EXHIBIT 10.1

 
FULLY DISCLOSED CLEARING AGREEMENT

OF

PERSHING LLC
([FINRA MEMBER])

THIS AGREEMENT is made and entered into this 21st day of April, 2008 by and
between Pershing LLC (“Pershing”), a limited liability company, and Broadpoint
Securities, Inc. (“Broker”), a _New York corporation.

1.0           APPROVAL

This Agreement shall be subject to approval by the Financial Industry Regulatory
Authority  (“FINRA”) and by any other self-regulatory organization vested with
the authority to review or approve it.  Pershing shall submit this Agreement to
the FINRA and Broker shall submit the Agreement to any other such organization
from which Broker is required to obtain approval.  In the event of disapproval,
the parties shall bargain in good faith to achieve the requisite approval.

2.0           AGREEMENT

From the date of this Agreement until the termination of this Agreement as
provided in Paragraph 23 hereof, Pershing shall carry the proprietary accounts
of Broker and the cash and margin accounts of the customers of Broker introduced
by Broker to Pershing, and accepted by Pershing, and shall clear transactions on
a fully disclosed basis for such accounts, in the manner and to the extent set
forth in this Agreement.

3.0           ALLOCATION OF RESPONSIBILITY

3.1           Responsibilities of the Parties.

Pursuant to NYSE Rule 382, responsibility for compliance with applicable laws,
rules, and regulations of the Securities and Exchange Commission (“SEC”), the
FINRA, the NYSE, and any other regulatory or self-regulatory agency or
organization (collectively the “Rules”) shall be allocated between Pershing and
Broker as set forth in this Agreement.  To the extent that a particular function
is allocated to one party under this Agreement, the other party shall supply
that party with information in its possession pertinent to the performance and
supervision of that function.

3.2           Relationship with Customers.

Pershing shall provide services under this Agreement to Broker only to the
extent explicitly required by specific provisions contained in this Agreement
and shall not be responsible for any duties or obligations not specifically
allocated to Pershing pursuant to this Agreement.  Broker shall enter into
appropriate contractual arrangements with customers on its own behalf, and such
agreements shall make Broker, and not Pershing, responsible to customers for the
provision of services.  Broker shall not be deemed to be an agent of Pershing
for any purpose, nor shall Pershing be deemed to have a fiduciary relationship
with any of Broker’s customers.  Broker acknowledges that Pershing does not
control the business or operations of Broker.

 

 
Page 1 of 35

--------------------------------------------------------------------------------

 
 
4.0           REPRESENTATIONS AND WARRANTIES

4.1           Broker.  Broker represents and warrants that:

4.1.1    Corporation Duly Organized.  Broker is a corporation duly organized,
validly existing, and in good standing under the laws of the state of its
incorporation.

4.1.2        Registration.  Broker is duly registered and in good standing as a
broker-dealer with the SEC.

4.1.3        Authority to Enter Agreement.  Broker has all requisite authority,
whether arising under applicable federal or state law or the rules and
regulations of any regulatory or self-regulatory organization to which Broker is
subject, to enter into this Agreement and to retain the services of Pershing in
accordance with the terms of this Agreement.

4.1.4        Material Compliance with Rules and Regulations.  Broker and, to the
best of its knowledge, each of its executive officers, directors, general
securities principals in charge of one of Broker’s principal divisions, and
Chief Financial and Operation Principals (the aforementioned individuals
collectively referred to as the “Broker Executives”) is in material compliance
with, and during the term of this Agreement shall remain in material compliance
with, the registration, qualification, capital, financial reporting, customer
protection, and other requirements of every self-regulatory organization of
which Broker is a member, of the SEC, and of every state to the extent that
Broker or any of the Broker Executives is subject to the jurisdiction of that
state.

4.1.5        No Pending Action, Suit, Investigation, or Inquiry.  Broker has
disclosed to Pershing every material action, suit, investigation, or proceeding
pending against Broker, any of its affiliates, or any of the Broker Executives ,
by or before any court or other tribunal, any arbitrator, any governmental
authority, or any self-regulatory organization of which any of them is a
member.  Broker shall notify Pershing promptly of the initiation of any action,
suit, investigation, inquiry, or proceeding that will have a material adverse
impact on the capital of Broker, unless such notification is prohibited by law.

4.1.6        Broker Responsibility. Broker shall be responsible for all internal
operations related to its business including without limitation (i) all
accounting, bookkeeping, record-keeping, cashiering, commodity transactions, or
any other transactions not involving securities; or any matter not contemplated
by the Agreement; (ii) preparation of Broker’s payroll records, financial
statements, or any analysis thereof; (iii) preparation or issuance of checks in
payment of Broker’s expenses, other than expenses incurred by Pershing on behalf
of Broker pursuant to this Agreement; and (iv) payment of commissions to
Broker’s sales personnel.

4.2           Pershing.  Pershing represents and warrants that:

4.2.1        Duly Organized.  Pershing is a Limited Liability Company duly
organized, validly existing, and in good standing under the laws of the state of
Delaware.

4.2.2        Registration.  Pershing is duly registered and in good standing as
a broker-dealer with the SEC and is a member firm in good standing of FINRA.

4.2.3        Authority to Enter Agreement.  Pershing has all requisite
authority, whether arising under applicable federal or state law, or the rules
and regulations of any regulatory or self-regulatory organization to which
Pershing is subject, to enter into this Agreement and to provide services in
accordance with the terms of this Agreement.
 

 
Page 2 of 35

--------------------------------------------------------------------------------

 
 
4.2.4        Compliance with Registration. Pershing and , to the best of its
knowledge, each of its employees, executive officers, directors, general
securities principals in charge of one of Pershing’s principal divisions, and
Chief Financial and Operation Principals (the “Pershing Executives” and each of
its employees) is in material compliance with, and during the term of this
Agreement shall remain in material compliance with the registration,
qualification, capital, financial reporting, customer protection, and other
requirements of every self-regulatory organization of which Pershing is a
member, of the Securities and Exchange Commission (“SEC”), and every state.

5.0           ESTABLISHING AND ACCEPTING NEW ACCOUNTS

5.1           Acceptance of New Accounts.  Broker shall be responsible for
opening and approving new accounts in compliance with the Rules.

5.1.1        Pershing reserves the right to reject any account that the Broker
may forward to Pershing as a potential new account for commercially reasonable
reasons, including but not limited to, credit and reputational
considerations.  Pershing also reserves the right to terminate any account
previously accepted by it as a new account for commercially reasonable reasons,
including but not limited to, credit and reputational considerations.

5.2           Maintenance of Account Information.  Pershing may rely without
inquiry on the validity of all customer information furnished to it by
Broker.  Possession of any such documents or information, however provided,
concerning Broker’s customers does not create a duty on the part of Pershing to
review or understand the content of those documents.

5.3           Pershing Operations Manual.  Broker acknowledges receipt and
familiarity with the Pershing “Quick Reference Guide” and “Bulletins” and agrees
to familiarize itself with any modifications or supplements to such documents
that may be issued upon reasonable prior notice to Broker from time to
time.  Broker further agrees to abide by Pershing’s “Quick Reference Guide” and
“Bulletins” and any modifications or supplements to such documents that may be
issued upon reasonable prior notice to Broker from time to time and delivered or
made available to Broker.

