Exhibit 10(g)
BROKERAGE SERVICES AGREEMENT
(Dual Employee Program)
THIS AGREEMENT, dated as of JULY 17, 2002, is by and between UVEST FINANCIAL
SERVICES GROUP, INC., a North Carolina corporation doing business as UVEST
("UVEST"), and UNITED BANK OF PHILADELPHIA located in PHILADELPHIA, PA
("Subscriber").
THE PARTIES AGREE AS FOLLOWS:
1. Effective Date. This Agreement shall bind UVEST and Subscriber when
executed by an authorized representative of each party. The date of this
Agreement is referred to as the "Effective Date."
2. UVEST Centers. UVEST is a broker-dealer registered with the Securities
and Exchange Commission, (the "SEC") is a member of the National Association of
Securities Dealers, Inc., (the "NASD") and provides certain securities
brokerage, investment advisory services and insurance services under its UVEST
trademark to the general public, including depositors and other customers of
participating financial institutions, through the operation of UVEST service
centers ("UVEST Centers") located within the branches of such participating
financial institutions.
3. Determination of UVEST Center Locations. As soon as practicable
following the Effective Date, and from time to time during the term of this
Agreement, UVEST and Subscriber shall consult with each other and shall use all
reasonable efforts to determine the number and identity of Subscriber's
locations or locations of its affiliate depository institutions at which UVEST
shall open and operate UVEST Centers. All references to "Subscriber locations"
shall be deemed to include the location of Subscriber and such affiliate
depository institutions as applicable. UVEST shall use all reasonable efforts
expeditiously to open and operate such number of UVEST Centers at such locations
as may from time to time be designated by Subscriber and approved by UVEST. At
Subscriber's request and with UVEST's approval, UVEST shall transfer any UVEST
Center then being operated at any of Subscriber's locations which is being
closed or relocated to a different, location.
4. Subscriber's Obligations. Subscriber shall use all reasonable efforts to
provide the facilities and personnel and to cooperate with UVEST and to do all
other acts and things required by this Agreement to be provided or done by
Subscriber, to permit UVEST to open and operate the UVEST Centers in accordance
with the terms of this Agreement. Subscriber further agrees that it shall not
permit any other broker-dealer to offer brokerage Securities services at any of
Subscriber's locations during the term of this Agreement.
5. UVEST Program. The "UVEST Program" consists of the following services
which UVEST shall provide:
(a) Brokerage Services. Registered representatives of UVEST at the
UVEST Centers operated at Subscriber's locations and at the national UVEST
offices will, subject to all applicable laws, rules, regulations and
procedures, including those of the SEC and the NASD, and subject to the
terms and conditions hereof, execute purchases and sales of Securities and
Insurance (as hereinafter defined) for UVEST customers, including
depositors and other customers of Subscriber and the general public. As
used herein, the term "Security" or "Securities" shall have the meaning set
forth in the Securities Exchange Act of 1934, as amended and shall also
include all other financial instruments or products included in the UVEST
Program from time to time, including without limitation, debt and equity
instruments, mutual
funds and other financial instruments and products approved by appropriate
regulatory authorities from time to time for sale (directly or indirectly) by
financial institutions. As used herein, the term "Insurance" shall include
products in the UVEST Program from time to time, including fixed and variable
annuities, term, variable life, universal life, long-term care, disability,
whole life and other insurance products approved by appropriate regulatory
authorities from time to time for sale (directly or indirectly) by financial
institutions. WEST may retain one or more clearing brokers to perform order
execution, billing, collection, account surveillance and other services for
UVEST, which are customarily performed by clearing brokers.
UVEST shall give notice to Subscriber of any change in the clearing brokers
it uses to perform such services and will endeavor to give such notice prior to
such change. In order to execute such purchase and sale orders, WEST shall
establish and maintain cash and/or margin accounts for customers, such accounts
to be maintained as accounts of UVEST or its clearing broker. UVEST reserves the
right, in its sole discretion, to refuse to open any account or to execute any
order by any customer for the purchase or sale of a Security, which right shall
not be unreasonably exercised. Subscriber agrees that such right shall not have
been unreasonably exercised if UVEST believes in good faith that such an account
or such Security or transaction is not appropriate or suitable for such
customer.
(b) Investment Advisory Services. Registered representatives of UVEST
at the UVEST Centers operated at Subscriber's locations and at the national
UVEST offices, subject to compliance with and registration under all
applicable laws, rules and regulations and subject to the terms and
conditions hereof, will provide investment advice and recommendations to
UVEST customers (in accordance with each UVEST customer's suitability
profile and investment goals) based upon research conducted by, and
recommendations obtained from, investment advisory services and UVEST's
internal research group. UVEST shall determine the number of registered
representatives, which shall staff each WEST Center, located at one of
Subscriber's locations, which number shall be subject to approval by
Subscriber. Such determination shall in all events be subject to
Subscriber's approval of the registered representatives as provided in
Section 8(b) hereof.
(c) Marketing, Education, Research and Technical Services. UVEST will
provide Subscriber with marketing, education, research and technical
services, which will include:
1. advice and assistance regarding the selection of Subscriber's
locations at which UVEST shall open and operate UVEST Centers;
2. advice and assistance regarding the placement and set-up of
the UVEST Center at Subscriber's locations;
3. advice and assistance regarding the identification,
recruiting, obtaining licenses, and registration of qualified
personnel who will act as Dual Employees (as defined below) and
regarding the training of such persons to qualify as registered
representatives;
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18. monitoring of relevant laws, rules and regulations affecting
the UVEST Program and the operation of the UVEST Centers;
19. disbursement of Revenue Sharing Payments (as defined below);
and
20. such other services as may from time to time be outlined in
the UVEST compliance manual.
6. Modification of UVEST Program. The UVEST Program is a uniform program
owned and operated by UVEST. Subject to the provisions of Section 27 hereof,
UVEST may modify the UVEST Program from time to time for the intended purpose of
meeting applicable regulatory requirements, making the UVEST Program more
effective, efficient, economical or competitive, adapting to new technology or
conditions or enhancing the reputation or public acceptance of the UVEST
Program.
