Remote Processing Agreement - Sungard Financial Systems Inc. and Penson Financial Services Inc.
REMOTE PROCESSING AGREEMENT
BETWEEN
SUNGARD FINANCIAL SYSTEMS, INC.
A DELAWARE CORPORATION
("SUNGARD")
AND
PENSON FINANCIAL SERVICES, INC.
A NORTH CAROLINA CORPORATION
("CUSTOMER")
DATED
7-10 , 1995
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("EFFECTIVE DATE")
By the signatures of their duly authorized representatives below, SunGard and
Customer, intending to be legally bound, agree to all of the provisions of this
Agreement and all Schedules and Addenda to this Agreement.
SUNGARD FINANCIAL SYSTEMS, INC. PENSON FINANCIAL SERVICES, INC.
By: /s/ David H. Taylor By: /s/ Daniel P. Son
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Print Name: DAVID H. TAYLOR Print Name: Daniel P. Son
---------------------------- ---------------------
Print Title: PRESIDENT Print Title: President
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Dated Signed: 7-13-95 Dated Signed: 7-10-95
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1. SERVICES
1.1 PROVISION OF SERVICES. SunGard shall provide to Customer, and Customer
shall accept, the on-line processing, report services and related
services described on Schedule A to this Agreement ("System Services")
available through use of SunGard's proprietary applications software
system identified on Schedule A to this Agreement ("System") and the
related documentation listed on Schedule A ("Documentation"), as the
System Services, System and Documentation may be modified, revised and
updated in accordance with this Agreement.
1.2 ON-LINE PROCESSING SERVICES. SunGard shall provide to Customer the
on-line processing services described on Schedule A. The System will
be available to Customer twenty-four hours a day except during System
maintenance. Customer will have on-line access to the System during
every day that any of the United States securities markets are open
("Business Day"). On each Business Day, SunGard will perform a daily
batch cycle which will begin at 8:00 p.m. Eastern Time and takes
approximately twelve (12) hours for normal data processing, unless
additional processing is required by Customer ("Batch Cycle"). During
the Batch Cycle access by Customer to the System is limited to the
inquiry functions and order entry of trades for next Business Day
processing. If Customer requests a delay in the commencement of the
Batch Cycle or if any clearing entities are not available to be
accessed by the System, Batch Processing may be delayed and the System
may not be available for next Business Day processing for
approximately twelve (12) hours after the commencement of the Batch
Cycle. The Designated Location will be staffed at SunGard's usual
levels twenty-four (24) hours a day seven (7) days a week.
1.3 REPORT SERVICES. SunGard shall provide to Customer the report services
described on Schedule A, subject to any advance notification
procedures stated on Schedule A. SunGard shall transmit all reports to
Customer in the manner described in the Documentation.
1.4 CUSTOMER DATA. Customer shall supply to SunGard all of the data to be
processed under this Agreement as described on Schedule A and in the
Documentation. Customer shall transmit the data to SunGard by
communications link or in another manner described on Schedule A.
Customer shall use its best efforts to insure that any information or
data which it introduces into the System is accurate and complete.
Customer shall maintain copies of all source data and current backup
copies of all data supplied to SunGard, and SunGard shall have no
liability for any loss or damage caused by Customer's failure to
maintain copies.
1.5 LIMITED USE. Customer may use the System Services and Documentation
only in the ordinary course of its business operations and for its own
business purposes, including the processing of trades of Customer's
correspondent brokers in its ordinary course of business. Customer
shall use the System Services only in accordance with the
Documentation. Customer may use only the copies of the Documentation
that are provided by SunGard, except that Customer may copy the
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Documentation to the extent reasonably necessary for routine backup
and disaster recovery purposes.
2. INITIAL IMPLEMENTATION SUPPORT AND TRAINING
2.1 INITIAL IMPLEMENTATION. SunGard shall provide and Customer shall
accept the Initial Implementation Support described on Schedule C.
This shall include delivery to Customer of the Initial Copies of the
Documentation stated on Schedule C and assistance with any other
implementation or related activities described on Schedule C. Subject
to the availability of SunGard's personnel, SunGard shall provide to
Customer additional implementation support services reasonably
requested by Customer. After delivery, Customer shall bear all risk of
loss or damage to all copies of the Documentation delivered by SunGard
to Customer. SunGard shall provide to Customer replacement or
additional copies of the Documentation reasonably requested by
Customer.
2.2 TRAINING. SunGard shall provide and Customer shall accept the Minimum
Training described on Schedule C. This shall include basic training in
the use of the System Services for a reasonable number of Customer's
employees. Subject to the availability of SunGard's personnel, SunGard
shall provide to Customer additional training services reasonably
requested by Customer. SunGard shall provide training at Customer's
location(s) whenever SunGard and Customer agree on-site training is
appropriate.
3. SUNGARD'S OTHER OBLIGATIONS
3.1 ONGOING SUPPORT SERVICES. SunGard shall provide the following ongoing
support services to Customer:
(a) TELEPHONE SUPPORT. SunGard shall provide to Customer, during
SunGard's normal business hours, Monday through Friday from 7:30
a.m. Eastern Time to 7:30 p.m. Eastern Time (except that Customer
and SunGard may agree in advance to provide support services on
U.S. holidays), telephone consultative support through SunGard's
Customer Support Department regarding Customer's proper and
authorized use of the Software. During normal business hours,
SunGard shall provide access to at least one of the following
people: (i) the primary support person for customer account, (ii)
the project manager for customer's account or (iii) a senior
manager of SunGard. In addition, telephone consultive support
will be provided through the SunGard hotline twenty-four (24)
hours a day seven (7) days a week.
(b) ERROR CORRECTIONS. SunGard shall use commercially reasonable
efforts to correct failures of the Software to perform in
accordance with the Documentation ("Errors") as follows:
1. CLASSIFICATION OF ERRORS. An Error shall be classified in
accordance with the following terms:
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CLASS 1 ERROR. A "Class 1 Error" is any Error that renders
continued use of the Software either impossible or seriously
impractical and either interrupts production by Customer or
makes continued production substantially costly to Customer.
CLASS 2 ERROR. A "Class 2 Error' is any Error that is not a
Class 1 Error.
2. NOTIFICATION OF ERRORS. SunGard shall provide to Customer a
list of persons (in increasing positions of authority) and
telephone numbers ("Calling List") for Customer to contact
in order to report an error. When reporting any Error,
Customer shall provide the classification of the Error and
reasonably detailed documentation and explanation, together
with underlying data, to substantiate the Error and to
assist SunGard in its efforts to diagnose and correct the
Error. Customer will immediately report any Class 1 Error.
If SunGard detects a Class 1 Error, then SunGard will
immediately contact Customer.
3. RESPONSE TIME. SunGard shall use commercially reasonable
efforts to respond to Customer's initial Error reports with
off-site telephone consultation, assistance and advice
within fifteen (15) minutes for Class 1 Errors and within
one (1) hour for Class 2 Errors, but in any event, SunGard
shall respond within four working hours. If SunGard fails to
so respond, or if the designated person from the Calling
List is not available when Customer makes contact with
SunGard to report an Error, then Customer shall attempt to
contact the next more responsible person of the Calling List
until contact is made and a designated person responds to
the call.
CLASS 1 ERRORS. For any Class 1 Error, SunGard shall take
all reasonably necessary steps to supply a reasonable
work-around or correction to Customer as soon as possible.
This will include assigning qualified, dedicated staff to
work on the Error 24 hours per day, 7 days per week, at
either the SunGard site or Designated Location as necessary.
Upon detecting or being notified of a Class 1 Error, SunGard
shall immediately assemble the appropriate personnel to
analyze the problem, identify potential solutions and
determine the best plan of action. Customer shall
participate in this process when necessary and provide
SunGard with additional documentation and examples, if
possible, to assist in resolving the Error. SunGard
personnel shall be dedicated to resolving the Error until an
acceptable work-around or correction is supplied or until
Customer determines in its reasonable judgment after
consultation with SunGard that a work around or correction
cannot be produced. A SunGard representative shall keep
Customer informed of the status.
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CLASS 2 ERRORS. For any Class 2 Error, SunGard shall work
with Customer to document the Error through mutually
established standards. Class 2 Errors shall be resolved
according to mutually agreed priorities. SunGard personnel
shall be dedicated to resolving Class 2 Errors through
SunGard's normal software support procedures.