6.0           SUPERVISION OF ORDERS AND ACCOUNTS

6.1           Responsibility for Compliance.  Broker shall be solely responsible
for compliance with suitability, “Know Your Customer” rules, and other
requirements of federal and state law and regulatory and self-regulatory rules
and regulations governing transactions and accounts.  Possession by Pershing of
surveillance records, exception reports, or other similar data shall not
obligate Pershing to review or be aware of their contents.  Pershing shall not
be required to make any investigation into the facts surrounding any transaction
that it may execute or clear for Broker or any customer of Broker.

6.2           Compliance Procedures.  Broker agrees to supervise compliance with
the Rules.  Broker shall review transactions and accounts to assure compliance
with prohibitions against manipulative practices, insider trading, market timing
and late trading of mutual fund shares and other requirements of federal and
state law and applicable regulatory and self-regulatory rules and regulations to
which Broker or its customer are subject.  Without limiting the above, Broker
shall be responsible for compliance with the supervisory requirements in Section
15(b)(4) of the Securities Exchange Act of 1934, as amended, FINRA Rule 3010,
NYSE Rules 342, 351 and 431, and similar rules adopted by any other regulatory
or self-regulatory agency or organization, to the extent applicable.

6.3           Knowledge of Customer’s Financial Resources and Investment
Objectives.  Broker shall comply with Rule 405(1) of the FINRA or comparable
requirements of similar rules of any other regulatory or self-regulatory
organization to which Broker is subject.  Broker shall obtain all facts it deems
necessary in order for it to perform its responsibilities under applicable laws
and rules relating to each customer, each cash and margin account, each order,
and each person holding a power of attorney over any account, in order to assess
the suitability of transactions (when required by applicable rules), the
authenticity of orders, signatures, endorsements, certificates, or other
documentation, and the frequency of trading.  Broker warrants that, to the best
of its knowledge, Broker will not open or maintain accounts for persons who are
minors or who are otherwise legally incompetent and that Broker will comply with
FINRA Rule 407 and other laws, rules, or regulations that govern the manner and
circumstances in which accounts may be opened or transactions authorized.
 

 
Page 3 of 35

--------------------------------------------------------------------------------

 
 
6.4           Furnishing of Investment Advice.  Broker shall be solely
responsible for any recommendation or advice it may offer to its customers.

6.5           Discretionary Accounts.  Broker shall be solely responsible for
obtaining customer approval for and supervising discretionary accounts.

6.6           Obligations Regarding Certain Disclosures.  Unless otherwise
agreed between the parties, Broker shall make any disclosures and obtain any
agreements from its customers required by applicable law or regulation,
including, without limitation, any disclosures or agreements required for
margin, listed options, IPO’s, mutual funds, penny stocks, derivative
securities, account transfers or conversions.  The cost of making such
disclosures or obtaining such agreements shall be borne by Broker.

7.0           EXTENSION OF CREDIT

7.1           Presumption of Cash Account. Pershing may, but is not required to,
permit customers of Broker to purchase securities on margin, but all
transactions for a customer will be deemed to be either RVP/DVP or
cash transactions, and payment for those transactions will be required in the
manner applicable to either RVP/DVP or cash transactions, unless, on or prior to
settlement, Broker has furnished Pershing with an executed margin agreement and
consent to loan of securities.

7.2           Margin Requirements. Margin accounts introduced by Broker shall be
subject to Pershing's margin requirements as in effect from time to time.
Pershing reserves the right to refuse to accept any transaction in a margin
account without the actual receipt of the necessary margin and to impose a
higher margin requirement for a particular account when, in Pershing's
commercially reasonable discretion, the past history or nature of the account or
other factors or the securities held in it warrant such action. In all
instances, Broker may require higher margin than imposed by Pershing for any
particular account, group of accounts, or all accounts introduced by Broker to
Pershing. In any case where Broker requests Pershing to extend credit upon
control or restricted securities, pursuant to Rule 144under the Securities Act
of 1933, as amended ("Rule 144"), or otherwise; Broker shall submit to Pershing
such documentation, agreements and information as shall be reasonably required
by Pershing to decide to extend such credit. Any extension of credit so approved
shall be subject to Pershing's credit policies as shall be in effect from time
to time.

7.3           Margin Maintenance and Compliance with Regulation T and SEC Rule
15c3-3(m)

7.3.1        Initial Margin. Broker shall be responsible for the initial margin
requirement for any transaction until such initial margin has been received by
Pershing in acceptable form.

7.3.2        Margin Calls. After the initial margin for a transaction has been
received, subsequent margin calls may be made by Pershing at its discretion.
Pershing shall calculate the maintenance requirement and notify Broker of any
amounts due. Broker shall be responsible for forwarding the margin call to
its customer and obtaining the amount due directly from Broker's customer. If
Broker fails to take the appropriate action, Pershing reserves the right to
collect the amount due directly from Broker's customer. Broker agrees to
cooperate with Pershing in complying with and obtaining margin in response to
such calls.
 
 

 
Page 4 of 35

--------------------------------------------------------------------------------

 
 
7.3.3        Actions upon Failure to Meet Margin Calls or Deliver Securities. In
the event that satisfactory margin is not provided within the time specified by
Pershing, or securities sold are not delivered as required, Pershing may take
such actions as Pershing deems appropriate, including, but not limited
to, entering orders to buy-in or sell-out. Broker shall cooperate with Pershing
by entering orders to buy-in or sell-out securities. Compliance with a request
to withhold action shall not be deemed a waiver by Pershing of any of its rights
under this Agreement.

7.4  
Charging of Interest and Disclosures Pursuant to Rule 10b-16 and NASD Rule 2341.
Interest charged by Pershing to Broker's clients with respect to debit balances
in customers' accounts shall be determined in accordance with Schedule A
attached to this Agreement and in accordance with Pershing’s standard disclosure
under NYSE Rule 382. Broker shall send each margin customer a written Margin
Disclosure Statement and other written disclosures, in a form acceptable
to Pershing, at the time of the opening of a margin account as required by SEC
Rule 10b-16 and NASD Rule 2341. If not already delivered to each margin customer
by Pershing in connection with the delivery of the written new account
Disclosure Statement in accordance with NYSE Rule 382, Broker agrees to deliver
a written disclosure statement to its customer as required by SEC Rule
10b-16. 7.5 Unsecured Debits or Unsecured Short Positions. Pershing shall charge
against the accounts of Broker an amount equal to the value of any unsecured
debit or short position (on a "mark to market" basis) in a customer account if
that position has not been promptly resolved by payment or delivery.
Any remaining debit may be charged against Broker pursuant to Paragraph 20 of
this Agreement.

7.5  
Unsecured Debits or Unsecured Short Positions. Pershing shall charge against the
accounts of Broker an amount equal to the value of any unsecured debit or short
position (on a "mark to market" basis) in a customer account if that position
has not been promptly resolved by payment or delivery. Any remaining debit may
be charged against Broker pursuant to Paragraph 20 of this Agreement.