7. Revenue Sharing Payments.
(a) UVEST shall make payments to Subscriber with respect to all
Securities and Insurance transactions, which occur at, or are attributable
to, the UVEST Centers operated at Subscriber's locations ("Revenue Sharing
Payments"), in accordance with UVEST's schedule of Revenue Sharing Payments
in effect from time to time. UVEST's current schedule of Revenue Sharing
Payments is set forth on Schedule 1 attached to this Agreement. Revenue
Sharing Payments represent reimbursement for compensation of the Dual
Employees and payment for the use of the facilities and equipment of
Subscriber or its affiliate depository institutions, as applicable,
required for the operation of the UVEST Centers. The Board of Directors of
UVEST may, after careful consideration, amend the Revenue Sharing Payments
schedule from time to time during the term of this Agreement. WEST shall
notify Subscriber not less than 30 days in advance of any reduction in the
percentage of Revenue Sharing Payments, which reduction shall take effect
on the date specified in such notice; provided, no decrease in the
percentage of Revenue Sharing Payments shall be permitted within 12 months
after the Effective Date; and provided, further, Subscriber may terminate
this Agreement by giving notice to UVEST within 30 days following UVEST's
notice of any such reduction in the percentage of Revenue Sharing Payments.
If Subscriber gives a notice of termination to UVEST pursuant to this
Section 7(a), this Agreement will terminate 60 days following such notice
and the reduction in the percentage of Revenue Sharing Payments shall not
apply to Revenue Sharing Payments payable to Subscriber prior to such
termination.
(b) UVEST reserves the right to deduct from Revenue Sharing Payments
(i) all undisputed costs, expenses, charges and fees, if any, payable by
Subscriber to UVEST pursuant to this Agreement. UVEST shall make Revenue
Sharing Payments to Subscriber by the 15th of every month all Securities
and Insurance transactions for which it has received commissions through
the end of the immediately preceding calendar month. Each Revenue Sharing
Payment shall be accompanied by a complete record of transactions and, if
applicable, of any costs, expenses, charges or fees incurred by Subscriber
and deducted from such Revenue Sharing Payment.
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8. Dual Employees. At the UVEST Centers operated at Subscriber's locations,
Securities and Insurance transactions shall be effected, and investment advice
and recommendations shall be disseminated, only by registered representatives of
UVEST, who shall at all times be registered and qualified with the SEC, the
NASD, and all other applicable federal and state securities and insurance laws
(including without limitation investment advisor laws); and who shall undertake
such employment by UVEST in addition to their employment by Subscriber. Such
persons are referred to in this Agreement as "Dual Employees" or "registered
representatives." Each Dual Employee shall enter into an employment agreement
with UVEST, in a form to be provided by UVEST and agreed to by Subscriber,
setting forth the terms of the Dual Employee's employment as a registered
representative. Neither Subscriber nor any of its affiliate depository
institutions shall have any responsibility for supervision of the Securities
brokerage and investment advisory services performed by the Dual Employees or
for compliance by the Dual Employees with UVEST's standards of conduct or
procedures established for such persons and, except as set forth in Sections
8(d) and 8(e) hereof, shall not be obligated to notify UVEST regarding any Dual
Employee's acts.
(a) Compensation. Subscriber shall pay the compensation of the Dual
Employees in amounts to be determined by Subscriber and UVEST. UVEST shall
reimburse Subscriber for such compensation payments by means of Revenue
Sharing Payments. Subscriber shall compensate Dual Employee as permitted by
federal and state securities and banking laws, rules and regulations.
Subscriber agrees to maintain payroll and bonus records for each Dual
Employee, to withhold payroll taxes from the compensation of each Dual
Employee, and to remit payroll taxes for each Dual Employee (including the
employer's portion of any such taxes) to the appropriate government
agencies in compliance with applicable law.
(b) Number; Identification and Acceptability. Subscriber and UVEST
shall determine the individuals, which shall receive offers of employment
as registered representatives of UVEST. If UVEST decides to make an offer
of employment to one of Subscriber's employees, to which Subscriber agrees,
such person shall become a Dual Employee and Subscriber shall make
available to UVEST upon UVEST's request all records in Subscriber's
possession which UVEST reasonably considers necessary, or which are
required by law, rule or regulation, in connection with such person's
employment, qualification and registration as a UVEST representative. A
Dual Employee may be assigned to more than one UVEST Center; provided in no
event shall any Dual Employee be assigned to any UVEST Center other than
any Subscriber locations.
(c) Training. The Dual Employees shall be required to pass one or more
examinations prescribed by law in order to qualify to act as registered
representatives and Insurance representatives. Prior to taking such
examination(s), each Dual Employee must successfully complete certain
training, including a prescribed pre-examination course. Either UVEST or
third-party vendors shall provide such pre-examination training, at
Subscriber's expense. UVEST shall notify Subscriber of the availability of
such training. UVEST shall provide additional training of the Dual
Employees with respect to the UVEST Program subsequent to their
qualification as registered representatives. Subscriber shall not prevent
the Dual Employees from being available to fully participate in such pre-
and post-qualification training and in such further training, if any, as
UVEST may provide.
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(d) Control by UVEST. UVEST shall exercise exclusive control of the
Dual Employees with respect to their conduct of Securities brokerage,
Insurance sales and investment advisory activities at the UVEST Centers and
UVEST shall cause their conduct in such capacity to be governed in all
respects:
(i) by UVEST's compliance and procedures manuals and all other
manuals, procedures, rules and instructions of UVEST, current copies
of which UVEST has provided or will provide to Subscriber and such
Dual Employees, and
(ii) by applicable laws, rules, and regulations and policies of
applicable regulatory agencies, all as in effect from time to time.