3.2 MODIFICATIONS. SunGard shall provide to Customer, and Customer shall
accept, the following modifications to System Services:
(a) SunGard shall provide modifications, revisions and updates to the
System Services which SunGard, in its sole discretion,
incorporates into the System Services without additional charge.
(b) SunGard shall use commercially reasonable efforts to develop and
implement changes to the System so that the System Services will
continue to comply with applicable rules and regulations of
regulatory authorities as they may change from time to time.
(c) At SunGard's option and subject to the availability of SunGard
personnel, SunGard shall evaluate and, if feasible and
appropriate, produce and implement Customer requests for
modifications in the System Services or the System. In SunGard's
sole discretion, it may implement requested modifications at no
charge in accordance with Section 3.1 (a) or offer them at an
additional charge in accordance with Section 3.4.
(d) SunGard shall deliver updates to the Documentation whenever
SunGard determines, in its sole discretion, that such updates are
necessary.
(e) Customer shall accept modifications, revisions and updates in the
System Services, System and Documentation, including changes in
programming languages, rules of operation and screen or report
format, as and when they are implemented by SunGard and provided
the modifications, revisions or updates do not have a material
adverse effect on the System Services. Customer acknowledges that
modifications, revisions and updates in the System Services and
the System permitted by this Agreement may result in changes in
the form, timing or other features of on-line services, reports
and other System Services provided under this Agreement.
3.3 ENHANCEMENTS. SunGard shall offer to Customer the opportunity to
purchase services available through use of refinements, improvements
and enhancements to the System which SunGard, in its sole discretion,
does not incorporate into the System without additional charge.
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3.4 CONSULTING AND OTHER SERVICES. At Customer's reasonable request and
subject to the availability of SunGard's personnel, SunGard shall
provide to Customer conversion assistance, consulting services, custom
modification programming, support services relating to custom
modifications, assistance with data transfers, assistance in the use
of the System Services security mechanisms and other specialized
support services with respect to the System Services. These services
shall be provided by SunGard at Customer location(s) if SunGard and
Customer agree that on-site services are appropriate.
3.5 BACKUP COPIES AND DISASTER RECOVERY. SunGard will make a backup copy,
in digital form, of Customer's data files then in SunGard' possession
(i) at the end of each business day and stored at an off-site location
for a period of five (5) business days and (ii) at the end of each
month and saved at an off-site location for a period of the twelve
(12) months, provided that the monthly data files for the first four
(4) months of any tax year will be saved until the fifth month of the
following tax year. SunGard will maintain an agreement for backup
processing services with an affiliated company consisting of the right
to use an installed, fully operational computer system and networking
capability subject to the availability of computer and other hardware.
The backup processing will be performed by SunGard using backup copies
which will be sent to the backup facility. Customer will be charged
for any recovery services associated with any computer hardware or
communications equipment required for Customer or its correspondent
brokers to access the System that is not located at the Designated
Location. In the case of an emergency requiring backup processing,
SunGard will promptly contact the person or persons designated in
writing by Customer to be notified in such circumstance.
3.6 SPECIAL PROCESSING. Upon the request of Customer and subject to the
limitations of the applications and hardware, SunGard will use
commercially reasonable efforts to provide special processing services
such as additional, customized reports or other enhancements that are
not included the processing services provided under this Agreement.
Such special processing services will be provided for an additional
charge agreed upon by Customer and SunGard in writing.
4. CUSTOMER'S OTHER OBLIGATIONS
4.1 ACCESS TO FACILITIES AND EMPLOYEES. Customer shall provide to SunGard
access to the Customer's facilities, equipment and employees, and
shall otherwise cooperate with SunGard, as reasonably necessary for
SunGard to perform its implementation, training, support and other
obligations under this Agreement.
4.2 PROCUREMENT OF HARDWARE AND OTHER ITEMS. Customer shall be
responsible, at its expense, for procuring and maintaining the
communications equipment and lines, computer equipment, software and
all other out of pocket expenses, which comprise the Specified
Configuration described on Schedule A, and for updating the Specified
Configuration in accordance with SunGard's published updates to
Schedule A.
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4.3 NOTICES AND CERTIFICATIONS. Customer shall give written notice to
SunGard (in accordance with Section 9.1) whenever Customer intends to
increase the transaction volume, in any material respect, to be
processed on the System. Customer shall promptly complete and return
to SunGard periodic certifications which SunGard, in its sole
discretion, may from time to time send to Customer, certifying that
Customer has complied and is then in compliance with the provisions of
Section 7.
4.4 CERTAIN LEGAL REQUIREMENTS. Customer shall be responsible, at its
expense, for complying with all laws and regulations of any
jurisdiction applicable to use of System Services, including laws and
regulations pertaining to (a) remote use of software and related
property, (b) communication or transmission of data into or out of a
jurisdiction or (c) registration of this Agreement. Customer shall
indemnify and hold harmless SunGard (and its affiliates, and the
respective directors, officers, employees and agents of SunGard and
its affiliates) from and against all actions, claims, damages or
liabilities (including reasonable attorneys' fees) arising out of any
violation by Customer of any such laws or regulations.
5. PAYMENTS
5.1 INITIAL IMPLEMENTATION SUPPORT AND MINIMUM TRAINING. Customer shall
pay to SunGard the fees for Initial Implementation Support and Minimum
Training in the amounts stated on Schedule C, in accordance with the
payment terms stated on Schedule C.
5.2 MONTHLY FEES. On a monthly basis, beginning on the first day of
processing live trades on the System ("Effective Date") and continuing
until termination of this Agreement. Customer shall pay to SunGard the
fees described on Schedule C. Customer shall pay minimum monthly fees
for certain services as stated on Schedule C.
5.3 SPECIAL SERVICE FEES. Customer shall pay to SunGard the service fees
stated on Schedule C for conversion, consulting services, custom
modification programming, support services relating to custom
modifications, assistance with data transfers, and other specialized
support services under Sections 3.4. In each case where service fees
are not specified on Schedule C, then the fees for such services shall
be based upon SunGard's standard professional fee rates. SunGard's
standard professional fee rates in effect on the date of this
Agreement are stated on Schedule C and are subject to increase in the
ordinary course of business.
5.4 EXPENSE REIMBURSEMENTS. Customer shall be responsible for all
out-of-pocket expenses expenses incurred by SunGard. Whenever any
services are provided by SunGard at a Customer location or any other
location requested by Customer other than one of SunGard's locations,
Customer shall reimburse SunGard for its reasonable travel, lodging,
meal and related expenses incurred by SunGard personnel in providing
such services.
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5.5 OTHER FEES. If Customer requires replacement or additional copies of
the Documentation, then Customer shall pay to SunGard the
corresponding fees stated on Schedule C.
5.6 TAXES. The fees and other amounts payable by Customer to SunGard under
this Agreement do not include any taxes of any jurisdiction that may
be assessed or imposed upon the services provided under this Agreement
or the copies of the Documentation provided to Customer, including
sales, use, excise, value added, personal property, export, import and
withholding taxes, excluding only taxes based upon SunGard's net
income. Customer shall directly pay any such taxes assessed against
it, and Customer shall promptly reimburse SunGard for any such taxes
payable or collectable by SunGard.
5.7 PAYMENT TERMS. SunGard shall submit invoices to Customer on a monthly
basis for monthly fees and routine expense reimbursements. SunGard
shall submit invoices to Customer for any other fees or expense
reimbursements as and when incurred. All invoices shall be sent to
Customer's address for invoices stated on Schedule A. Customer's
payments shall be due within thirty (30) days after receipt of
Invoice. Interest at the rate of eighteen percent (18%) per annum (or,
if lower, the maximum rate permitted by applicable law) shall accrue
on any amount not paid by Customer to SunGard when due under this
Agreement, and shall be payable by Customer to SunGard on demand
unless subject to a good faith dispute. Except as provided in Sections
6.1 and 6.2(c), all fees and other amounts paid by Customer under this
Agreement are non-refundable, unless subject to a good faith dispute.
5.8 FEE INCREASES. Beginning on the first day of the sixth (6th) year of
processing of live trades and on an annual basis, by giving at least
one hundred and twenty (120) days advance written notice to Customer
(in accordance with Section 9.1), SunGard may increase the fees
payable under this Agreement.
