Enterprise
Master Agreement
Finalis Consulting LLC, a Delaware limited liability company (“Finalis”), has been requested to issue this Master Agreement (together with the Order Form and the Enterprise Terms and Conditions, this “Contract” or “Agreement”) for the provision of the Services set forth herein to you (on behalf of itself and each of its Registered Representatives (as defined below), “you”, “your” or the “Client”, and together with Finalis, the “Parties”), a broker-dealer duly registered with the Financial Industry Regulatory Authority, Inc. (“FINRA”), and each of Client’s Registered Representatives that become a party hereto pursuant to a Joinder (as defined below). Terms used but defined in the annexes attached hereto shall have the respective meanings given to them in such annexes.
1. Services
1.1 Scope of Services. Performance. The purpose of the Services is to assist Client with compliance with applicable FINRA rules. Client hereby engages Finalis to perform certain compliance services set forth on Annex B attached hereto and such other services as agreed to by the Parties in writing from time to time (collectively, the “Services”). The Parties acknowledge and agree that Finalis’ role in providing the Services, including the activities of any Outsourced Persons, is strictly limited to assisting Client in fulfilling its compliance and supervisory obligations under applicable federal and state securities laws and FINRA rules. The Services are consultative and administrative in nature and shall not include the assumption of any non-delegable supervisory or compliance obligations of Client. “Outsourced Persons” means personnel engaged or subcontracted by Finalis to perform the Services. No affiliate of Finalis, including any affiliate registered as a broker-dealer or investment adviser, is a party to or has obligations under this Agreement. For clarity, Finalis does not and will not (a) act as the Client’s ‘chief compliance officer’ or designated principal unless separately agreed in a signed addendum; (b) assume any non-delegable supervisory or compliance obligations; or (c) exercise ultimate decision-making authority. Client retains sole and ultimate responsibility for its supervisory system and regulatory compliance. Notwithstanding anything to the contrary in this Agreement, the Parties acknowledge and agree that all services performed by Finalis and any Outsourced Persons are limited to administrative, technical, analytical, monitoring, testing, facilitation, and advisory support functions. Finalis does not exercise, and shall not be deemed to exercise, supervisory authority, principal authority, or final regulatory decision-making authority under FINRA Rule 3110 or otherwise. Client retains exclusive responsibility for supervisory judgments, regulatory approvals, certifications, escalations, and compliance determinations, including ultimate responsibility for the adequacy and effectiveness of its supervisory system.
For the avoidance of doubt, Finalis’ role is limited to providing compliance and supervisory support services in a consultative capacity. Accordingly, as applicable, Client and Registered Representative will have and shall retain the ultimate responsibility for supervision and for compliance with applicable rules, regulations and laws, and Client shall indemnify and hold Finalis harmless for any damages resulting from Client’s or a Registered Representative’s violation of such rules, regulations or laws.
Finalis shall ensure that Outsourced Persons use commercially reasonable efforts to meet any performance deadlines, but any such deadlines shall be estimates only and time shall not be of the essence for performance of the Services, and if an Outsourced Person is unable to meet such performance deadlines it shall promptly provide notice to Client of the same and provide a reasonable estimate of when the applicable Services may be rendered. Client shall promptly respond to Outsourced Persons’ communications and understands that a delayed response may affect the performance of the Services and the ability to meet performance deadlines or estimate of when applicable Services may be rendered.
1.2 Registered Representatives. Client will have individuals serving as registered representatives of Client’s broker-dealer pursuant to a Form U4 filed with FINRA and successful completion of applicable FINRA qualification exams (each, a “Registered Representative”) and such Registered Representatives shall be engaged solely in the business of effecting transactions in securities (“Transactions”) for the accounts of others in the context of private placements under the Securities Act of 1933, as amended (the “Securities Act”), or mergers and acquisitions advisory services or any other services where such Registered Representatives receive transaction-related compensation (collectively, “Representative Services”) as registered representatives of Client's broker-dealer. Unless otherwise agreed between the Parties in writing and consistent with applicable laws, rules and regulations, all Transactions and Representative Services shall (a) occur in the United States and (b) be performed on behalf of, and directed to, U.S. Persons (as such term is defined under the Securities Act).