Subscriber shall strictly honor such control relationship and, subject
to Section 25 hereof, neither it nor any of its affiliates, nor any
person related to any of them shall have any involvement whatsoever in
any of the Securities brokerage, Insurance sales and investment
advisory services performed by the Dual Employees. UVEST alone shall
exercise all rights and remedies of the "Employer" set forth in the
employment agreement with each Dual Employee except as otherwise
specified herein. Notwithstanding the above, it is understood and
agreed to between UVEST and Subscriber that, to the extent that the
loss is not attributable to the negligence or other fault of either
party, if any Dual Employee embezzles or otherwise steals from UVEST,
UVEST shall bear such loss, and if any Dual Employee embezzles or
otherwise steals from Subscriber or any of its affiliates, Subscriber
or such affiliate shall bear such loss. It is further understood and
agreed that any loss due to a mysterious disappearance of funds from
either UVEST or Subscriber shall be borne by the party suffering such
disappearance.
(e) Discipline. Each Dual Employee shall be subject to discipline by
UVEST and by various federal and state regulatory authorities, Securities
exchanges, clearing corporations or associations, associations of
Securities brokers and dealers and certain other entities having
jurisdiction over the operation of the UVEST Centers and the conduct of the
Dual Employees. Subscriber shall cooperate with UVEST in all respects in
connection with the enforcement of any sanctions imposed by UVEST or by any
such entities against any Dual Employee. Such disciplinary measures may
include suspension or dismissal of any Dual Employee as a registered
representative of UVEST. In the event of any such suspension or dismissal,
Subscriber shall impose, upon UVEST's request, the same sanction with
respect to the Dual Employee's employment by Subscriber as it relates to
securities activities, and shall use its best efforts to cause any of its
affiliates who employ such Dual Employee in any capacity to impose the same
sanction with respect to the Dual Employee's employment by such affiliate
as it relates to securities activities. Unless a Dual Employee has been
suspended or barred by such a regulatory authority, UVEST will not
terminate or suspend a Dual Employee except in the event of material
non-compliance with UVEST's standards of conduct. UVEST and Subscriber
agree to advise each other promptly upon receipt of any consumer complaint
received with respect to Securities services and further agree to report to
each other any violation of any law, rule or regulation or any of UVEST's
standards of conduct or procedures for registered representatives of which
they have knowledge, it being understood that Subscriber shall not have any
obligation to monitor the activities of the Dual Employees with regard to
such laws, rules or regulations or UVEST's' standards of conduct or
procedures established for such persons.
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9. Indemnification.
(a) UVEST shall, provided Subscriber satisfies its obligations
hereunder, defend, indemnify and hold harmless Subscriber (and each person
or entity which controls Subscriber within the meaning of Section 20(a) of
the Securities Exchange Act of 1934, as amended or Section 15 of the
Securities Act of 1933, as amended), its affiliate depository institutions
and their respective directors, officers, agents and employees (other than
Dual Employees to the extent provided in Section 9(b) below), against any
and all losses, claims, damages, liabilities, actions, costs or expenses to
which such indemnified party may become subject to the extent such losses,
claims, damages, liabilities, actions, costs or expenses arise out of or
are based upon:
(i) the failure of UVEST to remain a member of the NASD or to
remain a duly licensed broker-dealer under federal and state
securities laws;
(ii) any violation of federal or state securities or insurance
laws (including, without limitation, laws relating to the registration
or qualification as a broker-dealer, investment advisor or insurance
agent) by UVEST, its officers, its agents or its employees (including
Dual Employees, but only when such Dual Employees are acting in their
capacity as registered representatives of UVEST) arising out of the
purchase, sale, offer to purchase or offer to sell, or the furnishing
of investment advice with respect to, any Security at a UVEST Center;
(iii) any breach, default or violation of, under or with respect
to any of UVEST's duties, obligations, representations, warranties or
covenants contained in this Agreement; or
(iv) any negligence, gross negligence, recklessness or willful or
intentional misconduct of, or violation of any law by, UVEST or any
UVEST employee or agent (including any Dual Employee in his/her
capacity as a representative of UVEST).
UVEST agrees to maintain, in full force and effect, insurance in amounts
sufficient to meet its indemnification obligations under this Section 9(a); in
such form as shall be established by the UVEST Board of Directors from time to
time.
(b) In no event, however, shall such indemnification inure exclusively
to the personal benefit of any Dual Employee whose action or failure to act
was the cause of or resulted in the violation of federal or state
securities or insurance laws and in no event shall such indemnification
result in the payment of moneys to any such Dual Employee. In addition,
there shall be no indemnification under this Section 9(b) to the extent the
violation of federal or state securities or insurance laws was the result
of action or failure
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to act by a Dual Employee where such Dual Employee was told to perform such
action or to refrain from so acting by an officer of Subscriber.
(c) Subscriber shall, provided UVEST satisfies its obligations
hereunder, defend, indemnify and hold harmless UVEST (and each person or
entity which controls UVEST within the meaning of Section 20(a) of the
Securities Exchange Act of 1934, as amended or Section 15 of the Securities
Act of 1933, as amended), its directors, officers, agents and employees
against any and all losses, claims, damages, liabilities, actions, costs or
expenses to which such indemnified party may become subject to the extent
such losses, claims, damages, liabilities, actions, costs or expenses arise
out of or are based upon:
(i) the failure of Subscriber to comply with applicable federal
and state laws relating to Subscriber or its subsidiaries other than
federal or state securities or insurance laws relating to the offer or
sale of Securities, investment advisory services or broker-dealer
activities relating thereto except as contemplated by (ii) and (iii)
below;
(ii) the failure of Subscriber to obtain the approval of UVEST
for any advertising, promotional materials or marketing efforts for
the UVEST Program;
(iii) except as contemplated pursuant to Section 25 hereof,
interference by Subscriber or by any of its directors, officers,
agents or employees (including any Dual Employee acting in a capacity
other than as a provider of brokerage services) with UVEST's
supervision and control of Dual Employees with respect to their
conduct of securities brokerage and investment advisory activity at
the UVEST Centers;
(iv) the failure of Subscriber to maintain payroll and bonus
records for each Dual Employee, to withhold payroll taxes from the
compensation of each Dual Employee, and to remit payroll taxes for
each Dual Employee (including the employer's portion of any such
taxes) to the appropriate government agencies in compliance with
applicable law, which functions Subscriber has agreed to perform on
behalf of UVEST;
(v) the acts or omissions of Subscriber's Non-Dual Employees (as
defined below), except to the extent of acts or omissions where such
non-Dual Employee was told to perform such action or to refrain from
so acting by any employee of UVEST, including a Dual Employee;
(vi) any breach, default or violation of, under or with respect
to any of Subscriber's duties, obligations, representations,
warranties or covenants contained in this Agreement; or
(vii) any negligence, gross negligence, recklessness or willful
or intentional misconduct of Subscriber or any Subscriber employee or
agent (excluding any Dual Employee acting in his/her capacity as a
representative of UVEST).