 
7.6           EXTENSION OF NONPURPOSE CREDIT

7.6.1
Nonpurpose Credit.  Pershing may, but is not required to, extend and maintain
nonpurpose credit to customers of Broker not for purposes of purchasing,
carrying, or trading in securities, but all extensions of credit to a customer
will be deemed to be purpose credit subject to Regulation T unless, prior to
extending the credit, Broker has furnished Pershing with an executed Federal
Reserve Form T-4.

7.6.2
Nonpurpose Lending Requirements.  Nonpurpose credit extended by Pershing shall
be subject to nonpurpose lending requirements as established and modified by
Pershing from time to time.  Pershing reserves the right to refuse to extend
nonpurpose credit without the actual receipt of the necessary underlying
collateral and to impose a higher underlying collateral value requirement for a
particular account when, in Pershing's discretion, the past history or nature of
the account or other factors or the securities held in it warrant such
action.  In all instances, Broker may require a lower loan advance rate to
collateral value than imposed by Pershing for any particular account, group of
accounts, or all accounts introduced by Broker to Pershing.  In any case where
Broker requests Pershing to extend nonpurpose credit upon control or restricted
securities, pursuant to Rule 144 under the Securities Act of 1933, as amended,
or otherwise; Broker shall submit to Pershing such documentation, agreements and
information as shall be reasonably required by Pershing to decide to extend such
credit.  Any extension of nonpurpose credit so approved shall be subject to
Pershing’s credit policies as shall be in effect from time to time.

 
 

 
Page 5 of 35

--------------------------------------------------------------------------------

 
7.6.3       Managed/Advisory Accounts as Underlying Collateral

7.6.3.1
Managed/Advisory Account Eligible to Support Extension of Non Purpose Credit

Pershing may, but is not required to, allow accounts meeting the following
criteria to participate in the non-purpose credit program and to be pledged by
customers of Broker to support the extension of non-purpose credit:

a) Separately managed accounts managed by a third party money manager or
managers,

b) Mutual fund wrap programs where the Broker acts as Corporate Registered
Investment Advisor (“RIA”)

c) Advisory programs where Broker acts as Corporate RIA

d) Advisory programs where a Turnkey Asset Management Provider (TAMP) acts as
Corporate RIA,

e) Advisory programs where an individually registered RIA manages clients’
assets on a fully discretionary basis.

f) Advisory programs where Representatives of Broker have the ability to adjust
the actual client investments, on a discretionary basis, within a set of
parameters
       set forth, approved and overseen by the Corporate RIA (the Corporate RIA
maintains the ADV agreement with the end customer).

7.6.3.2    Utilization of Managed/Advisory Accounts as Underlying Collateral.
Broker will be responsible for ensuring that managed/advisory account(s) pledged
to support the extension of non purpose credit continue to meet the requirements
of a managed/advisory account at all times. Accounts listed on the Federal
Reserve Form T4 will be recognized by Pershing as separately managed/advisory
accounts. In the event that a managed/advisory account(s) pledged to support the
extension of  non purpose credit cease to be classified as a managed/advisory
account(s), the Broker agrees to notify Pershing immediately and take the
necessary actions to ensure compliance with Regulation T.  Upon such
notification, Pershing may, but is not required to maintain the pledge
relationship.

In the event the Broker fails to take necessary actions to ensure compliance
with Regulation T, Pershing may remove the managed account from the non-purpose
credit program and may require immediate full payment of the loan.  In the event
that the removal from the program or the requirement of immediate full payment
of the loan results in a margin call, the Broker shall be responsible for taking
the necessary actions to satisfy the margin call as prescribed in the Agreement.

7.6.4
Underlying Collateral Maintenance and Compliance with Regulation T and SEC Rule
15c3-3(m).

 
 
Page 6 of 35

--------------------------------------------------------------------------------

 
 
7.6.4.1
Initial Underlying Collateral.  Broker shall be responsible for the initial
underlying collateral requirement for any extension of nonpurpose credit until
such initial underlying collateral has been received by Pershing in acceptable
form.

7.6.4.2
Underlying Collateral Calls.  After the initial underlying collateral for an
extension of nonpurpose credit has been received, subsequent underlying
collateral calls may be made by Pershing at its discretion.  Pershing shall
calculate the maintenance requirement and notify Broker of any amounts
due.  Broker shall be responsible for issuing the underlying collateral call to
its customer and obtaining the amount due directly from Broker's customer.  If
Broker fails to take the appropriate action, Pershing reserves the right to
collect the amount due directly from Broker's customer.  Broker agrees to
cooperate with Pershing in complying with and obtaining underlying collateral in
response to such calls.

7.6.4.3
Actions Upon Failure to Meet Underlying Collateral Calls or Deliver
Securities.  In the event that satisfactory underlying collateral is not
provided within the time specified by Pershing, or securities sold are not
delivered as required, Pershing may take such actions as Pershing deems
appropriate, including, but not limited to, entering orders to buy in or
sell-out.  Broker shall cooperate with Pershing by entering orders to buy-in or
sell-out securities.  Compliance with a request to withhold action shall not be
deemed a waiver by Pershing of any of its rights under the Agreement.

7.6.5
Charging of Interest and Disclosures Pursuant to Rule 10b-16.  Interest charged
with respect to the extension of nonpurpose credit shall be determined in
accordance with Schedule A attached to this Agreement.  Broker shall send each
customer a written disclosure statement, in a form acceptable to Pershing, at
the time of the extension of nonpurpose credit as required by SEC Rule 10b-16.

7.6.6            Unsecured Debits.  Pershing shall charge against the accounts
of Broker an amount equal to the value of any unsecured debit (on a “mark to
market” basis) in a customer account if that position has not been promptly
resolved by payment or delivery.  Any remaining debit may be charged against
Broker pursuant to Pershing’s right to offset in the Agreement.

7.6.7            Equal Credit Opportunity Act (“ECOA”).  In all cases, the
introducing Broker/Dealer shall abide by all Federal Law rules & regulations as
it pertains to the (“ECOA”). More specifically, this law is designed to prohibit
discrimination in the extension or terms of credit to creditworthy applicants on
any one of the following “prohibited bases”: race, color, religion, national
origin, sex, marital status, or age (provided that the applicant has the
capacity to contract) or on the basis that all or part of an applicant’s income
is derived from a public assistance program or the fact that the applicant has,
in good faith, exercised any “rights” under the Consumer Credit Protection Act,
of which (“ECOA”) is a part. Under (“ECOA”) and Regulation B, the introducing
Broker/Dealer may not discriminate against any applicant on a prohibited basis
“regarding any aspect of a credit transaction”.

7.6.8            Deduction or Withholding for Tax.  All payments made by a
borrower, who participates in Pershing’s non-purpose credit program, shall be
made without any deduction or withholding for or on account of any tax imposed
by any laws, other than US state or federal laws, applicable to any payment
under this agreement (“Local Laws”).  The undersigned shall indemnify Pershing
against any tax levied or imposed upon Pershing by Local Laws in respect of any
payment under this agreement in the event such tax is not otherwise paid.