1.3 Approval of Registered Representatives. Notwithstanding anything to the contrary herein or in any other agreement to which the Client is or intends to be a party to, Client acknowledges and agrees and covenants with Finalis that, so long as an Outsourced Person or other employee or agent of Finalis shall provide services to Client and/or be registered with FINRA on behalf of Client or in connection with any Services, no individual may act as a Registered Representative without Finalis’ prior written consent (which shall not be unreasonably withheld, conditioned or delayed). Finalis may, in its reasonable discretion exercised in good faith and consistent with applicable regulatory obligations, reject any potential Registered Representative of Client based upon any (a) findings from background checks (e.g., liens, bankruptcies, civil judgments, criminal activities, regulatory agency findings, questionable business practices, etc.), (b) civil judgments or criminal record, (c) action potentially leading to a disqualification, or (d) any other circumstance that, in Finalis’ sole discretion, would materially adversely affect the potential Registered Representative’s relationship with Finalis or Client. Finalis may decline or suspend provision of Services for any individual where, acting reasonably and in good faith, Finalis determines that providing Services would create material regulatory or operational risk. Client will not require Finalis to provide Services with respect to such individuals. This paragraph shall survive the termination or expiration of this Agreement. Client shall indemnify and hold Finalis harmless for any damages from Client’s violation of this paragraph.
1.4 Supervision and Compliance. Each Registered Representative, in consultation with Client and the Outsourced Persons, will determine the method, details and means of performing the Representative Services, subject to the supervisory controls of the Outsourced Persons. The Outsourced Persons will support Client’s supervisory framework by performing monitoring, testing, and administrative functions under Client’s written supervisory procedures (WSPs). Outsourced Persons shall not exercise or assume principal or supervisory authority under FINRA Rule 3110. The Client acknowledges and agrees that it retains ultimate supervisory responsibility over Client’s broker-dealer.
1.5 Cooperation; Use of Technology. At all times Client and each Registered Representative shall comply with the WSPs and cooperate with such supervision and control by the Outsourced Persons, provided that such supervision shall not relieve Client of its ultimate supervisory authority or responsibility under applicable FINRA and SEC rules. Client will be truthful and cooperative with Finalis and will keep Finalis informed of material developments affecting the matter of this Agreement, including receipt of any notices or documents relating to compliance and or regulatory matters. For purposes of Outsourced Persons’ provision of the Services, the Client and Registered Representatives acknowledge and agree and covenant with Finalis to use the technology and software provided by Finalis or its affiliate to conduct the Transactions and Representative Services and record all communications among Finalis, Client and the Registered Representatives. Finalis is granted a perpetual, irrevocable, worldwide royalty-free, non-exclusive, sublicensable right and license to process and exploit client data, information and records to provide the Services. Finalis may retain copies as required by law or in accordance with its retention policy. Finalis may use such data in anonymized or aggregated form to improve its products and services and shall not be deemed a fiduciary with respect to Client data.
1.6 Reliance on Instructions. Finalis may assume that any instruction, notice or request (however communicated to Finalis in writing) is properly authorized by the Client or Registered Representative, as applicable, if it was given by a person who is or purports to be a director, employee, or authorized agent of the Client or Registered Representative, as applicable, and Client and Registered Representative, as applicable, shall indemnify and hold Finalis harmless for any damages resulting from Finalis’ response to such instruction, notice or request.
1.7 Relationship of the Parties; Non-Exclusivity; Additional Services. Client’s agreement for the provision of the Outsourced Persons is with Finalis and not any individual Outsourced Person. The Outsourced Persons shall provide the Services as only set forth by Finalis and not Client and shall not be required to work at Client’s premises or another location identified by Client. Nothing herein shall relieve Client of its ultimate supervisory responsibility or imply that Finalis or any Outsourced Person is acting as Client’s agent or principal. Client acknowledges and agrees that all Services under this Agreement are provided by Finalis, and not by any individual acting as an Outsourced Person in their personal capacity. The Outsourced Person shall act solely as a representative of Finalis in the performance of the Services, and Client shall have no right of action, claim, or recourse against the Outsourced Person in connection with this Agreement or the Services provided hereunder. Nothing in this Agreement shall be understood to hinder or prohibit Finalis or the Outsourced Persons from providing the Services or other services or functions to other clients of Finalis or other persons. Finalis may provide additional services to Client outside the scope of this Agreement as agreed in writing with Client for additional fees to be mutually agreed.
2. Fees and Expenses
2.1 Fees. In exchange for the Services, Client shall pay Finalis the amount set forth in the Order Form, regardless of whether the Services are suspended or not hereunder, until the effective date of the termination of this Agreement in accordance with Section 5. It is understood and agreed that, subject to Finalis providing at least 30 days prior written notice to Client, any fees may be modified or revised by Finalis to recognize increased costs to Finalis to provide the Services. All amounts payable to Finalis hereunder shall be made in lawful currency of the United States in accordance with the wire instructions of Finalis provided by Finalis in writing, and you shall provide contemporaneous written notice to Finalis of each such payment to Finalis.
2.2 Invoices. Finalis shall submit invoices to Client for its fees and expenses hereunder. Client shall remit full payment for fees or expenses within 14 days of receipt of an invoice from Finalis. Where invoices remain unpaid beyond this period, Finalis reserves the right to suspend Services pending payment of unpaid invoices. All invoices shall be issued by Finalis, and Finalis may designate an affiliate solely as a payment agent; such designation shall not create any obligation of that affiliate to provide Services or assume liability hereunder.
2.3 Expenses. Client shall be responsible for any and all expenses in connection with the operation of Client’s broker-dealer to include any and all expenses required to operate in accordance with applicable law, rule and regulation and the Client’s WSPs. In addition to the other fees described herein, you shall reimburse Finalis for its reasonable expenses incurred from time to time in connection with the Services.
2.4 Taxes; Withholdings. All amounts due under the Contract shall be paid in full without any set-off, counterclaim, deduction or withholding (other than any deduction or withholding of tax as required by law) and shall be exclusive of any taxes or governmental charges (collectively, “Tax”). If you are required to deduct or withhold any Tax, or if any Tax is required to be paid by Finalis on account of the Services rendered, you shall pay Finalis such additional amounts as required so that the net amount received by Finalis from you after such deduction, withholding or payment equals the amounts otherwise due to Finalis under this Agreement. If any Tax is payable in respect of fees paid or payable to Finalis for Services rendered, Finalis will add such Tax to its invoices, and you shall pay Finalis such Tax as set forth therein. You agree to promptly provide Finalis with all materials necessary for Finalis to ascertain and timely collect its fees hereunder. Client agrees, as applicable, that all fee payments shall be made to Finalis through authorized automatic recurring payments made by credit card, debit card and bank account withdrawals from Client’s (or its designee’s) payment instructions provided to Finalis. Client represents and warrants that such payment instructions are true and correct. Client shall promptly update any change in billing information. Client agrees that Finalis may employ third-party vendors (e.g., Stripe or Plaid) for the payment of fees, and Finalis may provide such third-party vendors information provided by Client to Finalis to process such payments. There are no fees contemplated to be paid by Finalis or any Outsourced Person to Client or a third party under or in relation to this Agreement. Without prejudice to any other rights or remedies that Finalis may have pursuant to any statutory provision in force, Finalis may exercise its statutory right to claim compensation for late payment or debt recovery costs if Finalis is not paid in accordance with the Contract.