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(d) Promptly after receipt by an indemnified party under this Section
9 of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the party to this Agreement from which it is seeking
indemnification under this Section 9, notify such other party in writing of
such claim or the commencement of such action, but the failure to notify
the indemnifying party will not relieve the indemnifying party of any
liability it may have to any indemnified party, except to the extent that
the indemnifying party demonstrates that its liability for such action is
prejudiced by the indemnifying party's failure to give notice. In case any
such action is brought against any indemnified party, and such indemnified
party notifies UVEST or Subscriber, as appropriate, of the commencement
thereof, as provided herein, UVEST or Subscriber, as appropriate, shall be
entitled to participate therein and, at its option, assume the defense
thereof. Upon assumption by UVEST or Subscriber, as appropriate, of the
defense of such action, UVEST or Subscriber, as appropriate, will cease to
be liable to such indemnified party under this Section 9 for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof.
(e) An indemnified party hereunder shall settle a claim for which it has
requested or intends to request indemnification only with the consent of the
indemnifying party.
10. Non-Dual Employees.
(a) Limited activities. Employees of Subscriber or its affiliate
depository institutions who are not also registered representatives
("Non-Dual Employees") may distribute promotional literature regarding the
UVEST Program, direct persons to registered representatives of UVEST,
provide ordinary banking services such as crediting or debiting accounts,
even though such services are incidental to transactions with UVEST, and
perform other clerical and ministerial tasks to the extent that employees
would perform such tasks in any other situation. Non-Dual Employees may not
recommend Securities or Insurance products, provide investment advice, hold
themselves out as agents of UVEST, or engage in any Securities brokerage or
Securities investment advisory activities to the extent that engaging in
such activities would require the Non-Dual Employees to register and
qualify with the NASD, as such requirements may be amended from time to
time, or would require the Subscriber or its affiliate depository
institutions to register as a broker-dealer under federal or state
securities laws, as such laws may be amended from time to time. Subscriber
shall comply in all respects with UVEST's Compliance Manual for UVEST
participants ("Participants' Compliance Manual"), as it may be modified
from time to time, shall monitor the activities of, and cause compliance
by, Non-Dual Employees with UVEST's standards of conduct established for
such persons and shall report to UVEST, in the manner set forth in Section
8(e) hereof, any violations of such standards of conduct of which
Subscriber has knowledge. Neither UVEST nor Subscriber shall furnish
incentive compensation to any Non-Dual Employee or otherwise compensate any
Non-Dual Employee, directly or indirectly, based upon the volume or
occurrence of Securities transactions, commissions or compensation
generated by UVEST or any UVEST Center; provided that, when permitted by
regulators and applicable law, Subscriber may pay referral fees to Non-Dual
Employees. Such referral fees shall be a one-time, per-customer fee of a
nominal, fixed-dollar amount, wholly unrelated to the execution of
Securities transactions or the volume of Securities traded by the customer.
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(b) Training. UVEST shall make materials available to assist
Subscriber in training Non-Dual Employees regarding standards of conduct
and permissible activities in connection with the UVEST Program. Subscriber
or its affiliate depository institutions shall make Non-Dual Employees
available from time to time to participate in such training.
11. Hours of Operation. Registered representatives of UVEST located at the
national UVEST offices will be available by telephone to provide Securities
brokerage and investment advisory services to UVEST customers during all New
York Stock Exchange trading hours and any Securities transactions thus effected
will be attributed to the appropriate UVEST Center.
12. Separation of Businesses. UVEST and Subscriber, including Subscriber's
affiliate depository institutions, shall each maintain strict and total
separation of their businesses from the business conducted at each UVEST Center,
including separation of records and of physical facilities. All Dual Employees
shall conduct business at all times in accordance with UVEST's corporate
identity policies, as expressed in Participant's Compliance Manual and herein,
so as not to lead to confusion between the business conducted by Subscriber and
the business conducted by UVEST through the operation of the UVEST Centers at
Subscriber's locations. Subscriber agrees to be bound by, and to comply in all
material respects with, the Participants' Compliance Manual, a current copy of
which UVEST has provided or will provide to Subscriber and which, as it may be
modified from time to time in accordance with the purposes set forth in Section
6 hereof, is incorporated in and made a part of this Agreement.
13. Access.
(a) UVEST supervisory personnel and representatives of state and
federal regulatory authorities and of any other entity having jurisdiction
over the operation of the UVEST Centers and the conduct of the Dual
Employees shall have unimpeded access during Subscriber's business hours to
the UVEST Centers, to all records maintained in connection with the
operation of the UVEST Centers and to Dual Employees and their personnel
records. At the time UVEST desires to exercise such access, UVEST shall
notify the manager of the branch in which the UVEST Center being accessed
is located and the Investment Program Manager of Subscriber and inform the
manager and such Investment Program Manager of the purpose of the visit.
(b) In addition to any rights of Subscriber and its affiliate
depository institutions pursuant to Section 25 hereof, the supervisory
personnel of Subscriber or its affiliate depository institutions and
representatives of their respective state and federal regulatory,
authorities and any other entity having jurisdiction over any of them or
the transactions contemplated under this Agreement shall have unimpeded
access during UVEST's business hours to all records of UVEST relating to
transactions effected hereunder.
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14. Subscriber Costs and Expenses.
(a) Direct Costs and Expenses. Subscriber shall be directly
responsible for the costs and expenses associated with the following items
in connection with the operation of the UVEST Centers at Subscriber's
locations:
1. the furnishings, accessories and equipment necessary to
establish the UVEST Center, including a UVEST technology platform
2. the service and maintenance for the UVEST technology platform;
3. investment research material employed in the UVEST Center;
4. telephones and other operating equipment;
5. Dual Employee compensation (which will be reimbursed to
Subscriber through Revenue Sharing Payments as provided herein) and
Dual Employee costs, including, without limitation, recruitment costs,
salary and benefits, travel (including but not limited to any travel
associated with pre-qualification or post-qualification training),
cost of pre-qualification training and prescribed pre-examination
course, examination fees and filing fees and UVEST's corporate
stationery and business cards;
6. Dual Employee post-qualification sales training materials;
7. recruitment costs, salary and benefits for any support
personnel;
8. Subscriber-sponsored advertising and promotion; and
9. all other costs associated with the operation of the UVEST
Centers at Subscriber's locations and not specified in Section 15
hereof. Subscriber shall pay all costs and expenses set forth in this
Section 14 directly to third-party vendors or to UVEST or the Dual
Employees, in accordance with UVEST's applicable standard procedures
and fee schedules, each as in effect from time to time. In the UVEST
Centers at Subscriber's locations, Subscriber and UVEST shall mutually
approve the furnishings, furniture, fixtures and materials to be used
by UVEST in the operation of the UVEST Center. UVEST may from time to
time, following notice to Subscriber, eliminate one or more of
Subscriber's direct costs or expenses.
(b) Indirect Costs and Expenses. With approval from Subscriber, UVEST
shall from time to time furnish to each UVEST Center promotional literature
in reasonable quantities determined by UVEST. Subscriber shall pay for such
items furnished in excess of such reasonable quantities and/or requiring
customization at a charge to Subscriber equal to UVEST's cost for such
items, which shall be based upon the cost of development, production
or purchase, shipping, handling, billing and any applicable taxes.
15. UVEST Costs and Expenses. UVEST shall be directly responsible for the
following costs and expenses in connection with the operation of the UVEST
Program:
1. all costs associated with the operation of UVEST's offices other
than at Subscriber's locations, including centralized investment research,
national and regional inquiry/help desks for use by UVEST registered
representatives and phone-in service for use by WEST customers during
non-regular business hours as set forth in Section 11 hereof;
2. all costs associated with the recruitment, training, qualification
and employment by UVEST of all UVEST employees who are not also employees
of Subscriber;
3. post-qualification training of Subscriber's Dual Employees and
materials for the orientation of Non-Dual Employees regarding the UVEST
Program;
4. reasonable quantities of promotional literature furnished from time
to time to each UVEST Center;
5. UVEST-sponsored advertising and promotion of the UVEST Program;
6. technical assistance program;
7. compliance and supervision; and
8. field sales support and related travel expenses.
16. Advertising and Promotion. Each party shall secure the other party's
prior written approval of all advertising and promotional materials, if any
prepared by or on behalf of such party which mention the other party or the
UVEST Program. All such advertising and promotional materials shall make it
clear that the UVEST Program is provided by UVEST and not by Subscriber, that
UVEST and Subscriber are separate, distinct and unaffiliated entities, and that
the investment products sold through UVEST Centers by UVEST are not deposits
insured by the FDIC. Subject to the provisions of Section 25 hereof, UVEST may
use Subscriber's name and may identify Subscriber's locations at which the UVEST
Centers are operated. UVEST and Subscriber shall also meet prior to or as soon
as possible after the opening of the first UVEST Center at one of Subscriber's
locations to develop a comprehensive six-month business plan to promote and
develop the UVEST Program for the Subscriber. Thereafter, UVEST and Subscriber
shall meet approximately every six months to review the performance of the
business plan for the prior six months and to develop a new business plan for
the succeeding six months.
17. Vendor Relationships. In addition to being solely responsible for the
investment research regarding Securities, UVEST shall be solely. responsible for
all contracts and discussions with all vendors of Securities regarding the
quality or investment characteristics of such Securities, their availability and
all other matters related to such Securities, and UVEST shall be solely
responsible for all other aspects of the relationship between such vendors and
the UVEST Program.
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18. Bankruptcy, Changes in Control, Etc. Any party hereto (the "defaulting
party") shall give the other party hereto prompt written notice in the event
that such defaulting party (i) liquidates or dissolves; (ii) makes an assignment
for the benefit of creditors, becomes insolvent or is unable to pay its debts as
they mature, files a voluntary petition in bankruptcy or a petition, answer or
consent seeking reorganization or readjustment of its indebtedness under
applicable bankruptcy or insolvency laws, consents to the appointment of a
receiver or trustee for all or a substantial part of its property or takes
corporate or other action for the purpose of effecting any of the foregoing;
(iii) has filed against it a petition for proceedings in bankruptcy or for its
reorganization or for the readjustment of its indebtedness under applicable
bankruptcy or insolvency laws or has a receiver or trustee appointed for it or
for all or a substantial part of its property; or (iv) experiences a change in
control through merger, consolidation or reorganization in a transaction in
which such party is not the surviving entity, a sale of substantially all of its
assets or, to the extent known by such defaulting party, the acquisition by any
person or related group of 25% or more of its outstanding equity interest. The
non-defaulting party shall have the right to terminate this Agreement upon the
happening of any such event.
19. Term. This Agreement shall have an initial term of two (2) years and
shall automatically renew for subsequent terms of one (1) year, subject to
termination as provided in Section 20 hereof.
20. Arbitration; Termination; Suspension.
(a) UVEST and Subscriber shall work together in good faith to resolve
any dispute arising between them. If UVEST and Subscriber cannot resolve
such dispute after a good faith attempt to do so, either party may submit
such dispute to arbitration in Charlotte, North Carolina, such arbitration
to be conducted in accordance with the Commercial Arbitration Rules of the
National Association of Securities Dealers. The arbitration award shall be
final and binding. Judgment upon the award rendered may be entered in any
court having jurisdiction over the party against which the award is
rendered. Nothing in this Section 20(a) shall prevent UVEST or Subscriber
from exercising any other rights which they have pursuant to this Section
20 or otherwise pursuant to this Agreement in connection with such a
dispute; provided, however, that once a dispute has been submitted to
arbitration, neither party shall pursue a remedy with respect to such
dispute unless such remedy is specifically delineated herein.
(b) Either party may terminate this Agreement as of the end of the
initial term or subsequent terms by giving notice to the other party at
least 90 days prior to the end of the initial term or subsequent terms.
(c) UVEST may immediately suspend performance under this Agreement,
and may thereafter terminate this Agreement pursuant to the procedures set
forth in this Section 20(c), in the event of a material breach by
Subscriber in the performance of any material agreement made by Subscriber
under this Agreement, including, without limitation, any failure of
Subscriber to comply in any material respect with any of the manuals
identified in Section 12 hereof. UVEST shall promptly notify Subscriber of
the grounds for any such suspension. Subscriber shall have 30 days
following such notice to resolve the matter(s) specified therein to UVEST's
satisfaction prior to any termination of the Agreement. If
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Subscriber fails to resolve any such matters) within the prescribed time
and UVEST does not agree in writing to extend the period for resolution of
any such matter(s), UVEST may terminate this Agreement upon the expiration
of such 30-day period. In addition, UVEST may terminate this Agreement upon
notice to Subscriber if Subscriber directly or indirectly offers or makes
available Securities brokerage or broker-dealer services or Securities
investment advisory products or services.
(d) Subscriber may terminate this Agreement pursuant to the procedures
set forth in this Section 20(d), in the event of a material breach by UVEST
in the performance of any material agreement made by UVEST under this
Agreement. Subscriber shall promptly notify UVEST of the grounds for any
such termination. UVEST shall have 30 days following such notice to cure
the breach specified herein. If UVEST fails to cure any such breach within
such 30-day period and Subscriber does not agree in writing to extend the
period for cure of such breach or UVEST does cure such breach but the same
breach occurs within 90 days from the original breach, Subscriber may
terminate this Agreement upon the expiration of such 30-day period or upon
the occurrence of such second breach. Subscriber shall have the additional
rights to terminate this Agreement provided in Section 7(a) hereof.
(e) Certain federal and state regulatory authorities may require the
termination of this Agreement on behalf of UVEST or Subscriber. In the
event of such a termination, whether made on behalf of UVEST or Subscriber,
(i) neither party hereto shall have any liability to the other for such
termination except to the extent such termination results from the failure
of one party to satisfy its obligations hereunder, in which case such
failing party shall be liable to the other party to the extent it otherwise
would have been liable for such failure, and (ii) certain provisions of
this Agreement, as specified in Section 25 hereof, shall survive such
termination as provided herein.
(f) In the event that UVEST or Subscriber terminates this Agreement or
a governmental authority requires the termination of this Agreement, (i)
Subscriber shall immediately cease representing itself as a participant in
the UVEST Program, discontinue use of all UVEST materials and all materials
bearing the UVEST logo, service mark or trademark; and (ii) Subscriber
shall return to UVEST all records relating to UVEST's brokerage accounts,
all UVEST procedures and compliance manuals and all UVEST forms and
documents and shall so certify in writing to UVEST within ten days of the
date of termination.
(g) Upon the termination of this Agreement by either UVEST, Subscriber
or any governmental authority, neither UVEST nor Subscriber shall interfere
with the decision of any customer or Dual Employee regarding his brokerage
accounts or employment, respectively. Subscriber acknowledges that UVEST
shall not be deemed to be interfering with any customer as a result of
UVEST performing its obligations or sending customary notices with respect
to any customer or any such customer's accounts.
Nothing in this Section 20(g) shall prohibit Subscriber or UVEST from
engaging in their customary marketing activities or resolving existing
disputes with customers.
(h) Nothing in this Agreement shall be deemed or construed to create a
partnership or joint venture between the Subscriber and UVEST. The
relationship between such parties is only contractual in nature.
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(i) Upon Subscribers request, UVEST shall provide the Subscriber a
current list of the Subscriber's customers who have become customers of
UVEST under the UVEST program. Upon termination of this Agreement, except
for Section 20(c), UVEST agrees to cooperate in the transfer of records
relating to customer accounts to the Subscriber or a broker/dealer
designated by the Subscriber. After termination of this Agreement, UVEST
shall not provide information with respect to such accounts to any other
broker dealer or financial institution nor shall information with respect
to such accounts be used by UVEST after such transfer
21. UVEST Trademark; No License or Right to Use. Subscriber recognizes and
acknowledges that UVEST is a registered service mark and a registered trademark
of UVEST. Subscriber is not granted a license or right to use UVEST's UVEST
service mark or trademark. Subscriber shall not use the UVEST service mark or
trademark in any manner whatsoever without the prior written consent of UVEST
and any use of the UVEST service mark or trademark by Subscriber pursuant to
such written consent shall comply in all respects with the terms thereof.