 

 
Page 7 of 35

--------------------------------------------------------------------------------

 
 
8.0           MAINTENANCE OF BOOKS AND RECORDS

8.1           Stock Records.  Pershing shall maintain stock records and other
prescribed books and records of all transactions executed or cleared through it
on a basis consistent with generally accepted practices in the securities
industry and with applicable laws and rules governing clearing
brokers.  Pershing shall maintain, and make available to Broker, such books and
records after termination of this Agreement for so long as Pershing is required
to maintain such books and records as required by and in accordance with
applicable law.  To the extent not required by law, Pershing will make such
books and records available to Broker after the termination of this Agreement
upon Broker’s reasonable request so long as Pershing has retained such books and
records set forth above. Broker shall reimburse Pershing for its costs and
expenses in retrieving such books and records.

8.2           Regulatory Reports and Records.  Broker shall prepare, submit, and
maintain copies of all reports, records, and regulatory filings required of
Broker by any entity that regulates it, including, but not limited to, copies of
all account agreements and similar documentation obtained pursuant to Paragraph
5 of this Agreement and any reports and records required to be made or kept
under the Currency and Foreign Transactions Reporting Act of 1970, (the “Bank
Secrecy Act”), and any rules and regulations promulgated pursuant
thereto.   Pershing will promptly provide Broker with any information regarding
Broker’s accounts in its possession necessary to enable Broker to prepare any
such reports.

8.3           ANTI-MONEY LAUNDERING, OFFICE OF FOREIGN ASSETS CONTROL, AND
ANTI-TERRORIST FINANCING OBLIGATIONS

8.3.1           Broker’s Responsibilities:
 
a.    Anti-Money Laundering Obligations.  Broker hereby agrees and acknowledges
that it is obligated to and hereby represents and warrants that it now does and
will continue to comply with anti-money laundering laws and regulations,
including any future obligations that may be imposed on Broker by laws or
regulations, to know its customers, their source and use of funds, and to
monitor for and identify suspicious activity.
 
b.           Anti-Money Laundering Program.  Broker represents and warrants that
it has established and maintains an anti-money laundering program, consisting
of, at a minimum, written internal policies, procedures and controls including a
means for monitoring and identifying suspicious activity, the designation of an
anti-money laundering compliance officer (whose identity shall be made known to
Pershing and to the FINRA), an ongoing employee training program, an independent
audit function to test such programs annually, and any additional requirements
set forth in the rules of any self-regulatory organization of which Broker is a
member.  Broker will allow Pershing access to such information as Pershing deems
necessary in order for Pershing to test Broker’s adherence to Broker’s
anti-money laundering program.  To the extent the testing would be conducted at
Broker’s office, Pershing needs to provide Broker with reasonable prior notice
(at least three business days) and the testing needs to be done on a business
day and during regular business hours.
 
8.3.2           Broker to File CTRs and Provide Copies to Pershing.  Broker is
responsible for filing currency transaction reports (“CTRs”) and will provide a
copy of all such reports to Pershing at the same time as they are filed in
accordance with applicable regulations.
 
a.           Suspicious Activity Reports.  Broker shall be responsible for
reviewing for suspicious activities and filing suspicious activity reports on
Form SAR-SF and shall coordinate such filing with Pershing.  Broker shall, as
soon as practical after identifying a suspicious activity and in any event prior
to filing a suspicious activity report on SAR-SF, notify Pershing’s Anti-Money
Laundering Compliance Officer and shall communicate with Pershing about the
transaction for purposes of sharing information about the transaction and
determining whether Broker or Pershing shall file the SAR-SF, unless such
sharing of information is prohibited by law.  Broker will provide Pershing with
copies of all SAR-SFs and other communications it files with respect to accounts
held at Pershing, unless prohibited by law.  In addition, Broker shall promptly
notify Pershing regarding any account activity Broker reasonably believes to be
suspicious, not legitimate, not having a reasonably apparent explanation, or
could support the filing of a Form SAR-SF.
 
 
Page 8 of 35

--------------------------------------------------------------------------------

 
 
b.           Other Transaction Reports.  Prior to filing any report with the
Treasury Department, the IRS, the U.S. Customs Service or any regulatory body or
organization relating to the reporting of currency transactions or the transfer
of currency or monetary instruments into or outside of the United States,
including, but not limited to, CTRs, CMIRs and SAR-SFs, Broker shall notify
Pershing’s Anti-Money Laundering Compliance Officer (unless such notification is
prohibited by law) and cooperate with Pershing as Pershing may deem
appropriate.  Broker will provide Pershing with copies of all reports and other
communications with respect to accounts held at Pershing that Broker files with
the Treasury Department, the IRS, the U.S. Customs Service, or any regulatory
body or organization relating to the reporting of currency transactions, the
transfer of currency or monetary instruments into or outside of the United
States, or in regard to any suspicious activity, including, but not limited to,
CTRs, CMIRs and SAR-SFs, unless the provision of such reports or communications
is prohibited by law.
 
8.3.3.          Reports by Pershing.  Pershing has the obligation and reserves
the right to make and file such suspicious activity or other reports as listed
in Paragraph 8.3.2 when it deems it necessary or appropriate; and Broker
recognizes that when Pershing does so, Pershing does not thereby assume any
responsibility for making and filing reports on behalf of Broker or relieve
Broker of its own responsibility for making and filing reports as necessary
under U.S. or other laws and regulations.  Pershing will provide Broker a copy
of any such report that relates to an account of the Broker or a customer of the
Broker, unless prohibited by law from doing so.
 
8.3.4.          Restrictions and Conditions on Certain Accounts.  Broker hereby
agrees and acknowledges that it is obligated to comply with restrictions and
conditions on opening and accepting certain accounts, including but not limited
to, the following:
 
a.           Know Your Customer and Government List Obligations, Including
OFAC.  At the time of the opening of any new account, Broker must obtain
sufficient information (but no less than the minimum required under Section 326
of the USA PATRIOT Act) from its customer in order to reasonably identify and
verify the identity of the client and the source of the client’s funds.  Broker
also must satisfy itself that opening the account would not violate the
provisions of various Executive Orders and regulations administered by the U.S.
Treasury Department’s Office of Foreign Assets Control (“OFAC”) or be subject to
other restriction based on such relevant government lists as may be published
from time to time.  Broker will promptly inform Pershing of the existence of any
account subject to an OFAC or government list restriction.  Pershing uses
interdiction software and will provide such relevant information as may from
time to time be available to assist Broker in detecting possible OFAC and
government list violations.
 
b.           Non-Resident Alien Accounts Carried Directly or Through an
Investment Advisor.  For any account opened for a non-resident alien, Broker
shall record the customer’s passport number and obtain a copy of the government
document used to verify the individual’s identity at the time the account is
opened.  Broker shall also obtain a copy of a passport or other governmental
identification for any of the following: the grantor/settlor of a foreign trust;
and any beneficial owner of an offshore corporate account if: (1) the account is
a personal holding company or private investment company; or (2) the beneficial
owner of the entity which maintains the account holds more than a 10% interest
in the entity.  Broker shall not open any introduced account for a personal
holding company or private investment company if one or more beneficial owners
are U.S. persons.  With respect to those accounts involving registered
investment advisers, Broker shall obtain, record and verify information as
outlined above about the adviser’s customer, including ascertaining the identity
of each beneficial owner, of any such account prior to opening the account
unless Broker has ascertained that the investment adviser meets the exception
set forth in SEC No Action letter dated February 13, 2004 relating to reliance
on investment advisers or other SEC guidance applies.
 