6. WARRANTIES AND LIMITATIONS
6.1 PERFORMANCE. SunGard shall use reasonable care in processing all work
transmitted to it by Customer. SunGard shall have no liability under
this Section 6.1 unless, within thirty (30) days after the applicable
date of service, SunGard receives notice from Customer (in accordance
with Section 9.1) describing a material processing error caused by
SunGard's failure to use reasonable care, together with adequate
supporting documentation and data. Upon receipt of any such notice,
SunGard's only obligation under this Section 6.1 is to correct the
error and redo the work affected as soon as reasonably practical at no
additional charge, or, at SunGard's option, to refund or credit the
charges applicable to the work affected.
6.2 RIGHT TO PERFORM SERVICES; NO INFRINGEMENT. SunGard warrants to
Customer that it has the full legal right to use the System to provide
the System Services in accordance with this Agreement, and that the
System Services and
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Documentation, in the form delivered to Customer by SunGard and when
properly used for the purpose and in the manner specifically
authorized by this Agreement, do not infringe in any material respect
upon any United States patent or copyright or any trade secret or
other proprietary right of any person. SunGard shall reimburse
Customer for any damages finally awarded against and paid by Customer
to the extent attributable to a violation of the foregoing warranty.
SunGard shall have no liability under this Section 6.2 unless Customer
gives written notice to SunGard (in accordance with Section 9.1)
within ten (10) days after any applicable infringement claim is
initiated against Customer and allows SunGard to have sole control of
the defense or settlement of the claim. If any applicable infringement
claim is initiated, or in SunGard's sole opinion is likely to be
initiated, against Customer or SunGard, then SunGard shall have the
option, at its expense, to:
(a) modify or replace all or the infringing part of the System
Services, System or Documentation so that it is no longer
infringing, provided that the System Services do not change in
any material adverse respect; or
(b) procure the right to continue using or providing the infringing
part of the System Services, System or Documentation; or
(c) remove all or the infringing part of the System Services, System
or Documentation, and refund to Customer the corresponding
portion of any monthly fee paid in advance, in which case this
Agreement shall terminate with respect to the affected System
Services.
6.3 CARE OF DATA. SunGard shall use commercially reasonable care in
handling tapes or other materials which encode or contain data
belonging to Customer. SunGard's only obligation for breach of this
Section 6.3 shall be to replace or repair the tape or material lost or
damaged and to make commercially reasonable efforts to regenerate any
lost data from backup copies maintained by SunGard or from source data
provided by Customer.
6.4 APPLICATION OF DATA. SunGard shall have no liability for any loss or
damage resulting from any application of the results obtained from the
use of any services provided under this Agreement or from any
unintended or unforeseen results obtained from the use of any services
provided under this Agreement.
6.5 EXCLUSION FOR UNAUTHORIZED ACTIONS. SunGard shall have no liability
under any provision of this Agreement with respect to any performance
problem, claim of infringement or other matter to the extent
attributable to any unauthorized or improper use or modification of
the System, any unauthorized combination of the System with other
software (other than software included in the Specified
Configuration), or any breach of this Agreement by Customer.
6.6 FORCE MAJEURE. SunGard shall not be liable for, nor shall SunGard be
considered in breach of this Agreement due to, any failure to perform
its obligations under
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this Agreement as a result of a cause beyond its control, including
any act of God or a public enemy, act of any military, civil or
regulatory authority, change in any law or regulation, fire, flood,
earthquake, storm or other like event, disruption or outage of
communications, power or other utility, labor problem, unavailability
of supplies, or any other cause, whether similar or dissimilar to any
of the foregoing, which could not have been prevented by SunGard with
reasonable care. Customer acknowledges that availability of System
Services is subject to normal System downtime and that SunGard is not
responsible for delays or inability to access services caused by
communications problems.
6.7 DISCLAIMER AND EXCLUSIONS. EXCEPT AS EXPRESSLY STATED IN THIS
AGREEMENT, SUNGARD MAKES NO REPRESENTATIONS OR WARRANTIES, ORAL OR
WRITTEN, EXPRESSED OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, REGARDING THE
SYSTEM, THE SYSTEM SERVICES OR ANY OTHER MATTER PERTAINING TO THIS
AGREEMENT. EXCEPT FOR DAMAGES REIMBURSABLE UNDER SECTION 6.2,
SUNGARD'S TOTAL LIABILITY UNDER THIS AGREEMENT SHALL UNDER NO
CIRCUMSTANCES EXCEED AN AMOUNT EQUAL TO FIVE HUNDRED THOUSAND DOLLARS
($500,000). UNDER NO CIRCUMSTANCES SHALL SUNGARD BE LIABLE TO CUSTOMER
OR ANY OTHER PERSON FOR LOST REVENUES, LOST PROFITS, LOSS OF BUSINESS,
OR ANY INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY NATURE, WHETHER OR NOT
FORESEEABLE.
6.8 OTHER LIMITATIONS. The warranties made by SunGard in this Agreement,
and the obligations of SunGard under this Agreement, run only to
Customer and not to its affiliates, its customers or any other
persons. Under no circumstances shall any other person be considered a
third party beneficiary of this Agreement or otherwise entitled to any
rights or remedies under this Agreement. Customer shall have no rights
or remedies against SunGard except as specifically provided in this
Agreement. No action or claim of any type relating to this Agreement
may be brought or made by Customer more than one (1) year after
Customer first has knowledge of the basis for the action or claim.
7. CONFIDENTIALITY, OWNERSHIP AND RESTRICTIVE COVENANTS
7.1 CONFIDENTIAL INFORMATION. All business information disclosed by one
party to the other in connection with this Agreement shall be treated
as confidential information unless it is or later becomes publicly
available through no fault of the other party or it was or later is
rightfully developed or obtained by the other party from independent
sources free from any duty of confidentiality. Each party's
confidential information shall be held in strict confidence by the
other party, using the same standard of care as it uses to protect its
own confidential information, and shall not be used or disclosed by
the other party for any purpose except as necessary to implement or
perform this Agreement, or except as required by law
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provided that the other party is given a reasonable opportunity to
obtain a protective order. Without limiting the generality of the
foregoing, such confidential information shall include Customer's
data, reports generated by SunGard from Customer's data and the
details of Customer's computer operations.
7.2 SUNGARD'S PROPRIETARY ITEMS. Customer acknowledges that the System and
Documentation, the object code and the source code for the System, the
name of the System, the visual expressions, screen formats, report
formats and other design features of the System, all ideas, methods,
algorithms, formulae and concepts used in developing and/or
incorporated into the System or Documentation, all future
modifications, revisions, updates, releases, refinements, improvements
and enhancements of the System or Documentation, all derivative works
based upon any of the foregoing, and all copies of the foregoing
(referred to, collectively, as "Proprietary Items") are trade secrets
and proprietary property of SunGard, having great commercial value to
SunGard. Customer acknowledges that the restrictions in this Agreement
are reasonable and necessary to protect SunGard's legitimate business
interests.
7.3 OWNERSHIP RIGHTS. All Proprietary Items provided to Customer under
this Agreement are being provided on a strictly confidential and
limited use basis. Title to all Proprietary Items and all related
patent, copyright, trademark, service mark, trade secret, intellectual
property and other ownership rights shall remain exclusively with
SunGard, even with respect to such items that were created by SunGard
specifically for or on behalf of Customer. This Agreement is not an
agreement of sale, and no title, patent, copyright, trademark, service
mark, trade secret, intellectual property or other ownership rights to
any Proprietary Items are transferred to Customer by virtue of this
Agreement. All copies of Proprietary Items in Customer's possession
shall remain the exclusive property of SunGard and shall be deemed to
be on loan to Customer during the term of this Agreement.
7.4 DISCLOSURE RESTRICTIONS. All Proprietary Items in Customer's
possession, whether or not authorized, shall be held in strict
confidence by Customer, and Customer shall take all steps reasonably
necessary to preserve the confidentiality thereof. Customer shall not,
directly or indirectly, communicate, publish, display, loan, give or
otherwise disclose any Proprietary Item to any person, or permit any
person to have access to or possession of any Proprietary Item.
Customer shall limit its use of and access to Proprietary Items to
only those of its employees whose responsibilities require such use or
access. Customer shall advise all such employees, before they receive
access to or possession of any Proprietary Items, of the confidential
nature of the Proprietary Items and require them to abide by the terms
of this Agreement. Customer shall be liable for any breach of this
Agreement by any of its employees or any other person who obtains
access to or possession of any Proprietary Item from or through
Customer.
