executed on or after
, 2002 where a Client (A) has identified to
Instinet on trade date, via telephone, e-mail, the Instinet Messaging
log, or any other means of order entry as the Client and Instinet
agree, the specific Foreign Securities Transactions as `Bridge Trades'
either at the time such Client: (i) places the order, (ii) receives the
execution or (iii) gives the account breakdown and (B) effects the
execution thereof with or through Instinet.
The amount of commissions received by Instinet to be rebated to Bridge
in respect of such directed orders (the "Rebates") shall be computed as
agreed in Exhibit 1.
Nothing herein shall restrict any transaction by or between Instinet
and Client that is not identified by the Client as being transmitted
pursuant to this Agreement, nor shall Instinet be obligated to pay
Rebates for transactions in securities received from Clients other than
Foreign Securities Transactions identified by Clients as "Bridge
Trades".
4. Payments of Rebates. Rebates payments, if any, shall be made by
Instinet to Bridge in United States Dollars (or other agreed currency)
on or before the 15th day of the calendar month next following the
month in which the Foreign Securities Transactions were executed.
5. Compliance with Securities Laws and Regulations. Except as specifically
set forth in Section 6 of this Agreement, each Party shall be
responsible for compliance with all applicable federal, state and local
(in foreign jurisdictions) securities laws and regulations, including
all applicable rules of self regulatory organizations (together
"Securities Regulations"). To the extent that either Party fails to
comply with Securities Regulations, it shall indemnify the other Party
from any damages resulting from the violation.
6. Soft Dollar Arrangements. Bridge shall be solely responsible for
compliance with all applicable federal, state and local laws, rules,
and regulations, as well as the rules, regulations, constitutions,
by-laws, stated policies and interpretations of each self-regulatory
organization having jurisdiction over Bridge (the "Applicable
Regulations") relating to or concerning any arrangement or
understanding Bridge may have with any manager, adviser, or agent
exercising any authority (including, without limitation, investment
discretion) over a Client account to use commissions to obtain
research or other services (collectively, a "Soft Dollar Arrangement")
and for obtaining all appropriate authorities and agreements related
to any Soft Dollar Arrangement. Bridge also shall be solely
responsible for compliance with Applicable Regulations related to or
concerning any arrangement or understanding that Bridge may have with
any Client or account of a Client to rebate any funds, including,
without limitation, any portion of any commission, mark-up, mark-down,
fee, interest or other charge, or to pay the cost of any service or
product for a Client or account of a Client (collectively, a "Directed
Arrangement") and for obtaining all appropriate authorities and
agreements related to a Directed Arrangement.
7. Statements. Instinet shall provide Bridge with statements giving
details of the Rebates pursuant to this Agreement on a monthly basis.
If requested by Bridge, Instinet will review such statements with
Bridge in order to reconcile any errors.
Instinet reserves the right to disclose all Rebates to the relevant
Client, including but not limited to, the calculation method and the
payment method.
8. Confidentiality; No Advertisement. Each of Bridge and Instinet agree
to keep confidential any information it may acquire as a result of
this Agreement regarding the business and affairs of the other,
including, without limitation, the identity of each other's clients.
Neither Party shall, without the prior written consent of the other
Party, place any advertisement in any media whatsoever or, except as
provided herein, make any written communication addressed to any
client, potential client or other third party if such advertisement or
communication in any manner makes reference to the other Party. The
foregoing shall not apply to standard Bridge materials provided to its
clients listing the firms available on Bridge's brokerage network.
9. Termination; Survival. This Agreement may be terminated by either Party
for any reason and at any time, by written notice given to the other
Party. Any such termination shall have no effect on the rights and
obligations of the Parties in respect of Foreign Securities
Transactions executed by Clients prior to such termination. In the
event of any termination of this Agreement, Instinet may, in its sole
discretion, continue to provide Services to Clients with no further
obligation to Bridge. Sections 2, 8 and 10 shall survive any
termination of this Agreement.
10. General
a. Entire Agreement; Waiver; No Assignment. This Agreement constitutes
the complete and exclusive statement of the agreement between the
Parties as relates to the subject matter hereof and supersedes all
proposals, oral or written, and all other representations, statements,
negotiations and undertakings relating to the subject matter. No change
in, addition to, or waiver of any of the provisions of this Agreement
shall be binding upon either Party unless in writing signed by an
authorized representative of such Party. No waiver by either Party of
any breach by the other Party of any of the provisions of this
Agreement shall be construed as a waiver of any other provision or that
provision on any other occasion. Neither Party may assign this
Agreement and/or any of its rights and/or obligations hereunder without
the prior written consent of the other Party and any such attempted
assignment shall be void.
b. Notices. Any notice required or permitted to be given under this
Agreement shall be given in writing and shall be deemed to have been
delivered and given (a) when delivered personally; (b) three (3)
business days after having been sent by registered or certified U.S.
mail, return receipt requested, postage and charges prepaid; or (c) one
(1) business day after deposit with a commercial overnight courier,
with written verification of receipt. All communications will be sent
to the following addresses or to such other address as may be
designated by a Party by giving written notice to the other Party
pursuant to this Section 10.
To Instinet: Instinet Corporation
3 Times Square
New York, New York 10036
Attn : Nigel Lucas
Telephone: 212-310-9500
To Bridge: Bridge Trading Company
717 Office Parkway
St. Louis, Missouri 63141
Attn: Richard Paulson
Telephone: 314-468-8249
c. Severability. In the event any one or more of the provisions of
this Agreement shall be held by a court of competent jurisdiction to
be invalid, illegal or unenforceable, the remaining provisions of this
Agreement shall remain in effect and this Agreement shall be read as
though the offending provision had not been written.
d. Headings. The captions and headings used in this Agreement are
inserted for the convenient reference of the Parties and in no way
define, limit or describe the scope or intent of this Agreement or any
part hereof.
e. Injunctive Relief. Each Party hereby acknowledges and agrees that
damages at law may be inadequate remedies for the breach of Section 8.
Accordingly, each Party agrees that the other Party may be entitled to
temporary and permanent injunctive or other equitable relief with
respect to any such breach. The rights set forth in this Section 10e
shall be in addition to any other rights that either Party Instinet
may have at law or in equity.
f. No Agency Relationship. Neither Party shall hold itself out as an
agent of the other. Neither this Agreement, nor any activity
thereunder, shall create a general or limited partnership,
association, joint venture, branch, or agency relationship between
Bridge and Instinet.
g. Exclusivity. This Agreement is non-exclusive and accordingly either
Instinet or Bridge may contract with other brokers to effect
transactions for the Clients.
h. Counterparts. This Agreement may be signed in counterparts, each of
which shall be deemed effective as if each Party had signed each of
such counterparts.
i. Governing Law. This Agreement shall be subject to and governed by
the laws of New York.
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IN WITNESS WHEREOF, each Party has caused the original or a counterpart
of the original of this Agreement to be executed as of the date first written
above by its duly authorized representative.
INSTINET CORPORATION
By:
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Name:
Title:
BRIDGE TRADING COMPANY
By:
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Name:
Title: