These provisions are a part of and are incorporated into those certain MasterServices Agreements (each, the “MSA”) that reference these provisions. Capitalized terms used herein without definition shall have the meanings ascribed to them in the MSA. Service Provider reserves the right to amend these provisions without notice to the extent permitted by applicable law.
1. Independent Contractor Relationship.
(a) Service Recipient shall perform the Services and other obligations under thisAgreement as an independent contractor of Service Provider. Without the express written consent of Service Provider (which shall not be withheld, conditioned or delayed), Service Recipient is prohibited from acting as a registered general securities representative of any other registered broker dealer for the purposes of providing Services or receiving compliance or support services. Nothing contained herein shall be construed to create or establish the relationship of employer and employee, agent, joint venturer, or partner between the parties. Neither Party is authorized to make any representation, contract, or commitment on behalf of the other Party without prior written permission from such other Party.
(b) Service Recipient shall not be entitled to any benefits offered by Service Provider to its employees, including, without limitation, workers’ compensation, medical insurance, disability insurance, vacation pay, or sick pay. Service Recipient shall not be entitled to any other benefits or remuneration except as expressly set forth herein.
(c) Service Recipient is responsible for all costs and expenses not listed herein, including costs of Service Recipient’s legal counsel, travel, materials and additional costs of doing business.
(d) Service Recipient recognizes that registered representative status can only be offered to an individual and not a corporate entity. Service Recipient will therefore be issued a 1099 tax form naming the Service Recipient as an individual, not as a corporate entity, for compensation received hereunder.
(e) Service Recipient may enter into agreements related to Service Recipient’sOutside Business Activities and FINRA rule 3280 (“Private SecuritiesTransaction”), subject to Service Recipient’s compliance with the terms hereof and applicable FINRA regulations.
2. Non-Solicitation. ServiceRecipient shall not, during the Term and for a period of two years immediately following the termination of this Agreement for any reason (as if the termination of this Agreement had not occurred), whether with or without cause, either directly or indirectly, solicit, induce, recruit or encourage any of Service Provider’s affiliates, directors, employees, agents, customers, clients, registered representatives (excluding Secondary Representative(s) under this Agreement that became a registered representative of ServiceProvider for the purpose of supporting Service Recipient while performing the Services) or consultants to terminate their relationship with Service Provider, either for Service Recipient or for any other person or entity. Further, during the Term of this Agreement and at any time following the termination for any reason, whether with or without cause, Service Recipient shall not use any Confidential Information (as defined below) of Service Provider to influence any of Service Provider’s clients or customers not to work with Service Provider or not purchase products or services from Service Provider.
3. Confidentiality.
(a) Service Recipient and Service Provider will maintain in confidence and will not, directly or indirectly, disclose, share or use, both during the Term and for a period of two years after the Term, any proprietary information, Confidential Information, or know-how belonging to the other party, whether or not it is in written or permanent form, except to the extent necessary toper form the Services during the Term.
(b) “Confidential Information” shall include, but not be limited to, (i) thisAgreement and the MSA Provisions; (ii) all agreements and contracts in which Service Provider or Service Recipient is a party, including, without limitation, those in the form of an agreement and all content and terms therein; and the names of parties to any agreement with Service Provider orService Recipient; (iii) the Services; (iv) pricing, commission, or other related compensation agreements with such parties; (v) Service Provider’s and Service Recipient’s documents, business plans and strategies, including, without limitation, any and all documents and templates located at or through https://my.finalis.com (except only to the extent used in connection with a transaction through Service Recipient’s affiliation with Service Provider); (vi) any and all data, information, documents, proprietary technology and know-how located at or through or in connection with the Services or the service technology provided by Service Provider to include the Mandate Marketplace™; and (vii) any other information regarding Service Provider or Service Recipient or its respective business plans, documents, proprietary information and technology and practices.
(c) Notwithstanding the foregoing, Service Recipient and Service Provider shall not be subject to the restrictions on disclosure set forth herein where:
(i) the Confidential Information is now or becomes public through no action of Service Recipient or Service Provider in violation of this Agreement or any other contractual obligation of such party;
(ii) Service Recipient or Service Provider already had the Confidential Information in their possession from their own work prior to the execution of thisAgreement;
(iii) Service Recipient or Service Provider received the Confidential Information from a third party on a non-confidential basis with no knowledge that the third-party was in breach of any obligations in relation to such disclosure;
(iv) Service Recipient or Service Provider receives permission in writing from the Service Provider or Service Recipient to disclose the Confidential Information; or
(v) the disclosure of the Confidential Information is required by law, FINRA rules or court order.