7.5 USE RESTRICTIONS. Customer shall not do, nor shall it permit any other
person to do, any of the following:
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(a) use any Proprietary Item for any purpose, at any location or in
any manner not specifically authorized by this Agreement; or
(b) make or retain any copy of any Proprietary Item except as
specifically authorized by this Agreement; or
(c) create or recreate the source code for the System, or
re-engineer, reverse engineer, decompile or disassemble the
System; or
(d) modify, adapt, translate or create derivative works based upon
the System or Documentation, or combine or merge any part of the
System or Documentation with or into any other software or
documentation; or
(e) refer to or otherwise use any Proprietary Item as part of any
effort to develop a program having any functional attributes,
visual expressions or other features similar to those of the
System or to compete with SunGard; or
(f) remove, erase or tamper with any copyright or other proprietary
notice printed or stamped on, affixed to, or encoded or recorded
in any Proprietary Item, or fail to preserve all copyright and
other proprietary notices in any copy of any Proprietary Item
made by Customer; or
(g) sell, market, license, sublicense, distribute or otherwise grant
to any person, including any outsourcer, vendor, consultant or
partner, any right to use any Proprietary Item, whether on
Customer's behalf or otherwise; or
(h) use the System to conduct any type of service bureau or
timesharing operation or to provide remote processing, network
processing, network communications or similar services to any
person, whether on a fee basis or otherwise; or
(i) attempt to do any of the foregoing.
7.6 NOTICE AND REMEDY OF BREACHES. Customer shall promptly give written
notice to SunGard (in accordance with Section 9.1) of any actual or
suspected breach by Customer of any of the provisions of this Section
7, whether or not intentional, and Customer shall, at its expense,
take all steps reasonably requested by SunGard to prevent or remedy
the breach.
7.7 AUDIT. SunGard may, at its expense and by giving reasonable advance
written notice to Customer (in accordance with Section 9.1), enter
Customer locations during normal business hours and audit the number
of copies of the Documentation in Customer's possession and
information pertaining to Customer's compliance with the provisions of
this Section 7. 1f SunGard discovers that Customer is not in
compliance with the provisions of this Section 7
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in any material respect, then Customer shall reimburse SunGard for the
expenses incurred by SunGard in conducting the audit.
7.8 ENFORCEMENT. Customer acknowledges that any breach of any of the
provisions of this Section 7 shall result in irreparable injury to
SunGard for which money damages could not adequately compensate. If
there is a breach, then SunGard shall be entitled, in addition to all
other rights and remedies which SunGard may have at law or in equity,
to have a decree of specific performance or an injunction issued by
any competent court, requiring the breach to be cured or enjoining all
persons involved from continuing the breach. The existence of any
claim or cause of action which Customer or any other person may have
against SunGard shall not constitute a defense or bar to the
enforcement of any of the provisions of this Section 7.
7.9 DOCUMENTATION FOR CORRESPONDENTS. Notwithstanding the disclosure and
use restrictions set forth herein, Customer may copy and provide to
its correspondent brokers those portions of the Documentation
pertaining to the proper use of the System by Customer's correspondent
brokers (e.g, portions pertaining to trade input, data inquiries or
report generation), provided that (a) no Documentation shall be
provided to any correspondent broker of Customer unless and until such
correspondent broker signs a fully disclosed clearing agreement or
similar contract with Customer which requires the correspondent broker
to preserve the confidentiality of such Documentation, (b) any such
Documentation provided to any correspondent broker of Customer shall
be accompanied by a cover page identifying it as proprietary property
of SunGard Financial Systems Inc., and stating that it is subject to
Customer's contractual obligations to preserve the confidentiality
thereof, and (c) no modifications shall be made to the Documentation
provided to any correspondent broker of Customer without SunGard's
express prior written consent.
8. TERMINATION
8.1 INITIAL TERM; RENEWAL. The term of this Agreement begins on the
Effective Date stated on the first page of this Agreement and shall
continue for five (5) years, and thereafter for successive one-year
renewal terms unless and until terminated in accordance with this
Section 8 or any other section of this Agreement. SunGard or Customer
may terminate this Agreement at the end of the Initial Term or at the
end of any one-year renewal term by giving at least ninety (90) days
advance written notice of termination (in accordance with Section 9.1)
to the other.
8.2 TERMINATION BY CUSTOMER.
(a) Customer may terminate this Agreement immediately upon notice to
SunGard (in accordance with Section 9.1) if SunGard improperly
denies Customer access to the System Services and Customer's
files maintained in the System for more than one (1) business
day, or if SunGard fails to provide to Customer any daily reports
described on Schedule A for more
12
<PAGE>
than two (2) consecutive business days, in either case unless due
to a hardware or software malfunction or defect, in which case
SunGard shall be allowed a reasonable period of time to correct
the malfunction or defect.
(b) After the first two years of the Agreement, the Company may
terminate the Agreement upon at least six months notice if the
Company permanently discontinues its correspondent clearing
business and in no way provides correspondent clearing services.
8.3 TERMINATION BY SUNGARD. SunGard may immediately terminate this
Agreement, by giving written notice of termination to Customer (in
accordance with Section 9.1), upon the occurrence of any of the
following events:
(a) Customer fails to pay to SunGard, within ten (10) days after
SunGard makes written demand therefor, any past-due amount
payable under this Agreement including interest thereon) that is
not the subject of a good faith dispute as to which Customer has
given written notice to SunGard (in accordance with Section 9.1)
explaining its position in reasonable detail.
(b) Customer breaches, in any material respect, any of the provisions
of Section 7 or Section 9.3.
(c) Customer breaches any of its other obligations under this
Agreement and does not cure the breach within thirty (30) days
after SunGard gives written notice to Customer (in accordance
with Section 9.1) describing the breach in reasonable detail.
(d) Bankruptcy, insolvency, dissolution or liquidation proceedings of
any nature are instituted by or against Customer or Customer
discontinues all or a significant part of its business
operations.
8.4 SUSPENSION OF SERVICES. On the occurrence of any event which would
permit SunGard to terminate this Agreement under Section 8.3, in
addition to all other rights and remedies which SunGard may have at
law or in equity, SunGard may, without terminating this Agreement, and
in its sole discretion and without further notice to Customer, suspend
performance of any or all of its services under this Agreement and/or
activate internal controls in the System that are designed to deny
Customer access to the System Services and files, until and unless
SunGard determines, in its sole discretion and upon whatever
conditions SunGard chooses to impose on Customer, to resume
performance of some or all of the suspended services or allow Customer
access to the System Services and files.
8.5 EFFECT OF TERMINATION. Upon a termination of this Agreement, whether
under this Section 8 or otherwise, Customer shall immediately cease
all use of the System Services, Documentation and other Proprietary
Items, Customer shall promptly return to SunGard all copies of the
Documentation and any other Proprietary Items then in Customer's
possession. Customer shall remain liable for all
13
<PAGE>
payments due to SunGard with respect to the period ending on the date
of termination. Within thirty (30) days after termination of this
Agreement, Customer shall give notice to SunGard (in accordance with
Section 9.1) containing reasonable instructions regarding the
disposition of tapes, data, files and other property belonging to
Customer and then in SunGard's possession. SunGard shall comply with
that notice, except that SunGard may retain all such property until
SunGard receives all payments due to SunGard under this Agreement.
Upon request contained in such notice, SunGard shall convert
Customer's data to machine readable form to the extent practicable and
at Customer's expense. If Customer fails to give that notice within
thirty (30) days after termination of this Agreement, then SunGard may
dispose of such property as it sees fit. The provisions of Sections 5,
6 and 7 shall survive any termination of this Agreement, whether under
this Section 8 or otherwise.
9. OTHER PROVISIONS
9.1 NOTICE. All notices, consents and other communications under or
regarding this Agreement shall be in writing and shall be deemed to
have been received on the earlier of the date of actual receipt, the
third business day after being mailed by first class certified air
mail, or the first business day after being sent by a reputable
overnight delivery service. Any notice may be given by facsimile,
provided that signed written original is sent by one of the foregoing
methods within twenty-four (24) hours thereafter. Customer's address
for notices is stated on Schedule A. SunGard's address for notices is
504 Totten Pond Road, Waltham, Massachusetts 02154 Attention: Contract
Administration. Either party may change its address for notices by
giving written notice of the new address to the other party in
accordance with this Section 9.1.