 
 
Page 9 of 35

--------------------------------------------------------------------------------

 
 
c.           Restrictions on Numbered Accounts.  Broker will not establish or
maintain specially coded or numbered accounts.
 
d.          Source and Use of Funds.  Broker will use reasonable efforts to
ascertain that the source of a customer’s funds are purportedly from customer,
the customer is not engaged in unlawful activities, the assets being invested
have been legitimately obtained, and any disbursements to a customer or third
party are for legitimate purposes.
 
e.           Transaction Reports and Transaction Monitoring Systems.  In order
to detect suspicious activity, Broker shall utilize the transaction reports and
transaction monitoring systems provided by Pershing or shall otherwise perform
its own transaction monitoring in order to detect suspicious activity.
 
f.           CIP.  In order to induce reasonable reliance by Pershing on Broker
with respect to Broker’s customer identification program (“CIP”), Broker
represents and warrants: (1) it has a written CIP consistent with Section 326 of
the USA PATRIOT Act and the rules thereunder; (2) it is subject to a rule
implementing 31 U.S.C. 5318(h); (3) it is regulated by a Federal functional
regulator as that term is defined under 31.C.F.R. § 103.120(a)(2); and (4) it
will certify annually to Pershing that it has implemented an anti-money
laundering program and will perform the requirements set forth in Broker’s
written CIP.
 
g.          Shell Bank Accounts, Foreign Bank Accounts, and Private Banking
Accounts.  Broker, working in conjunction with Pershing, shall implement the
provisions of sections 312, 313, and 319 of the USA PATRIOT Act as set forth in
Informational Bulletins disseminated by Pershing from time to time.  Copies of
all certifications obtained by Broker shall be forwarded to Pershing.
 
8.3.5           Pershing’s Responsibilities:
 
a.           Anti-Money Laundering Obligations.  Pershing hereby agrees and
acknowledges that it is obligated to comply with anti-money laundering laws and
regulations, including any future obligations that may be imposed on Pershing,
and that it is responsible to combat money laundering and terrorist
financing.  Pershing shall (1) make available to Broker such information as it
may from time to time recognize as potentially useful through use of Pershing’s
various interdiction monitoring tools to assist Broker in detecting possible
money laundering and terrorist financing schemes, and (2) conduct various manual
and systematic screenings to assist Broker in order to detect suspicious
activity and OFAC and other government list violations.  The actual systems and
tools used for these purposes may vary from time to time, at Pershing’s
discretion.
 
b.          Anti-Money Laundering Program.  Pershing has established and shall
continue to maintain an anti-money laundering compliance program in accordance
with § 352 of the USA PATRIOT Act as well as NYSE and FINRA rules.  Pershing
further represents and warrants: (1) it has written anti-money laundering
policies and procedures including procedures to identify and report suspicious
activity; (2) it has a designated Anti-Money Laundering Compliance Officer
(whose identity has been made known to Broker and the FINRA and FINRA); (3) it
provides continuous anti-money laundering training to its employees; and (4) its
anti-money laundering program is independently audited on an annual basis.
 
c.           Transaction Reports.  Pershing shall provide Broker with anti-money
laundering and other activity reports that can be used to detect suspicious
activity in order to assist Broker to meet its obligations.  Pershing will offer
training in the use of such reports.  Pershing will also, upon request, provide
Broker with relevant information in Pershing’s possession that the Broker needs
in order to file various required reports, including Forms CTR, CMIR, and SAR-SF
and will provide such further assistance as may be required in the filing of
such reports.
 
 
Page 10 of 35

--------------------------------------------------------------------------------

 
 
d.           Transaction Monitoring Systems.  Pershing shall make available to
Broker various information pertinent to Broker’s anti-money laundering efforts,
including certain systematic transaction monitoring tools such as The Rules
Enginetm anti-money laundering rules.  Pershing will provide training in the use
of such system to assist Broker in detecting suspicious activity and in
screening electronic customer account data stored by Pershing on behalf of
Broker against various databases through third-party service providers, for
purposes of detecting names of OFAC prohibited individuals, entities in
countries and other adverse information about the customer (“negative
verification”).
 
e.           Notification if Pershing Detects Suspicious Activity.  Through its
trained employees and the use of automated systems, Pershing will review for
(including, but not limited to, the items set forth in f through j below) and
may detect suspicious activity utilizing a risk-based approach.  Pershing’s
review does not relieve Broker of its own responsibilities to review for
suspicious activity which may involve the use of reports and systems listed in c
and d above.  In such circumstances when Pershing detects suspicious activity,
Pershing will contact Broker about the transaction for purposes of sharing
information about the transaction, unless Pershing believes that Broker itself
may be engaged in suspicious activity or Pershing would be prohibited by law
from sharing with Broker information about the suspicious transaction.  Nothing
in this Paragraph shall be read to prohibit Pershing from filing its own
suspicious activity and other reports, as it believes necessary or
appropriate.  Broker shall take such steps as Pershing may reasonably request in
connection with any potential suspicious activity in an account, including
closing the account.
 
f.            Incoming FedWires.  For all incoming federal fund wires
(“FedWires”), Pershing shall initially check relevant information, including the
remitter’s name, address, and account number, and the originating bank’s name
and address (to the extent provided on an incoming wire) to detect possible OFAC
restrictions.
 
g.           Outgoing FedWires for Third Parties.  Requests for third-party
wires are processed by Pershing on an exception basis using a risk-based
approach.  When allowed, for outgoing FedWires ordered to the delivery of a
person or entity other than the account holder, Pershing shall review relevant
information, including the payee’s name, address, and account number, and the
recipient bank’s name and address, to detect possible violations of OFAC
restrictions.
 
h.           Incoming Securities.  For securities received, Pershing shall
review the names of the specified holder of the security to detect possible
violations of OFAC restrictions in those circumstances when the registration on
the security received is different than the name on the account into which the
securities are deposited.
 
i.            Outgoing Securities for Third Parties.  For outgoing securities to
third parties, Pershing shall check the names and addresses of the third party
to whom the security is to be delivered to detect possible violations of OFAC
restrictions.
 
j.            Systematic Daily Screening, Government Lists Including OFAC.  On a
daily basis, Pershing shall compare all new accounts opened on its systems and
all substantial changes made to account data resident on its systems to
determine if any such new or changed account may be subject to an OFAC or other
designated government list.  In addition, Pershing shall compare its existing
customer database to added restrictions as may be published by the Federal
Government from time to time.  Further, periodically Pershing shall compare its
existing customer database to the existing OFAC government lists.  In the event
that Pershing’s comparisons indicate that an account may be subject to an OFAC
or government list restriction, Pershing will notify Broker if it believes there
is a match.  Broker shall cooperate fully with Pershing to determine whether, in
fact, the account is subject to any such restriction.  Broker will cooperate
with Pershing in implementing any such action as may be determined by Pershing
to be necessary or appropriate.  Broker acknowledges that Pershing may rely on a
third-party vendor to provide current OFAC and other government restricted list
data, and Pershing shall not be held liable for any errors or omissions caused
by such third-party vendor.
 