3. Client Obligations
(a) Cooperate with Finalis in all matters relating to the Services; (b) Provide to Finalis (or procure the timely provision of) facts, matters and information concerning its business or affairs and access to materials and information to enable Finalis to provide the Services; (c) In circumstances where the Client has any doubt whether any facts, matters or information are relevant to enable Finalis to provide the Services, promptly disclose such facts, matters or information to Finalis so that Finalis can determine whether they are relevant; (d) Ensure that any facts, matters, and information supplied to Finalis by Client or a Registered Representative and by any third parties at Client’s request, including statements of opinion, are true, fair, accurate and not misleading and do not omit any material facts, matters or information, and if anything occurs to render such facts, matters or information materially untrue, unfair, or misleading, the Client shall promptly notify Finalis in writing; (e) Promptly and without charge, provide all reasonable assistance required by Finalis to enable Finalis to carry out the Services in accordance with this Contract and applicable rules, laws and regulations; (f) Keep all materials, equipment, documents, and other property of Finalis in safe custody at its own risk and not dispose of or use them other than in accordance with Finalis’ written instructions or authorization; (g) Remain in good standing and maintain appropriate licensure as required by applicable regulatory authorities and inform Finalis promptly of any event that precludes Client or Finalis from fulfilling its obligations under this Agreement; (h) Notify Finalis promptly in writing of any order, enforcement action or other formal notice that would affect Finalis’ ability to offer, or Client’s right or ability to receive, the Services; (i) Communicate relevant Client, Finalis and FINRA policies and procedures, laws, regulations and other guidance to Registered Representative verbally and in writing; (j) Provide compliance support and supervisory review, receipt and payment of Commissions (as defined below), and any other support that is reasonably required by Registered Representatives to provide the Representative Services and by Finalis to fulfill its obligations hereunder; (k) Respond promptly to Finalis’ reasonable requests for information, review or approval of documentation related to Transactions and the Representative Services; (l) Act in accordance with Client’s representations and obligations in engagement letters with Client’s clients; (m) Provide for fidelity bond insurance coverage for Registered Representatives and the Transactions that are processed through Client in accordance with and subject to the terms and conditions in Client’s fidelity bond insurance policy and in coverage amounts required by applicable rules, regulations and law; (n) If Finalis’ performance of any of its obligations under the Contract is prevented or delayed by any act or omission by the Client or failure by the Client to perform any relevant obligation (“Client Default”): (i)without limiting or affecting any other right or remedy available to it, Finalis shall have the right to suspend performance of the Services until the Client remedies the Client Default, and to rely on the Client Default to relieve it from the performance of any of its obligations in each case to the extent the Client Default prevents or delays Finalis’ performance of any of the Services; (ii) Finalis shall not be liable for any costs or losses sustained or incurred by the Client Default. Client shall not have any authority to bind Finalis to include to any agreement or any third party, or to make representations, warranties or agreements of any kind on behalf of Finalis. Finalis has no obligation to enter into any agreement and reserves the right to deny working with any organization at its sole discretion. If Finalis is required to enter into any agreement in connection with the services provided hereunder, such agreement shall be reasonably acceptable to Finalis.
4. Registered Representative Obligations
As applicable, Client and each Registered Representative shall: (a) comply with all FINRA, SEC, state, and U.S. federal (and, to the extent applicable, non-U.S.) laws, rules and regulations, which obligation is not subject to any of Finalis’ obligations hereunder; (b) take all actions reasonably required by, as applicable, Outsourced Persons and Client in their exercise of supervisory and regulatory responsibility over each Registered Representative, including, without limitation, compliance with all procedures set forth in the WSPs or communicated to Registered Representative in writing by Outsourced Persons and Client; (c) obtain appropriate licensure in advance of conducting the Representative Services, consult with Finalis and Client regarding any change in proposed Representative Services that might require different licenses, and inform Finalis and Client promptly of any events that may require additional licensure, all in a manner consistent with Section 4(a) hereof; (d) keep such records as are required by Finalis, Client and FINRA rules and regulations, including a current Form U4; (e) obtain an Outsourced Person’s and Client’s written pre-approval (which shall not be unreasonably withheld, conditioned or delayed) for clients, deals, Representative Services, Transactions, finder’s agreements, fee sharing agreements, and related documentation to include marketing materials that involve the Registered Representative effecting transactions in securities; (f) refrain from engaging in any transactions involving Commissions that are not run as deals through Client or pre-approved by the Outsourced Persons as Private Securities Transactions (as defined below) in compliance with the terms hereof; (g) communicate with relevant parties regarding Finalis’ and Client’s customer identification program and assist in the collection of required data from relevant parties; (h) review progress with and permit the inspection of all work accomplished or in progress in connection with any business relationship as required by Finalis and Client; (i) immediately notify Finalis and Client in writing upon the occurrence of any event or condition that would make Registered Representative ineligible to receive Commissions, and cease all activity until such time as Finalis and Client determine to be appropriate; (j) immediately inform Finalis and Client in writing upon receipt of a written or oral complaint involving Registered Representative’s activities, provide copies of such complaints and cooperate with any investigation Finalis and Client conduct; and (k) ensure that any indemnification that Registered Representative receives pursuant to any engagement or other agreement with a client includes Finalis and Client as indemnified parties in no less than equal measure as Registered Representative.