9.2 Defined Terms. As used in this Agreement, the following terms have the
following meanings:
(a) "affiliate" means, with respect to a specified person, any person
which directly or indirectly controls, is controlled by, or is
under common control with the specified person as of the date of
this Agreement, for as long as such relationship remains in
effect.
(b) "copy' means any paper, disk, tape, film, memory device, or other
material or object on or in which any words, object code, source
code or other symbols are written, recorded or encoded, whether
permanent or transitory.
(c) "including" means including but not limited to.
(d) "person" means any individual, sole proprietorship, joint
venture, partnership, corporation, company, firm, bank,
association, cooperative, trust, estate, government, governmental
agency, regulatory authority, or other entity of any nature.
14
<PAGE>
9.3 PARTIES IN INTEREST. This Agreement shall bind, benefit and be
enforceable by and against SunGard and Customer and, to the extent
permitted hereby, their respective successors and assigns. Customer
shall not assign this Agreement or any of its rights hereunder, nor
delegate any of its obligations hereunder, without SunGard's prior
written consent. SunGard's consent shall not be unreasonably withheld
in the case of an assignment to a purchaser of or a successor to
substantially all of Customer's business, or to an affiliate of
Customer, provided that SunGard receives prior notice (in accordance
with Section 9.1) of the assignment together with the successor's
written undertaking to assume all of Customer's obligations under this
Agreement. Any change in control of Customer, and any assignment by
merger or otherwise by operation of law, shall constitute an
assignment of this Agreement by Customer for purposes of this Section
9.3.
9.4 RELATIONSHIP. The relationship between the parties created by this
Agreement is that of independent contractors and not partners, joint
venturers or agents.
9.5 ENTIRE UNDERSTANDING. This Agreement, which includes and incorporates
the Schedules referred to herein, states the entire understanding
between the parties with respect to its subject matter, and supersedes
all prior proposals, marketing materials, negotiations and other
written or oral communications between the parties with respect to the
subject matter of this Agreement. Any written, printed or other
materials which SunGard provides to Customer that are not included in
the Documentation are provided on an "as is" basis, without warranty,
and solely as an accommodation to Customer.
9.6 MODIFICATION AND WAIVER. No modification of this Agreement, and no
waiver of any breach of this Agreement, shall be effective unless in
writing and signed by an authorized representative of the party
against whom enforcement is sought. No waiver of any breach of this
Agreement, and no course of dealing between the parties, shall be
construed as a waiver of any subsequent breach of this Agreement.
9.7 SEVERABILITY. A determination that any provision of this Agreement is
invalid or unenforceable shall not affect the other provisions of this
Agreement.
9.8 HEADINGS. Section headings are for convenience of reference only and
shall not affect the interpretation of this Agreement.
9.9 JURISDICTION AND PROCESS. In any action relating to this Agreement,
(a) each of the parties irrevocably consents to the exclusive
jurisdiction and venue of the federal and state courts located in the
Commonwealth of Pennsylvania, (b) each of the parties irrevocably
waives the right to trial by jury, (c) each of the parties irrevocably
consents to service of process by first class certified mail, return
receipt requested, postage prepaid, to the address at which the party
is to receive notice in accordance with Section 9.1, and (d) the
prevailing party shall be
15
<PAGE>
entitled to recover its reasonable attorney's fees (including, if
applicable, charges for in-house counsel), court costs and other legal
expenses from the other party.
9.10 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA EXCLUDING
CHOICE OF LAW.
16
<PAGE>
SCHEDULE C1 CONT
TO REMOTE PROCESSING AGREEMENT
DATED SEPTEMBER 13, 1996
--------------------------------------------------------------------------------
SERVICE FEES
--------------------------------------------------------------------------------
2. The above charges include the following:
a. All reports and functionality as outlined in the Users Manual except:
1. Retail Portfolio System
2. Safekeeping System
3. Investment Portfolio
3. The Retail Portfolio Appraisal System fees are as follows:
a. $*** per account per month
b. $5,000.00 monthly minimum
4. Items not included in trade/cancel charge:
Programming or Custom Reports Quote
ENFORMS Quote
Additional sets of User Manuals $150.00 per copy
Labels/3x5 cards
0 - 2,000 min. $100.00 $.15 per item
2,001 -- 10,000 min. $300.00 $.06 per item
10,001-+ $.04 per item
$*** per month
Muni Bond Pricing $*** per CUSIP
Communication Boards, lines, Cost
Modems, etc.
Equipment Quote
Tapes Cost
Microfiche - original frame $2.00
- per copy $.10
IRS Year-End Processing Cost + 10 %
----------
*** Certain information on this page has been omitted and filed separately with
the Commission pursuant to a request for Confidential Treatment.
<PAGE>
SCHEDULE A
TO REMOTE PROCESSING AGREEMENT
DATED 7-10, 1995
--------------------------------------------------------------------------------
SOFTWARE AND RELATED INFORMATION
--------------------------------------------------------------------------------
SOFTWARE: PHASE3 System
DOCUMENTATION: PHASE3 Reference Manuals
PHASE3 Report Manuals
SPECIFIED
CONFIGURATION: Not applicable
ADDRESS FOR INVOICES: 717 North Harwood, Suite 680, Dallas, TX 75201
ADDRESS FOR NOTICES: 717 North Harwood, Suite 680. Dallas, TX 75201
<PAGE>
SCHEDULE C1
TO REMOTE PROCESSING AGREEMENT DATED
SERVICE FEES
1. For purposes of this Agreement, the cost per trade will be as noted below.
Activity resulting in trade charges as defined on Schedule C2. The minimum
monthly charge will be as noted below:
A. SOES Trades and Cancels B. All Other Trades and Cancels
Number of Trades Cost Number of Trades Cost
Per Month Per Trade Per Month Per Trade
---------- --------- ---------- ---------
*** $*** *** $***
*** $***
*** $***
Monthly Minimum: First six (6) months of processing live trades: $ 7,000
Month seven (7) through month twenty-four (24)
of processing live trades: $10,000
Month twenty-five (25) through the term of
this Agreement: $20,000
For processing of incoming correspondent accounts which are not converting from
another firm using the PHASE3 System, SunGard will waive the trade charges for
the first three months.
2. The above charges include the following:
a. All reports and functionality as outlined in the Users Manual except:
1. Retail Portfolio System
2. Safekeeping System
3. Investment Portfolio
3. The Retail Portfolio Appraisal System fees are as follows:
a. $*** per account per month
b. $5,000.00 monthly minimum
4. Items not included in trade/cancel charge:
Programming or Custom Reports Quote
ENFORMS Quote
Additional sets of User Manuals $150.00 per copy
----------
*** Certain information on this page has been omitted and filed separately with
the Commission pursuant to a request for Confidential Treatment.
<PAGE>
Labels/3x5 cards
0 - 2,000 min. $100.00 $.15 per item
2,001 -- 10,000 min. $300.00 $.06 per item
10,001-+ $.04 per item
Muni Bond Pricing $*** per month
$*** per CUSIP
Communication Boards, lines, Cost
Modems, etc.
Equipment Quote
Tapes Cost
Microfiche - original frame $2.00
- per copy $.10
IRS Year-End Processing Cost + 10%
----------
*** Certain information on this page has been omitted and filed separately with
the Commission pursuant to a request for Confidential Treatment.