4. Non-Circumvention. During the term of this Agreement and for a period of 12 months thereafter, neither Service Recipient nor its affiliates shall use information, contacts or introductions garnered through Service Provider, other representatives, persons or prospective clients or users engaged by or affiliated or in a contractual agreement with Service Provider and/or through technology services provided by Service Provider to include the Mandate Marketplace™ (the “MandateMarketplace™”) to conduct discussions, provide financial advisory or investment banking services or consummate a transaction unless conducted in conjunction with Service Provider, such representative(s), person(s), client(s)or user(s) and/or consummated through the Mandate Marketplace™.
Unless there is a written agreement to which Service Recipient and Service Provide rare parties, Service Recipient agrees that, during the term of this Agreement and for a period of 12 months thereafter, neither Service Recipient nor its affiliates shall initiate or conduct discussions with, provide financial advisory or investment banking services to or consummate a transaction with a company sourced through the Mandate Marketplace™. Service Recipient acknowledges and agrees that any letter or engagement agreements entered into by Service Recipient that contravene this Section are null and void.
During the term of this Agreement and for a period of 12 months thereafter, in the event Service Recipient or its affiliates receives any inquiry regarding a transaction sourced through the Mandate Marketplace™ from any party not already sourced through the Mandate Marketplace™, unless there is a written agreement with such party to which Service Recipient and Service Provider are parties, Service Recipient shall promptly inform (i) the other representatives affiliated withService Provider involved in such transaction and (ii) Service Provider of such inquiry so that any other representatives affiliated with Service Provider involved in such transaction may assist in evaluating such party and its interest in such transaction and in any resulting negotiations. Service Recipient shall not circumvent, avoid, bypass or obviate Service Provider and, if applicable, other representatives affiliated with Service Provider, directly or indirectly, to avoid payment of fees, commissions or any other form of compensation to Service Provider or such representative due in connection with this Agreement, the Mandate Marketplace™ or any other agreement.
5. Indemnification of Service Provider. Service Recipient shall indemnify and hold harmless Service Provider and its officers, directors, agents, employees and controlling persons (collectively, the “Service Provider Indemnified Persons”and each a (“Service Provider Indemnified Person”) from and against all liabilities, claims, causes of action, penalties, interest, and reasonable and documented expenses, including reasonable and documented fees and expenses of legal counsel (collectively, “Losses”), which a Service Provider Indemnified Person may incur that result from: (i) performance of, or failure to perform, the Services by Service Recipient; (ii) any penalty or enforcement action taken by a regulatory authority against any Service Provider Indemnified Person in connection with Service Recipient, the Services or this Agreement; (iii) the breach of any of Service Recipient’s obligations of this Agreement or any failure of Service Recipient to perform any of Service Recipient’s obligations in this Agreement; (iv) actions or inactions or performance or failure toper form services in connection with any engagement letter, consulting agreement, contract or any other document or agreement that results in anyLosses against a Service Provider Indemnified Person to include any Losses initiated or pursued by or resulting from a client of Service Recipient or (v) in connection with any claim or potential claim by or against a Service Recipient or a Service Recipient’s current or previous employers, associates, partners and other affiliates (“ServiceRecipient Affiliate”), including, without limitation, claims by a ServiceRecipient or Service Recipient Affiliate, a current or former client, broker dealer or employer (in whatever capacity) of a Service Recipient or ServiceRecipient Affiliate, or a governmental or self-regulatory agency arising out of or such current or former client’s, broker dealer’s or employer’s or a ServiceRecipient’s or Service Recipient Affiliate activities to include prior to the date hereof; provided, however, that the Service Provider will not be liable to indemnify an Indemnified Person pursuant to this paragraph to the extent that an arbitrator (or panel of arbitrators) or a court of competent jurisdiction will have determined by a final non-appealable judgment that such claim resulted from the gross negligence or willful misconduct of such Indemnified Person.
6. Indemnification of Service Recipient. Service Provider shall indemnify and hold harmless Service Recipient (collectively, the “Service Recipient Indemnified Persons”and each a “Service Recipient Indemnified Person”) from and against all Losses that a Service Recipient Indemnified Person may incur or suffer under any U.S.federal or state securities laws that result from: (i) Service Provider’s performance of, or grossly negligent or willful failure to perform, the obligations of Service Provider under this Agreement; (ii) any penalty or enforcement action taken by a regulatory authority against any Service Recipient Indemnified Person in connection with such obligations; or (iii) the material breach, due to gross negligence or willful misconduct of Service Provider, of any of Service Provider’s representations and warranties in this Agreement; provided, however, that Service Provider shall not be liable under this paragraph if the indemnification the Service Recipient Indemnified Person seeks resulted from gross negligence or fraud of a Service RecipientIndemnified Person or failure of Service Recipient to perform any of ServiceRecipient’s obligations in this Agreement. In no event will the aggregate amount to be contributed by Service Provider towards all Losses incurred by Service Recipient exceed the actual fees received by Service Provider pursuant to the Agreement in the preceding 3 months of the date of a claim.