“Commissions” means any compensation paid directly or indirectly to Client on behalf of a Registered Representative from whatever source in connection with, or as a result of, the purchase or sale of a security, including, but not limited to: (i) Transaction-related cash and non-cash compensation, whether fixed or a percentage of a Transaction; (ii) finder’s fees; (iii) securities or rights to acquire securities; or (iv) rights of participation in profits, tax benefits, or dissolution proceeds, as a partner or member of an entity or otherwise. Commissions shall not include retainer fees (“Retainers”) paid to Registered Representative not in connection with the consummation of a Transaction.
Registered Representative must submit to Finalis and Client a written notice describing all business activity outside the scope of the relationship with Client, as such conduct is described in FINRA Rule 3270 (“Outside Business Activities”) and FINRA Rule 3280 (“Private Securities Transactions”), for Finalis’ and Client’s assessment. Each such notice must comply with applicable FINRA rules and regulations and the WSPs. Registered Representative will not participate in any Outside Business Activities, directly or indirectly, without first providing such written notice to Finalis and Client. Registered Representative shall promptly submit to Finalis and Client written notices describing all Private Securities Transactions for Finalis’ and Client’s assessment. Each such notice must comply with applicable FINRA rules and regulations and the WSPs. Registered Representative will not participate in any Private Securities Transaction, directly or indirectly, without Finalis’ and Client’s prior written approval. Registered Representative acknowledges and agrees that Finalis and Client will supervise Registered Representative’s participation in the Transaction as if the Transaction were executed on behalf of Client. Nothing in this Agreement shall prevent Finalis from complying with the professional or ethical rules of any relevant professional body of which it may be or may become a member.
5. Joinder of Registered Representatives
So long as the Cap is not exceeded, each Registered Representative of Client shall become a party to this Agreement (each, a “Joinder”) pursuant to a Joinder Agreement satisfactory to Finalis.
6. Insurance
Client shall maintain, at its own cost, a comprehensive policy of insurance (including, but not limited to, third-party employer's, public liability and professional indemnity insurances) to cover its liability, to include as required by any Authority, for any act or Client Default for which Client or a Registered Representative may become liable to indemnify Finalis and any Outsourced Person. Client shall maintain, at minimum, professional liability/errors & omissions, cyber liability, and fidelity bond coverage in commercially reasonable amounts and as required by FINRA/SEC rules. Upon request, Client will furnish certificates of insurance naming Finalis as additional insured where commercially available. Client shall provide details of such insurance policy to Finalis and for review by Finalis’ insurance advisor on request by Finalis at any time. Client shall promptly notify Finalis if coverage under its insurance policies shall lapse or not be renewed or be changed in any material way, or if Client is aware of any reason why the coverage under its insurance policies may lapse or not be renewed or be changed in any material way.
7. Term
The term of this Agreement commences the last date of the signatures hereof and shall remain in effect for an initial period consisting of 12 months thereafter and shall automatically renew for consecutive terms of 12 months each unless earlier terminated as provided herein (the “Term”).
8. Limitation of Liability; Compliance Covenant
To the maximum extent permitted by law, Finalis’ aggregate liability arising out of or relating to this Agreement shall not exceed the total fees paid by Client to Finalis in the twelve (12) months preceding the event giving rise to the claim. In no event shall Finalis be liable for any indirect, incidental, consequential, special, punitive or exemplary damages, including lost profits or regulatory fines imposed on Client or any Registered Representative. Nothing herein limits liability for fraud or willful misconduct.
Finalis represents and covenants that, in performing the Services, it shall use commercially reasonable efforts to comply with Applicable Law and applicable FINRA rules solely as they apply to Finalis in its capacity as a service provider and not as a broker-dealer or supervisor. For the avoidance of doubt, Finalis makes no representation regarding Client’s compliance obligations and does not assume any non-delegable regulatory duties of Client.
9. General Provisions
Client agrees to the provisions set forth on those certain “Enterprise Terms and Conditions” located at https://www.finalis.com/enterprisetermsandconditions, and the terms thereof are incorporated by reference as though fully set forth herein and shall survive any termination, expiration or completion of this Agreement. Sections 2, 3, 6, 7 and 9 thereof shall survive the termination hereof.