2
<PAGE>
SCHEDULE C2
TO REMOTE PROCESSING AGREEMENT
DATED 7-10, 1995
--------------------------------------------------------------------------------
TRADE DEFINITION
--------------------------------------------------------------------------------
Trade Counts for PHASE3 Pricing
Principal
Customer Sell; Inventory Buy 1 Trade
Customer Buy; Inventory Sell 1 Trade
Inventory Buy; Inventory Sell 1 Trade
Agency
Client Buys; Broker Sells or Multiple Broker Sells 1 Trade
Client Sells; Broker Buys or Multiple Broker Buys 1 Trade
Cancel/Corrections
Originally billed for the first trade 1 Trade
Cancel 1 Trade
Rebill 1 Trade
-------
Total 3 Trades
When Issued
Originally billed for the first trade 1 Trade
Cancel When Issued 1 Trade
Regular Way Trade 1 Trade
-------
Total 3 Trades
Repo
Opening trade regardless of number of pieces of collateral 1 Trade
Closing trade regardless of number of pieces of collateral 1 Trade
Each collateral substitution 1 Trade
Reverse Repo
Same as Repo
TBA's
Originally billed for TBA 1 Trade
Cancel TBA 1 Trade
Each pool within a lot of an allocation 1 Trade
<PAGE>
SCHEDULE C3
TO REMOTE PROCESSING AGREEMENT
DATED 7-10, 1995
--------------------------------------------------------------------------------
SUNGARD BROKERAGE SYSTEMS STANDARD PROFESSIONAL FEES
--------------------------------------------------------------------------------
Daily Hourly
Vice President or above $2,000 $250
Director $1,440 $180
Product Manager/ $ 960 $120
Project Manager
Business Analyst $ 800 $100
Sr. Technical Consultant
Programmer $ 800 $100
<PAGE>
SCHEDULE C4
TO REMOTE PROCESSING AGREEMENT
DATED 7-10-95
--------------------------------------------------------------------------------
CONVERSION PROCESS
--------------------------------------------------------------------------------
A. IMPLEMENTATION PLANNING
The implementation planning sessions are held early in the conversion
process, at the client site. Planning sessions include Customer's
management and the SunGard conversion team. Objectives of these meetings
are:
o Define project organization
o Define status reporting mechanism
o Define issues resolution mechanism
o Define enhancement management mechanism
o Define file conversions
o Determine conversion dates
o Determine dependencies
o Develop conversion plan, complete with:
- key activities and target dates
- responsibilities of all participants
- training schedule
- testing methodologies
- network design
B. REVIEW OF OPERATIONAL PROCEDURES AND FUNCTIONS
The review of operational procedures and functions is conducted by the
SunGard conversion team. This review process is performed prior to
finalizing the detailed training schedule. Process includes:
o Complete review of each area of client operations:
- existing procedures
- existing forms
- existing reports
o Meet with supervisors and key personnel
o Review of work-flows
o Report mapping
o Identification and documentation of impact on operations
procedures/ organizational structure
o Identification of interfaces
<PAGE>
SCHEDULE C4 (CONT'D)
TO REMOTE PROCESSING AGREEMENT
DATED 7-10, 1995
--------------------------------------------------------------------------------
CONVERSION PROCESS
--------------------------------------------------------------------------------
C. CREATION OF PHASE3 ENVIRONMENT
Telecommunications and additional hardware requirements are determined
jointly between Customer's technical representative and the SunGard's
communications manager. The ordering, installation and testing of
telecommunications is the responsibility of SunGard. The ordering and
installation of any additional terminals and printers is the responsibility
of Customer. SunGard and Customer will jointly test any new terminals and
printers.
SunGard is responsible for the setup and configuration for the testing and
training firm.
o Hardware and telecommunications requirements defined
o Equipment and lines ordered, installed and tested
o Training firm setup and configured
o Installation and testing of required software modifications
D. FILE CONVERSIONS
SunGard will develop conversion programs to convert Customer's data files.
Testing and approval of conversion programs is a joint responsibility
between Customer and SunGard.
o Determination of files to be converted
o Conversion strategy
o Specifications for converting each file determined
o Develop conversion programs
o Written procedures for testing developed
o Schedule test conversions and verification
E. STATEMENTS & FORMS
Customer is responsible for choosing a statement vendor for printing
monthly customer statements. SunGard will support Customer and the vendor
in the development and testing of statements. Customer and SunGard will
evaluate all forms and determine if existing forms must be modified for
utilization with the PHASE3 System.
o Customer statements
o Confirmations
o Transfer fanfolds
o New account forms
o Buy/Sell tickets
o Checks, N&A Cards, labels, etc.
2
<PAGE>
SCHEDULE C4 (CONT'D)
TO REMOTE PROCESSING AGREEMENT
DATED 7-10, 1995
--------------------------------------------------------------------------------
CONVERSION PROCESS
--------------------------------------------------------------------------------
F. TRAINING
SunGard and Customer will jointly develop a comprehensive training
schedule. SunGard will be responsible for training Customer staff on the
PHASE3 application. Customer will be responsible for ensuring staff is
available for participation in scheduled classes.
o Application training for testing of new software modifications
o Application training for users
o Procedural training
G. INTERFACES
SunGard and Customer are jointly responsible for testing of all external
and internal interfaces. SunGard will be responsible for installation and
execution of interfaces. Customer is responsible for notification to all
external vendors and service organizations of conversion dates.
o Interface requirements defined
- external
- internal
o Program/unit testing
o Extensive testing with external sources
o Documentation of procedures
o Notification of conversion
H. USER ACCEPTANCE TESTING
Customer and SunGard are jointly responsible for development and execution
of test plans for user acceptance testing.
o Development of test strategy and plan
o Identification of test cases
o Development of test data
o Systems integration tests
o Regression tests
o Verification of test results
I. PROGRESS MEETINGS
Progress meetings will be scheduled frequently to provide for status
updates and issue discussion/resolution.
3
<PAGE>
SCHEDULE C5
TO REMOTE PROCESSING AGREEMENT
DATED 7-10, 1995
--------------------------------------------------------------------------------
IMPLEMENTATION TRAINING & INSTRUCTION FEES
--------------------------------------------------------------------------------
I. Conversion will be performed at no charge. The Company will be responsible
for all reasonable and pre-approved travel and lodging.
II. Conversion programming that would be done at no charge:
- custom confirmation program
- custom commission program
- custom downloads
III. Conversions for fully disclosed correspondent customers of the company's.
a. The fee to convert correspondent accounts that do not require an
on-site visit will be $1,500.00 per account. SunGard will convert
accounts that meet or exceed the following:
1) Name & Address file over 500
2) Over 250 customer accounts with money balances
Whenever possible, the Company will utilize ACATS to transfer
positions.
b. The Company will be responsible for charges associated with custom
programming requests or on-site consulting as stated in Exhibit C.
c. The Company will be responsible for all reasonable and pre-approved
travel and lodging.
<PAGE>
AMENDMENT TO THE REMOTE PROCESSING AGREEMENT
BETWEEN
SUNGARD FINANCIAL SYSTEMS, INC
AND
PENSON FINANCIAL SERVICES, INC
This is an Amendment dated September 13, 1996, ("Amendment") to the Data
Services Agreement between SunGard Financial Systems, Inc. ("SunGard"), 504
Totten Pond Road, Waltham, Massachusetts, and Penson Financial Services, Inc.
("Customer"), 8080 N. Expressway, Suite 1010, Dallas, Texas, a North Carolina
Corporation, dated as of July 10, 1995 ("Agreement")
The parties to the Agreement intending to be legally bound agree as follows:
Schedule C1 entitle "SERVICE FEES", as referenced in Section 5 of the Agreement,
is herby replaced with the attached, revised Schedule C1 which is incorporated
by reference herein and made a part hereof. This revised Schedule C1 will take
effect as of September 1, 1996.
Except as otherwise amended herein, the Agreement remains in full force and
effect.
SUNGARD FINANCIAL SYSTEMS, INC. PENSON FINANCIAL SERVICES, INC.
BY: /s/ David Taylor BY: /s/ Daniel Son
-------------------------------- --------------------------------
TITLE: President TITLE: President
----------------------------- -----------------------------
DATE: September 13, 1996 DATE: September 13, 1996
----------------------------- -----------------------------
<PAGE>
SCHEDULE C1
TO REMOTE PROCESSING AGREEMENT
DATED SEPTEMBER 13, 1996
--------------------------------------------------------------------------------
SERVICE FEES
--------------------------------------------------------------------------------
1. For purposes of this Agreement, the cost per trade will be as noted below.
Activity resulting in trade charges are defined on Schedule C2. The minimum
monthly charge will be as noted below:
A. SOES TRADES AND CANCELS B. ALL OTHER TRADES AND CANCELS
If less than 150,000 trades
per month are processed,
customer will be billed
as noted below:
Number of Trades Cost Number of Trades Cost
Per Month Per Trade Per Month Per Trade
*** $*** *** $***
*** $***
*** $***
*** $***
If 150,000 or more trades per
month are processed, customer
will be billed as noted below:
Number of Trades Cost
Per Month Per Trade
*** $***
*** $***
*** $***
*** $***
*** $***
Monthly Minimum: First six (6) months of processing live trades: $7,000
Month seven (7) through month twenty-four (24)
of processing live trades: $10,000
Month twenty-five (25) through the term of this
Agreement: $20,000
For processing of incoming correspondent accounts which are not converting from
another firm using the PHASE3 System, SunGard will waive the trade charges for
the first three months.