 
 
Page 11 of 35

--------------------------------------------------------------------------------

 
 
k.           Funds Transfer Rule and Travel Rule.  Pershing represents it has
systems designed to comply with the electronic transfer of funds rules,
specifically the “Funds Transfer Rule” and the “Travel Rule,” 31 C.F.R.
103.33(f) and (g), when processing disbursements on behalf of Broker.  Pershing
shall comply with these rules based on information provided by Broker.
 
8.3.6           Bulletins and Other Informational Memoranda.  Pershing shall
from time to time issue Bulletins or other informational memoranda to Broker
setting forth Pershing’s policies and procedures regarding anti-money laundering
and terrorist financing.  Pershing agrees to give Broker written notice of any
changes in such policies and procedures prior to their effectiveness and Broker
agrees to become familiar with such Bulletins and informational memoranda and to
abide by them.
 
8.3.7           Cooperation.  Consistent with Section 314(b) of the USA PATRIOT
Act and this Agreement, Broker and Pershing shall cooperate with each other and
exchange information to assist each other in detecting money laundering and
terrorist financing.  Broker and Pershing shall each submit to FinCEN the notice
set forth in 31 CFR Part 103.110(b)(2) and shall renew such notice each
year.  Each instance of information sharing shall constitute a confirmation by
Broker to Pershing and by Pershing to Broker that the requisite notice has been
filed.  Pershing and Broker agree to consult with each other from time to time
on each other’s anti-money laundering responsibilities.
 
8.3.8           No Party to Cause Violation by the Other.  Neither Pershing nor
Broker shall knowingly take any action to cause the other party to be in
violation of any anti-money laundering laws or regulations.
 

9.0            RECEIPT AND DELIVERY OF FUNDS AND SECURITIES

9.1            Receipt and Delivery of Funds and Securities.

9.1.1         Cashiering Functions.  Pershing shall perform cashiering functions
for accounts introduced by Broker.  These functions shall include receipt,
delivery and transfer of securities; receipt and payment of funds owed by or to
customers; and provision of custody for securities and funds; the handling of
margin accounts; the receipt and distribution of dividends and other
distributions; and the processing of exchange offers, rights offerings,
warrants, tender offers and redemptions.  Broker shall provide Pershing with the
data and documents that are reasonably necessary or appropriate to permit
Pershing to perform its obligations under this Paragraph, including but not
limited to copies of records documenting receipt of customers’ funds and
securities received directly by Broker.  Such data and documents must be
compatible with the requirements of Pershing’s data processing systems.  To the
extent Broker is unable to provide data and documents that are compatible with
the requirements of Pershing’s data processing systems, the parties agree to
attempt to resolve in good faith the provision of such information in a mutually
acceptable format.

9.1.2         Purchases.  Broker shall be responsible for purchases (including
transactions on a “when issued” basis) made for customers until actual and
complete payment has been received by Pershing.  Broker shall not introduce
accounts requiring settlement on a “delivery versus payment” or “receive versus
payment” basis unless such account utilizes the facilities of a securities
depository or qualified vendor as defined in FINRA Rule 387 for all depository
eligible transactions.
 
 

 
Page 12 of 35

--------------------------------------------------------------------------------

 
 
9.1.3         Sales.  Broker shall be responsible for sales (including those on
a “when issued” basis), until Pershing has received, in acceptable form, the
securities involved in the transaction.  If Pershing does not receive delivery
of securities in an acceptable form, Pershing may buy-in all or part of the
securities.

9.1.4         Funds and Securities Received by Broker.  Broker shall promptly
deposit with Pershing funds or securities received by Broker from its customers,
together with such information as may be relevant or necessary to enable
Pershing to record such remittances and receipts in the respective customer
accounts.

9.1.5         Failure to Settle or Pay.  In the event of a failure to timely
deposit required funds or securities, Pershing may take appropriate remedial
action.  Without waiving or otherwise limiting its right to take other remedial
action, Pershing may at its option charge interest at rates as agreed in
Schedule A (“Fully Disclosed Pricing Schedule”) to this Agreement.  Broker may
pass such charges on to its customers but Broker remains responsible therefor
until actually paid.

9.1.6        Check Writing Authority.  Pershing may, but is not required to,
authorize certain of Broker’s employees to sign checks to Broker’s customers for
amounts due to, and requested by them, with respect to their accounts.  Broker
shall designate, in writing, the names of any employees it wishes to receive the
authorization described in this Paragraph.  All checks must be signed by two
employees who have received written authorization from Pershing.  No check or
checks totaling more than $100,000 shall be provided to any customer by Broker
on the same business day.  All expenses incurred in connection with the issuance
of checks under the authority described in this Paragraph shall be charged to
Broker.  Broker remains responsible for the disbursement and delivery of such
checks to its customers.  Any lien on the customer’s property granted by the
customer to Broker or Pershing shall extend to any funds which may be segregated
in a separate account in connection with the exercise of the authority described
in this Paragraph.  Broker has established, and shall maintain and enforce,
supervisory procedures with respect to the issuance of such instruments as
required by applicable law or regulation.that are satisfactory to Pershing.

9.2           Restricted and Control Stock Requirements.  Broker shall be
responsible for determining whether any securities held in Broker’s or its
customer accounts are restricted or control securities as defined by applicable
laws, rules, or regulations.  Broker is responsible for assuring that orders and
other transactions executed for such securities comply with such laws, rules,
and regulations.

9.3           Corporate Action Requests/Soliciting Dealer Agreements.  Broker
requests and authorizes Pershing to execute as Broker’s agent-in-fact any and
all Soliciting Dealer Agreements (except as provided in Paragraph 13.8) for
corporate actions involving securities or other interests held by Broker’s
customers on the books of Pershing.  Pershing agrees to provide a written advice
of the pending corporate action to Broker at its designated locations.  Pershing
further agrees to collect and submit corporate action requests from Broker and
submit them to the soliciting party in accordance with the instructions received
from the soliciting party.  Pershing agrees to use commercially reasonable
efforts to communicate corporate action information to Broker and, where
applicable, Broker’s customers, but shall not be liable for a) any delays in the
communication of corporate action information or b) delays in the transmission
of collected corporate action requests to the soliciting party unless caused by
Pershing’s negligence.  All fees received from the soliciting party will be
credited to Broker.  In consideration of providing this service to Broker,
Broker agrees to indemnify and hold harmless Pershing, its affiliates, officers,
agents and employees from all claims, suits, investigations, damages and defense
costs (including reasonable attorney’s fees) that arise in connection with this
Paragraph, except to the extent that such claims, suits, investigations, damages
and defense costs result from the negligence of Pershing, its affiliates,
officers, agents and/or employees.
 

 
Page 13 of 35

--------------------------------------------------------------------------------

 
 
10.0         SAFEGUARDING OF FUNDS AND SECURITIES

Except as otherwise provided in this Agreement, Pershing shall be responsible
for the safekeeping of all money and securities received by it pursuant to this
Agreement.  However, Pershing will not be responsible for any funds or
securities delivered by a customer to Broker until such funds or securities are
actually received by Pershing or deposited in bank accounts maintained by
Pershing.
 