7. Legal Services. Although some of the owners and employees of Service Provider are attorneys, Service Provider does not provide legal services.
8. Force Majeure. In the event that Service Provider is unable to perform any of its obligations under this Agreement due to natural disaster, war, acts of terror or aggression, actions or decrees of governmental bodies or communication line failure, which are not the fault of Service Provider (hereinafter referred to as a “Force Majeure Event”), Service Provider shall promptly give notice to the other party and shall do every thing reasonably possible to resume performance and minimize any adverse impact; provided, further, that the foregoing shall not Service Provider’s obligation to implement its disaster recovery plan and backup procedures. Upon receipt of such notice, the obligations under this Agreement shall be immediately suspended.
9. GeneralProvisions.
(a) EntireAgreement; Severability. This Agreement, together with the MSA Provisions and all annexes and schedules, and any other agreements incorporated by reference in such annexes and schedules, represents the entire agreement between the parties and supersedes all prior and contemporaneous agreements, communications and representations between the parties, either oral or in writing, relating to the subject matter herein. If the final judgment of any court or arbitrator of competent jurisdiction determines that any part of thisAgreement is unenforceable or invalid, the remainder of this Agreement will continue to be valid and enforceable. There shall be no construction of any provision against Service Provider because this Agreement was drafted by Service Provider.
(b) Amendments. ServiceProvider reserves the right to amend this Agreement to include its fees hereunder from time to time. Service Provider shall send written notice bye mail to Service Recipient of such amendments. No amendment or termination of this Agreement shall relieve Service Recipient of its obligation under the Agreement to pay Service Provider their Membership Fees and Minimum Security, as applicable, for the remainder of the term of the Agreement. If such amendment has a material adverse effect on any Service Recipient, Service Recipient shall be entitled to terminate this Agreement by written notice to Service Provider within 30 calendar days after the date of Service Recipient’s receipt of notice of such amendment. If this Agreement is not so terminated by a ServiceRecipient within such time, Service Recipient shall be deemed to have accepted the amendment.
(c) Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement will be controlled by and construed under the laws of the State of New York without giving effect to any principles of conflicts of law. Each party hereby irrevocably consents and agrees that any proceeding between the parties arising out of or related to this Agreement shall be brought and maintained in any federal or state court of competent jurisdiction sitting in New York, New York.Each party irrevocably waives any right to trial by jury in any proceeding related to or arising out of this Agreement.
(d) Arbitration. Any dispute, claim or controversy arising out of or relating to this Agreement that cannot be resolved directly between the parties will be determined, upon the demand of either Party, by binding arbitration in San Francisco, California, before a sole arbitrator with appropriate experience in securities, mergers and acquisitions, and investment banking. Such arbitration will be administered by FINRA. The parties shall be entitled to conduct discovery as provided inSections 1283.05 and 1283.1 of the California Code of Civil Procedure. The decision of the arbitrator shall be final and binding. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.
(e) Attorneys’Fees. If any dispute between the parties results in arbitration, the prevailing Party shall be entitled to all reasonable costs in connection with the arbitration and the enforcement of any award rendered by the arbitrator, including, but not limited to, reasonable attorneys’ fees.
(f) Non-disparagement. ServiceRecipient expressly agrees that it will not in any way disparage ServiceProvider, which shall include, but not be limited to, writing disparaging remarks or making disparaging statements, about Service Provider to any party. This clause shall survive the termination, expiration or completion of Service Provider’s engagement under the MSA.
(g) Transfer. This Agreement, and any rights granted herein or therein, are personal to parties and shall not be assigned, delegated, sub licensed, subcontracted, encumbered, or otherwise transferred; provided, however, that Service Provider may assign all Service Provider’s rights and obligations under this Agreement to any corporation or other business entity that succeeds to all or substantially all of Service Provider’s business through merger, consolidation, corporate re organization or by acquisition of all or substantially all of Service Provider’s assets.
(h) Electronic Signature. Each party agrees that thisAgreement and any other documents to be delivered in connection herewith may be electronically signed, and that any electronic signatures appearing on this Agreement or such other documents are the same as handwritten signatures for the purposes of validity, enforceability, and admissibility.
10. Technology Services Provided by Service Provider. Service Provider will provideService Recipient access to certain technology services provided by an affiliate of Service Provider. Such technology services are subject to aTerms of Service, and Privacy Policy, each available at www.finalis.com and incorporated herein by reference, mutatis mutandis. Service Recipient shall not, either directly or through a third party, use any technology or the source code or a derivative thereof or any confidential or proprietary information of Service Provider to create any computer software programs, user documentation or service which is functionally, visually or otherwise identical or substantially similar to or in competition with any program, product, document or service of Service Provider.
Last updated: February 1, 2023
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