----------
*** Certain information on this page has been omitted and filed separately with
the Commission pursuant to a request for Confidential Treatment.
SCHEDULE C1-- PAGE 1
--------------------------------------------------------------------------------
<PAGE>
SCHEDULE C1 CONT.
TO REMOTE PROCESSING AGREEMENT
DATED SEPTEMBER 13, 1996
--------------------------------------------------------------------------------
SERVICE FEES
--------------------------------------------------------------------------------
2. The above charges include the following:
a. All reports and functionality as outlined in the Users Manual except:
1. Retail Portfolio System
2. Safekeeping System
3. Investment Portfolio
3. The Retail Portfolio Appraisal System fees are as follows:
a. $*** per account per month
b. $5,000.00 monthly minimum
4. Items not included in trade/cancel charge:
Programming or Custom Reports Quote
ENFORMS Quote
Additional sets of User Manuals $150.00 per copy
Labels/3x5 cards
0 -- 2,000 min. $100.00 $.15 per item
2,000 -- 10,000 min. $300.00 $.06 per item
10,001 -- + $.04 per item
Muni Bond Pricing $*** per month
$*** per CUSIP
Communication Boards, lines, Modems, etc. Cost
Equipment Quote
Tapes Cost
Microfiche -- original frame $2.00
-- per copy $.10
IRS Year-End Processing Cost + 10%
----------
*** Certain information on this page has been omitted and filed separately with
the Commission pursuant to a request for Confidential Treatment.
SCHEDULE C1-- PAGE 2
--------------------------------------------------------------------------------
<PAGE>
AMENDMENT TO THE REMOTE PROCESSING AGREEMENT
BETWEEN
SUNGARD FINANCIAL SYSTEMS INC.
AND
PENSON FINANCIAL SERVICES, INC.
This Amendment ("Amendment") to the Remote Processing Agreement between SunGard
Financial Systems Inc. ("SunGard") and Penson Financial Services, Inc.
("Penson"), is effective as of August 1, 2002.
BACKGROUND
Penson and SunGard are parties to that certain Remote Processing Agreement dated
July 10, 1995, as amended (hereinafter collectively referred as the "Original
Agreement"). Penson and SunGard desire to extend the term of the Original
Agreement and modify certain terms and conditions of the Original Agreement in
accordance with the terms and conditions hereof.
NOW, THEREFORE, in consideration of the foregoing and intending to be
legally bound hereby, the parties agree as follows:
1. Extension of Original Agreement. The Initial Term of the Original Agreement
is hereby extended to May 31 2008 ("New Extension End Date"). Thereafter this
Agreement will automatically renew for one (1) year renewal terms, provided that
either party may give the other at least 90 days written notice of its desire
not to enter into an additional renewal term.
2. Professional Services.
2.1 During the Initial Term, SunGard will provide to Customer a virtual
resources team ("Virtual Resource Team") consisting of one team leader (product
manager or project manager), one programmer and one business analyst, to assist
Customer in creating new software enhancements to and otherwise utilizing the
System. For software development and enhancement projects (each, a "Project"),
the initial requirements definition, analysis, and design work (collectively,
the "Initial Phase") will be performed at the time and materials rate set forth
in Schedule C1. Upon completion of the Initial Phase of any Project, SunGard
will provide Customer with a fixed bid to complete the remainder of such
Project. If Customer determines not to proceed further with the Project upon
receipt of the fixed bid, Customer shall be responsible to pay for the Initial
Phase of such Project only. If Customer determines to proceed with the Project,
Customer shall be responsible to pay for the Initial Phase and the fixed bid
submitted by SunGard. All other professional services matters performed by the
Virtual Resource Team shall be performed on a time and materials basis at the
time and materials rates set forth on Schedule C1.
2.2 Customer shall appoint a Project Liaison responsible for providing
access to the appropriate resources at Customer for project definition,
specifications, implementation planning and coordination between SunGard and
Customer.
1
<PAGE>
3. Fees.
3.1 Schedule C-1 of the Agreement is deleted in its entirety and is
replaced with Schedule C-1 attached hereto.
3.2 Notwithstanding any other provision herein, SunGard reserves the
right to pass through to Penson, and Penson agrees to pay SunGard for (i) all
products, services and software that Penson has agreed in writing are to be
provided through the System and that are provided by third parties (including by
SunGard affiliates) at an additional cost and (ii) telecommunications charges
that Penson has agreed in writing are to be provided by SunGard or its
affiliates at an additional cost (provided Penson is appropriately credited for
telecommunications charges that have been improperly passed through). All third
party supplier increases in cost affecting the System Services shall be paid by
Penson; provided that for any particular third party supplier, any such change
shall be passed through to Penson not more than once per year. SunGard will
provide Penson with thirty (30) days prior written notice of any such increases.
4. Early Termination Fee. Section 8.2 (b) of the Original Agreement is hereby
deleted and replaced in its entirety with the following:
8.2(b) Customer acknowledges that SunGard has made significant
concessions on its per trade fees and minimum trading fees,
that the parties' reasonable expectations of SunGard's profits
under this Agreement are greater than can be accounted for by
the new minimum trading fees, and that it would be extremely
difficult to measure in advance what SunGard's actual profits
under this Agreement will be. Therefore, the parties have
expressly agreed that under certain circumstances Customer
will pay SunGard a defined termination fee as a reasonable
estimate of SunGard's profits under this Agreement and as
liquidated damages and not as a penalty. Accordingly, if there
is any termination of this Agreement before the New Extension
End Date (for any reason other than a material, uncured (which
cure shall have been effected as required in the Agreement)
default (which default shall include any material breach of
any material provision of the Agreement) by SunGard), or if
Customer ceases to use the System as its complete and official
books and records (for U.S. accounts) prior to the New
Extension End Date, Customer will pay to SunGard the
Calculation Amount (as defined below) multiplied by the number
of months (with a one time adjustment for the number of days
in any incomplete monthly period) between the effective date
of termination (or cessation of use of the System as the
complete and official books and records, if sooner) and the
New Extension End Date. As used in this Section, the
"Calculation Amount" shall mean *** Dollars ($***) with
respect to
----------
*** Certain information on this page has been omitted and filed separately with
the Commission pursuant to a request for Confidential Treatment.
2
<PAGE>
each month beginning on the effective date of this Amendment
and continuing until April 30, 2004 and thereafter shall mean
***Dollars ($***) with respect to each month beginning as of
May 1, 2004 and thereafter.
5. (a) Beginning on the date of this Amendment through the New Extension Date if
a SunGard Competing B/D (as defined below) enters into agreements with and
clears the trades of at least two different, unaffiliated Identified Penson
Correspondents (as defined below), when immediately prior to such agreement with
and clearing by the SunGard Competing B/D the trades of such Penson
Correspondent to be cleared by the SunGard Competing B/D had been cleared by
Customer then Customer may, within thirty (30) days of the execution of such
agreements, terminate this Agreement by providing at least one hundred and
twenty (120) days prior written notice to SunGard of its intention to so
terminate.
(b) "SunGard Competing B/D" shall mean a broker dealer firm acquired by
SunGard or an affiliate of SunGard (and only for so long as that the SunGard
Competing B/D remains an affiliate of SunGard) that provides trade clearing
services to third parties.
(c) "Penson Correspondent" shall mean a correspondent broker of
Customer whose trades Customer clears under this Agreement but, with respect to
a correspondent broker that clears a portion of its trades through one or more
different clearing firm (other than Customer), only that portion of the
correspondent broker whose trades are cleared through Customer. "Penson
Correspondent" shall also include correspondent brokers of affiliates of
Customer irrespective of whether such affiliates of Customer have a relationship
with SunGard. "Identified Penson Correspondent" shall mean a Penson
Correspondent, with respect to whom, the SunGard Competing B/D has NOT, in good
faith, relied on a written statement from the Penson Correspondent to the effect
that Penson is not its clearing broker for the trades to be cleared by such
SunGard Competing B/D.
6. SunGard agrees that if there is a SunGard Competing B/D, then it will
instruct and cause such SunGard Competing B/D not to have a general pattern and
practice of soliciting Penson Correspondents intentionally, directly and
selectively.
7. Miscellaneous. All capitalized terms used herein and not defined shall have
the meanings ascribed to them in the Original Agreement. Except as expressly
amended hereby, the provisions of the Original Agreement shall remain in full
force and effect.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date
first above written.