 
11.0         CONFIRMATIONS AND STATEMENTS

11.1         Preparation and Transmission of Confirmations and
Statements.  Pershing shall prepare confirmations and summary periodic
statements and shall, to the extent required by the Rules, transmit them to
customers and Broker in a timely fashion except to the extent the parties agree
in writing that Broker may transmit confirmations to customers.  Confirmations
and statements shall be prepared on forms disclosing that the account is carried
on a fully-disclosed basis for the Broker in accordance with applicable rules,
regulations, and interpretations.  Broker will have the ultimate responsibility
for compliance with the prospectus delivery requirements of the Securities Act
of 1933, as amended, regardless of its retention of a prospectus fulfillment
service (including as may be provided by Pershing) to perform delivery of same.

11.2         Examination and Notification of Errors.  Broker shall examine all
confirmations, statements, and other reports in whatever medium provided to
Broker by Pershing; provided however that if Broker is unable to examine such
reports in the provided medium, Broker and Pershing shall attempt to resolve the
issue in good faith .  Broker must notify Pershing of any error claimed by
Broker in any account; as to purchase and sales transactions prior to settlement
date and as to all other transactions within the time in which Pershing is able
to, without violating applicable law, reverse the transaction.  If Broker fails
to do so, Broker shall be deemed to have waived its right to make any claim
against Pershing with respect to such error.
 
 
12.0         ACCEPTANCE AND EXECUTION OF TRANSACTIONS

12.1         Responsibility to Accept or Reject Trades.  Pershing shall execute
transactions in customers’ accounts and release or deposit money or securities
to or for accounts only upon Broker’s instructions.  Pershing reserves the right
to accept written or oral transaction orders from Broker’s customers in
circumstances where it determines that either (i) the customers are unable to
execute those transactions through Broker or (ii) Pershing is required to do so
by applicable or relevant law.  Notwithstanding any instructions to the
contrary, Pershing may, after notifying Broker orally or in writing: (i) refuse
to confirm a transaction or cancel a confirmation; (ii) reject a delivery or
receipt of securities or money; (iii) refuse to clear a trade executed by
Broker; or (iv) refuse to execute a trade for the account of a customer or
Broker.

12.2         Responsibility for Errors in Execution.  Broker shall be
responsible for transmission to Pershing of all orders and for any errors in the
Broker’s recording or transmission of such orders.

12.3         Best Execution.  In accordance with the Rules, Pershing will
provide best execution on all transactions routed to the desk of Pershing or of
a Pershing affiliate.
 
 
13.0         OTHER OBLIGATIONS AND RESPONSIBILITIES OF BROKER
 
13.1         Disciplinary Action, Suspension, or Restriction.  If Broker or any
of the Broker Executives becomes subject to disciplinary action, suspension, or
restriction by a federal or state agency, stock exchange, or regulatory or
self-regulatory organization having jurisdiction over Broker or Broker’s
securities or commodities business, Broker shall give notice to Pershing
promptly in writing, and provide Pershing a copy of any decision relating to
such action, suspension, or restriction, unless such notice is prohibited by
law.  Pershing may take any action it reasonably deems to be necessary (i) to
assure that it will continue to comply with all applicable legal, regulatory,
and self-regulatory requirements, notwithstanding such action, suspension, or
restriction; and (ii) to comply with any requests, directives, or demands made
upon Pershing by any such federal or state agency, stock exchange, or regulatory
or self-regulatory organization.  Notwithstanding the foregoing, Broker need not
notify Pershing of “minor rule violations” (as that term is defined in
connection with Form U-5) of Broker or Broker Executives.
 
Page 14 of 35

--------------------------------------------------------------------------------

 
 
13.3         Provision of Financial Information.  Broker shall furnish Pershing
copies of FOCUS Reports, audited annual financial statements for the current
fiscal year, the executed Forms X-17a-5 (Parts I and IIA) filed with the SEC,
any material amendments to Broker’s Form BD, and any other material regulatory
or financial reports Pershing may from time to time reasonably require, unless
prohibited by law.  Broker shall provide such reports to Pershing at the time
Broker files such reports with its primary examining authority, or promptly
thereafter.

13.4         Executing Brokers.  If Broker wishes to act as an “Executing
Broker” as such term is understood in that certain letter dated January 25,
1994, from the Division of Market Regulation of the SEC, as the same may be
amended, modified or supplemented from time to time (the “No-Action Letter”),
then all terms herein shall have the same meaning as ascribed thereto either in
the Agreement or in the No-Action Letter as the sense thereof shall
require.  Broker may, from time to time, execute trades (either directly or
through Pershing) for Prime Brokerage Accounts in compliance with the
requirements of the No-Action Letter.  (The No-Action Letter requires, inter
alia, that a contract be executed between Pershing and Prime Broker, and between
Broker and Prime Brokerage Customer prior to the transaction of any business
hereunder.)  Broker shall promptly notify Pershing, but in no event later than
5:00 p.m. New York time, of trade date in a mutually acceptable fashion, of such
trades in sufficient detail for Pershing to be able to report and transfer any
trade executed by Broker on behalf of a Prime Brokerage Account to the relevant
Prime Broker.  Broker understands and agrees that if Prime Broker shall
disaffirm or “dk” any trade executed by Broker on behalf of a Prime Brokerage
Account, Broker shall open an account for such Prime Brokerage Account in its
range of accounts and shall transfer or deliver the trade to such account at the
risk and expense of Broker to the same extent as for any account introduced by
Broker pursuant to this Agreement.  Broker understands and agrees that all Prime
Brokerage Accounts shall be conducted in accordance with the requirements of the
No-Action Letter and any relevant agreement between Broker and a Prime Brokerage
Customer or between Pershing and relevant Prime Broker.  Broker further agrees
to supply Pershing with such documents, papers and things, which from time to
time are reasonably required by Pershing to carry out the intention of this
Paragraph.  Broker agrees that it shall know its customer, obtain appropriate
documentation, including new account form, conduct its own credit check and
determine the availability of shares as required for processing of any short
sales.  Broker shall maintain facilities to clear any disaffirmed trades.

13.5         Protection of Intellectual Property.  Each party shall use all
reasonable efforts to preserve and protect the other party’s and its affiliates’
patent, trade secret, copyright and other proprietary rights in such party’s or
its affiliates’ products, services, trademarks and tradenames, at least to the
same extent used by the party to preserve and protect its own proprietary data
or information and to notify the other party of any action by any third party
known by such party to constitute an infringement of the other party’s or any of
its affiliates’ proprietary rights and to cooperate with such party in
protecting such rights.  Without limiting the foregoing, and subject to the
permission required by Paragraph 22 hereof, Broker shall note Pershing’s or its
affiliates’ patent, trade secret, copyrights, trademarks and trade names when
Broker makes reference to or distributes products or services provided by
Pershing or its affiliates, as applicable.
 
 

 
Page 15 of 35

--------------------------------------------------------------------------------

 
13.6           Currency Fluctuation.  If Broker directs Pershing to enter into
any transaction to be effected on any securities exchange or in any market on
which transactions are settled in a foreign currency, (i) any profit or loss
arising as a result of a fluctuation in the rate of exchange between such
currency and the United States Dollar shall be entirely for Broker’s account and
risk, (ii) all initial and maintenance margin deposits required or requested by
Pershing shall be in the currency required by the applicable marketplace or
clearing agency in such amounts as Pershing in its sole discretion may require,
and (iii) Pershing is authorized to convert funds in the Account into and from
such foreign currency at rates of exchange prevailing at the banking or other
institutions (including affiliated financial institutions including The  Bank of
New York with which Pershing normally does business.)