22. Additional Representations and Warranties of Subscriber. Subscriber
represents and warrants to UVEST that (i) Subscriber has full legal right, power
and authority to enter into and perform this Agreement; (ii) this Agreement has
been duly authorized, executed and delivered by Subscriber and constitutes the
legal, valid and binding agreement of Subscriber; and (iii) no consent,
approval, authorization or order of any governmental agency or authority, except
(A) those previously obtained by Subscriber, disclosed to UVEST and in full
force and effect, and (B) those which have been disclosed to UVEST in writing
and are to be obtained by Subscriber, is required in connection with the
transactions contemplated by this Agreement on the part of Subscriber.
Subscriber agrees to use its best efforts to obtain all consents, approvals,
authorizations and orders necessary in connection with its performance under
this Agreement which have not been obtained as of the date hereof. Subscriber
agrees that once all of such consents, approvals, authorizations and orders have
been obtained, it will certify such fact to UVEST in writing. Subscriber further
acknowledges that UVEST shall not perform its obligations pursuant hereto until
it receives such certification. Subscriber further represents and warrants that,
to the extent permitted by law, it shall use its best efforts, upon request by
UVEST, to verify any information or representations in the possession of
Subscriber made by one of its depositors or customers, or any other potential
customer of UVEST, contained or set forth in an Application for Account or any
other questionnaire submitted by such potential customer to UVEST in conjunction
with the opening or attempted opening of an account with UVEST. Subscriber
further represents that, except as may otherwise be required by law, it shall
keep confidential all information not generally available to the public which it
may acquire as a result of this Agreement regarding the business or affairs of
UVEST, or any of its affiliates, and further acknowledges that this covenant
shall survive the termination of this Agreement until such information shall
become generally available to the public.
23. Representations and Warranties of UVEST. UVEST represents and warrants
to Subscriber that (i) UVEST has full legal right, power and authority to enter
into and perform this Agreement; (ii) this Agreement has been duly authorized,
executed and delivered by UVEST and constitutes the legal, valid and binding
agreement of UVEST; (iii) UVEST has obtained all consents, approvals,
authorizations and orders of governmental agencies or authorities required in
connection with the transactions contemplated by this Agreement
15
on the part of UVEST; including, without limitation, receipt from the Securities
and Exchange Commission of a "no-action letter," dated November 24, 1992, which
("no-action letter") has not been modified or rescinded as of the date hereof;
(iv) UVEST is registered as a broker-dealer and an investment advisor under
federal and state securities laws and is a member of the NASD and, during the
term of this Agreement, UVEST will maintain such registrations and membership as
required by applicable law. UVEST further represents that, except as may
otherwise be required by law, it shall keep confidential all information not
generally available to the public which it may acquire as a result of this
Agreement regarding the business or affairs of Subscriber, or any of its
affiliates, and further acknowledges that this covenant shall survive the
termination of this Agreement until such information shall become generally
available to the public.
24. Notices. All notices, requests, approvals, consents or other
communications required or permitted to be delivered hereunder shall be in
writing, delivered personally or forwarded by certified mail, postage prepaid,
to the address set forth on the signature page hereof and shall be deemed duly
given when so personally delivered or three business days after the date of
deposit in a mail box or other U.S. Postal Service depository outside the
control of the sender. Either party may from time to time designate in writing
any other address to which such notices, requests and other communications shall
be sent. Until any such change, such notices, requests and other communications
shall be sent to the address of the appropriate party as set forth on the final
page of this Agreement.
25. Compliance with Securities Regulations. Notwithstanding any provision
contained in this Agreement to the contrary, UVEST shall cause all aspects of
the UVEST Program (including, without limitation, designation of the UVEST
Centers in Subscriber's locations, training and compensation of Dual Employees
and Non-Dual Employee, manner and content of disclosures to customers and
advertising and promotional activities) to be conducted in accordance and
conformity with the Interagency Statement on Retail Sales of Non-deposit
Investment Products, dated February 15, 1994, published by the Board of
Governors of the Federal Reserve System, the Office of the Comptroller of the
Currency, the Federal Deposit Insurance Corporation, the Office of Thrift
Supervisions, as such statement has been and hereafter may be amended from time
to time (the "Interagency Statement"). In addition to the Interagency Statement,
UVEST adheres to the 1999 Gramm Leach Bliley Act, Title II, Section 201, and all
applicable securities laws (NASD, SEC, Etc.). In accordance with their
responsibilities under Interagency Statement and various other laws, rules,
regulations and policies of their respective regulatory agencies as in effect
from time to time, Subscriber and its affiliate depository institutions on whose
premises the activities contemplated by this Agreement are conducted may from
time to time review the sales and other activities of the Dual Employees and the
other operations of the WEST Centers to confirm that such activities and
operations are being conducted in a manner consistent with-such Interagency
Statement and any such laws, rules, regulations and policies, and in connection
therewith to review such records of UVEST as the Subscriber or such affiliate
deems necessary or appropriate to evaluate such compliance. Any such review or
investigation shall not relieve UVEST from its obligations hereunder to operate
all aspects of the UVEST Program in accordance with such Interagency Statement
and any such additional laws, rules, regulations and policies.
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26. Privacy Policy.
As a policy, UVEST does not sell, share or otherwise provide account
holder's personal information to any nonaffiliated third party entity, with the
exception of our clearing firm. Unless otherwise instructed in writing by a
customer, UVEST's Privacy Policy does allow sharing of referred account
information with Subscriber.
27. Miscellaneous.
(a) This Agreement and the materials incorporated herein by reference
constitute the entire understanding of the parties with respect to its subject
matter. Neither party may assign this Agreement (either voluntarily or by
operation of law) without the prior written consent of the other party, except
that UVEST, or Subscriber to the extent permitted by applicable law, may assign
its rights under this Agreement to a subsidiary or affiliate. This Agreement
shall be binding upon, inure to the benefit of, and be enforceable by and
against, the successors and permitted assigns of each of the parties, subject
only to the rights of federal and state regulatory authorities to terminate this
Agreement under certain circumstances. This agreement and all provisions hereof
are for the sole and exclusive benefit of the parties hereto and, in the case of
Subscriber, any subsidiary or affiliate depository institutions on whose
premises the activities contemplated hereby may be conducted. Nothing expressed
or referred to in this Agreement will be construed to give any other person any
legal or equitable right, remedy or claim under or with respect to this
Agreement or any provision hereof.