SUNGARD FINANCIAL SYSTEMS, INC. PENSON FINANCIAL SERVICES, INC.
By: /s/ Gerald Murphy By: /s/ Daniel P. Son
--------------------------- ---------------------------
Print Name: Gerald Murphy Print Name: Daniel P. Son
---------------- ------------------
Print Title: President Print Title: President
---------------- ------------------
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SCHEDULE C1
TO REMOTE PROCESSING AGREEMENT
ORIGINAL AGREEMENT DATE -JULY 10, 1995
AMENDMENT DATE AS OF AUGUST 1, 2002
--------------------------------------------------------------------------------
SERVICE FEES
--------------------------------------------------------------------------------
1. For purposes of this Agreement, the cost per trade will be as noted below.
The combined trade volumes across all USD firms will be used to
determine the monthly trades.
All USD Trades and Cancels for Non-ECN Correspondents:
DAILY TRADES COST PER TRADE
---------------- --------------
*** $***
*** & Greater $***
All USD Trades and Cancels for ECN Correspondents:
---------------- --------------
All $***
The combined trade volumes across all Non-USD trades will be used to
determine monthly trades.
All Non-USD Trades and Cancels:
DAILY TRADES COST PER TRADE
---------------- --------------
All $***
Monthly Minimum for Trade Processing is $***.
The above charges include the following:
All reports and functionality outlined in the users manual except
(1) as described below in this Schedule C1,
(2) for third party products and services as described in this
Amendment or this Agreement or
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(3) other items that are not provided to SunGard Phase3 customer base
generally without an additional charge
2. Professional Services Rates for Virtual Resource Team:
TIME & MATERIALS RATES
Product Manager/Project Manager $80.00 per hour
Business Analyst $80.00 per hour
Programmer $80.00 per hour
Minimum Monthly Fees for Virtual Resource Team is $***
3. Equipment and additional items not included in above charges (upon use or
request by Customer)
Programming and developments Quote
ENFORMS Quote
Additional sets User Manuals $150 per manual
Labels/3x5 cards
0 - 2,000 min. $100.00 $.15 per item
2,001 - 10,000 min. $300.00 $.06 per item
10,001-+ $.04 per item
Muni Bond Pricing $*** per month
$*** per CUSIP
Communications Boards, lines, Modems, etc. Quote
Equipment Quote
Tapes Quote
IRS Year End Processing Cost + 10%
4. Data Replication $*** per month
New files added Quote
5. StreamBridge (Swift) $*** per month (as per the existing amendment
dealing with StreamBridge)
Per message pricing:
Up to *** $***
*** $***
*** - & over ***
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New Stream Interfaces Quote
6. Test Firm $*** per month (upon request or use by Customer)
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EXHIBIT B
FTID PRICING
GREY Shading Indicates service available, but not provides to SunGard
No Shading indicates service provided to Sungard
January 1, 2002
Domestic Data -- Usage Periods
DAILY WEEKLY MONTHLY
--------------------- ---------------- -------------------
EQUITY PRICES Select Maximum Select Maximum Select Maximum
-----------------------------------------------------------------------------------------------------------------------
Listed NA Equities & Mutual Funds $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
NOB $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
UTS $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
Unlisted ADRs $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
Equity Descriptive
-----------------------------------------------------------------------------------------------------------------------
Descriptive Data $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
Equity Announcements
-----------------------------------------------------------------------------------------------------------------------
NA Dividends $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
Options
-----------------------------------------------------------------------------------------------------------------------
U.S. Canadian Options $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
OPTIONS DESCRIPTIVE
-----------------------------------------------------------------------------------------------------------------------
Descriptive Data -- $*** -- $*** -- $***
-----------------------------------------------------------------------------------------------------------------------
CORPORATE GOVERNMENT BONDS
-----------------------------------------------------------------------------------------------------------------------
U.S. Corporate Bonds $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
Canadian Bonds $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
US Treasuries & Agencies $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
Long Term Certificates of Deposit $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
CORP/GOVT BOND DESCRIPTIVE DATA
-----------------------------------------------------------------------------------------------------------------------
Standard Information (formerly basic) $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
Terms & Conditions $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
CMO PRICES
-----------------------------------------------------------------------------------------------------------------------
First 100 $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
Next 150 (Total 250) $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
Next 250 (Total 500) $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
Additional $*** *** ***
-----------------------------------------------------------------------------------------------------------------------
CMO DESCRIPTIVE
-----------------------------------------------------------------------------------------------------------------------
Descriptive Data $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
FFIEC Data -- -- -- -- $*** $***
-----------------------------------------------------------------------------------------------------------------------
CMO FACTORS
-----------------------------------------------------------------------------------------------------------------------
Factors $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
MBS PRICES
-----------------------------------------------------------------------------------------------------------------------
All MBS Bonds $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
MBS DESCRIPTIVE
-----------------------------------------------------------------------------------------------------------------------
Descriptive Data $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
MBS FACTORS
-----------------------------------------------------------------------------------------------------------------------
Factors $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS PRICES
-----------------------------------------------------------------------------------------------------------------------
Range: Lower Upper
*** *** $*** $*** $*** $*** $*** $***
------------------------------------------------------------------------------
*** *** $*** $*** $*** $*** $*** $***
------------------------------------------------------------------------------
*** *** $*** $*** $*** $*** $*** $***
------------------------------------------------------------------------------
*** *** $*** $*** $*** $*** $*** $***
------------------------------------------------------------------------------
*** *** $*** $*** $*** $*** $*** $***
------------------------------------------------------------------------------
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*** *** $*** $*** $*** *** $*** $***
------------------------------------------------------------------------------
*** *** $*** $*** $*** $*** $*** $***
------------------------------------------------------------------------------
Each Additional $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
MUNICIPAL BOND DESCRIPTIVE
-----------------------------------------------------------------------------------------------------------------------
STANDARD INFORMATION
(FORMERLY BASIC)
-----------------------------------------------------------------------------------------------------------------------
Lower Upper
------------------------------------------------------------------------------
*** *** $*** $*** $*** $*** $*** $***
------------------------------------------------------------------------------
*** *** $*** $*** $*** $*** $*** $***
------------------------------------------------------------------------------
*** *** $*** $*** $*** $*** $*** $***
------------------------------------------------------------------------------
*** *** $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
TERMS & CONDITIONS
-----------------------------------------------------------------------------------------------------------------------
Lower Upper
*** *** $*** $*** $*** $*** $*** $***
------------------------------------------------------------------------------
*** *** $*** $*** $*** $*** $*** $***
------------------------------------------------------------------------------
*** *** $*** $*** $*** $*** $*** $***
------------------------------------------------------------------------------
*** *** $*** $*** $*** $*** $*** $***
-----------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2002
INTERNATIONAL DATA -- USAGE PERIODS
DAILY WEEKLY MONTHLY
-------------------- -------------------- ------------------
Minimum Fee Select Maximum Select Maximum Select Maximum
----------------------------------------------------------------------------------------------------------------------
Pricing & Corp Actions $*** $*** $*** $*** $*** $*** $***
----------------------------------------------------------------------------------------------------------------------
Pricing $*** $*** $*** $*** $*** $*** $***
----------------------------------------------------------------------------------------------------------------------
Corporation Actions $*** $*** $*** $*** $*** $*** $***
----------------------------------------------------------------------------------------------------------------------
DESCRIPTIVE
----------------------------------------------------------------------------------------------------------------------
Equity Descriptive $*** $*** $*** $*** $*** $*** $***
----------------------------------------------------------------------------------------------------------------------
Bond Descriptive $*** $*** $*** $*** $*** $*** $***
----------------------------------------------------------------------------------------------------------------------
End of Day Evaluations -- $*** $*** $*** $*** $*** $***
----------------------------------------------------------------------------------------------------------------------
Spot/Forward Rates -- $*** $*** $*** $*** $*** $***
----------------------------------------------------------------------------------------------------------------------
Select Fees are per security/per firm/per year. For example, a client pricing
100 North American equities daily would pay an annual fee of $*** (100*$***).
This client would also pay the annual fee for dividends of $*** (100* $***)
Minimum Fees denote the minimum amount invoiced per client. For example, a
client requesting pricing and corporate action data for 100 international
securities (100 * $*** = $***) would instead be required to pay $*** per year.
Maximum Fees denote the most that each client would pay for access to the
respective asset type. For example, a client pricing 4,500 U.S. equities daily
would pay no more than $***.
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