(b) Subscriber recognizes and acknowledges that failure by Subscriber to
comply with the provisions of this Agreement regarding permitted use by
Subscriber of the UVEST logo, service mark and trademark, UVEST equipment,
signs, materials, furnishings and supplies and items bearing the UVEST logo,
service mark or trademark may result in damage to UVEST for which monetary
compensation would be inadequate. Subscriber therefore agrees that UVEST shall
be entitled to specific performance of Subscriber's obligations pursuant to such
provisions.
(c) Neither party shall be liable to the other for special, indirect or
consequential damages (including lost revenues or lost profits) arising out of
any breach of its obligations under this Agreement other than the parties'
respective obligations to indemnify each other pursuant to Section 9 hereof.
(d) Except to the extent specified in Section 20(a) hereof, the enumeration
herein of specific remedies shall not be exclusive of any other remedies and no
single, partial or other exercise of any such right, power, remedy or privilege
shall preclude the further exercise thereof or the exercise of any other right,
power, remedy or privilege. Any delay or failure by any party to this Agreement
to exercise any right, power, remedy or privilege herein contained, or now or
hereafter existing under any applicable statute or law, shall not be construed
to be a waiver of such right, power, remedy or privilege or to limit the
exercise of such right, power, remedy or privilege.
(e) Neither Subscriber nor UVEST shall hold itself out as an agent of the
other or any of the subsidiaries or the companies controlled directly or
indirectly by or affiliated with the other.
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(f) This Agreement may be modified only by a writing signed by both parties
to this Agreement. Such modification shall not be deemed a cancellation of this
Agreement.
(g) In the event that any court of competent jurisdiction declares invalid
any provision of this Agreement, such invalidity shall have no effect on the
other provisions hereof, which shall remain valid and binding and in full force
and effect, and to that end the provisions of this Agreement shall be considered
severable; provided, however, that should any court of competent jurisdiction
declare invalid any material provision of this Agreement, severance of which
would frustrate the purpose of this Agreement, such provision shall not be
severable, and this Agreement shall be voidable by either party hereto.
(h) UVEST shall have each customer acknowledge in writing the receipt of
notice that (i) UVEST, and not Subscriber, is providing and is responsible for
the brokerage services being offered and (ii) UVEST is not affiliated with
Subscriber. Such notice and acknowledgment may be a part of the customer's
application for an account with UVEST.
(i) Subscriber, at a time mutually acceptable to Subscriber and UVEST, may
inspect those records of UVEST pertaining to commissions and other revenue
generated by the UVEST Centers in locations of Subscriber or its affiliates.
(j) All such signs bearing the UVEST logo, service mark or trademark shall
remain the property of UVEST and shall be used by Subscriber's locations only in
connection with the UVEST Program and the business conducted at the UVEST
Centers.
(k) This Agreement has been accepted by UVEST in, and shall be construed in
accordance with the statutory and common laws of, the State of North Carolina,
except to the extent such laws may be preempted by federal laws, rules or
regulations.
(l) The headings preceding the text, articles and sections hereof have been
inserted for convenience and reference only and shall not be construed to affect
the meaning, constriction or effect of this Agreement.
(m) The provisions of Sections 9, 15 (to the extent such costs are incurred
prior to termination), 22 and 23 (to the extent such Sections relate
to confidentiality concerning UVEST's or Subscriber's business), and 20(g),
27(b) and (c) hereof shall survive the termination of this Agreement.
(n) This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument. It shall
not be necessary to make proof of but one such counterpart in any court of law
having jurisdiction with regard to this Agreement or any dispute arising
pursuant hereto.
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IN WITNESS WHEREOF, UVEST and Subscriber have executed this Agreement as of the
date set forth above.
UVEST FINANCIAL SERVICES GROUP, INC.
By /s/ Dan Arnold
-----------------------------------
Dan Arnold
President & COO
Address of UVEST for notices hereunder:
UVEST Financial Services Group, Inc.
128 S. Tryon Street, Suite 1340
Charlotte, NC 28202
Attention: Craig Karnis
UNITED BANK OF PHILADELPHIA
By /s/ Evelyn F. Smalls
-----------------------------------
Evelyn F. Smalls
President CEO
Address of Subscriber for notices hereunder:
United Bank of Philadelphia
300 North Third Street
Philadelphia, PA 19106-1101.
Attention: Evelyn F. Smalls
UVEST FINANCIAL SERVICES GROUP, INC.
Brokerage Services Agreement
SCHEDULE 1
Revenue Sharing Payments
Subscriber shall be entitled to the following percentages) of gross
commissions generated by the purchase or sale of insurance, mutual funds,
annuities, stocks and bonds through registered representatives located in UVEST
Centers in Subscriber's branches:
Percentage of gross commissions
For monthly gross commissions of payable to Subscriber
-------------------------------- ---------------------
$20,000 or less 77.5%
$20,001 and above 80%
Clearing Charges of $20 per transaction will be deducted from Subscriber's
revenue sharing payment for mutual funds, equities, insurance and variable
annuities on a monthly basis in accordance with the terms in Section 7(b) of
this Agreement.
Clearing Charges of $30 per transaction will be deducted from Subscriber's
revenue sharing payment on a monthly basis for bonds in accordance with the
terms in Section 7(b) of this Agreement.
UVEST's Discount and Internet Brokerage Service
Payout to Subscriber:
---------------------
For the purchase or sale of Securities 20% of gross commissions
utilizing the discount brokerage service,
discount commission schedule via the telephone
For the purchase or sale of Securities $1.00 per trade
utilizing the internet brokerage service
There are no clearing charges deducted from Subscriber's revenue sharing
payment on a monthly basis in accordance with the terms in Section 7(b) of this
Agreement.
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