13.7           Execution Away from Pershing.  Broker may place for execution
with firms other than Pershing orders for its customers’ accounts. Pershing will
have no responsibility for the transmission or execution of any such orders, and
Broker agrees to assume full responsibility for resolving any disputes and for
bearing any losses resulting from transactions with firms with which Broker
executes, giving up Pershing for clearance.  Broker also agrees that, with
respect to any such orders, it will report executions promptly to Pershing for
clearance in accordance with Pershing’s procedures.

13.8           Mutual Fund Shares.  Broker shall be responsible for obtaining
and executing dealer agreements with any principal underwriter for mutual funds
from which Broker seeks to purchase mutual fund shares for its Customers’
accounts.  Broker shall provide copies of such agreements to Pershing upon
Pershing’s request.
 
 
14.0           OTHER OBLIGATIONS AND RESPONSIBILITIES OF PERSHING

14.1           Use of Third-Party Services.  Pershing may, at its reasonable
option, and consistent with common industry practice, retain one or more
independent data processing or other service bureaus to perform functions
(including, but not limited to, pricing services or proxy mailing services)
assigned to Pershing under this Agreement.

14.2           Tax Withholding.  Broker hereby agrees to take necessary measures
to comply with the income tax withholding requirements of Section 3406 and
Sections 1441 through 1446 (the nonresident alien withholding  requirements) of
the Internal Revenue Code of 1986, as amended (“IRC”) with respect to its
customer accounts.  Broker agrees to furnish to Pershing any tax information,
e.g., taxpayer identification numbers and certifications provided by the
customer on IRS Forms W-8, W-8BEN, W-8IMY, W-8EXP, W-8ECI, W-9, or any
acceptable substitute in its possession relating to each customer account
transferred to Pershing and to each future customer account opened.  Broker
acknowledges that Pershing will rely on such information for purposes of
determining Pershing’s obligation to withhold federal income tax pursuant to
Sections 1441 through 1446 and 3406 of the Internal Revenue code.  Broker hereby
authorizes Pershing to employ any procedures permitted under applicable law or
regulation to achieve compliance with its withholding obligations under federal
income tax law.

14.3           Retirement Account Distributions.  For retirement accounts for
which Pershing makes designated distributions pursuant to Section 3405 of the
IRC or any successor provision thereto,  Broker shall (1) obtain customer
authorization to execute Form W-4P (or an acceptable substitute) on behalf of
such customer, and (2) electronically provide such Form W-4P or a copy thereof
to Pershing.
 
 
15.0           ORDER AUDIT TRAIL SYSTEM (OATS)

  Pursuant to FINRA Rules 6950 through 6957 (Order Audit Trail System (“OATS”)
Rules) and the OATS Reporting Technical Specifications, it is hereby agreed
between Broker and Pershing that Pershing shall synchronize Pershing system
clocks in accordance with the National Institute of Standards and Technology
clock and periodically monitor such clocks for performance within any deviation
time frame tolerance level permitted by the OATS Rules.
 
 
Page 16 of 35

--------------------------------------------------------------------------------

 
 
    Unless otherwise directed in writing by Broker, Pershing will record and
transmit to the FINRA, on Broker’s behalf, all order information that is
required to be recorded pursuant to the OATS Rules and the OATS Technical
Specifications (including any modifications thereto) (the “Order Information”)
for orders entered on or linked to Pershing’s proprietary electronic order entry
systems (including Trade Order Processing System, BrokerView Order Entry,
BrokerView Direct Order, NetExchange ProTM, NetExchange ClientTM, Telexchange
ProTM, and Telexchange ClientTM and any other electronic order entry system as
Pershing may develop and implement from time to time) (collectively “the
Front-End Products”) and routed to a market using Pershing’s routing
routine.  Pershing will also record and transmit to the FINRA information that
is received via the Front-End Products by Pershing in connection with
modification or cancellation of any Order Information previously entered into
the system.
 
   Unless specifically agreed to in writing, Pershing will not capture
information or transmit Order Information for orders that are not entered on the
Front-End Products or called in for execution or where Pershing does not
determine the order routing routine.
 
   For trades not entered on Front-End Products, Broker is responsible for
providing information necessary for Pershing to report on Broker’s
behalf.  Broker agrees that Pershing may pass any out-of-pocket costs associated
with development and/or maintenance of this system on to Broker.
 
   Broker acknowledges and agrees that Pershing shall not be responsible for any
Order Information that is not received by Pershing.
 
   Pershing shall be responsible for repairing any rejections of OATS data it
receives or is made aware of for data Pershing previously reported to the OATS
reporting authorities.  Broker agrees to notify Pershing of any rejection of
OATS data that it receives or is made aware of for data previously reported to
the OATS reporting authorities by Pershing.
 
   Notwithstanding the foregoing, nothing contained herein shall relieve Broker
of its reporting obligations under paragraph (c)(3) of OATS Rule 6955.
 
 
16.0     TRANSMISSION OF ORDERS TO PERSHING AS PRIME BROKER

16.1     General Broker Functions.  Broker may, from time to time, collect and
transmit to Pershing orders and other instructions to Pershing from Broker’s
prime brokerage customers (“Prime Brokerage Orders”) and provide Pershing with
such reports, data and services as Pershing requires in order to act as prime
broker with respect to such Prime Brokerage Orders, consistent with the SEC
No-Action Letter dated January 25, 1994 (“No-Action Letter”) and applicable
rules and regulations.

16.2     Trading Activity Functions.  Broker shall perform the following
functions as introducing firm for its prime brokerage customers:

a.  
Report all trading activity for the accounts of Broker’s prime brokerage
customers (whether executing with Pershing or away) to Pershing via iPartner,
NetExchange Advisor (or other agreed upon method) on trade date by a time to be
determined by Pershing and Broker from time to time.

b.  
Assure that access to iPartner is limited to authorized persons only.

c.  
Accept, via electronic mail (or telephone) on T+1, information regarding all
trade breaks and respond to the Investment Management Services (“PIMS”) group of
Pershing regarding resolution of such trade breaks by 12:00 noon (NYC time) on
T+1.

d.  
Obtain pre-approval from Pershing for any short sales directed by Broker’s prime
brokerage customers.

e.  
Provide all information to Pershing related to the eligibility of any of
Broker’s customers to receive or to continue to receive prime brokerage
services.

Page 17 of 35

--------------------------------------------------------------------------------

 
 
16.3     Other Prime Brokerage Functions.  Broker shall perform the following
additional functions as introducing firm for its prime brokerage customers:

a.  
Obtain and deliver to Pershing an executed Prime Brokerage Client Agreement in
substantially the form provided by Pershing to Broker, for each prime brokerage
customer of Broker.

b.  
Obtain and deliver to Pershing an executed Prime Brokerage Investment Advisor
Agreement in substantially the form provided by Pershing to Broker, for any
investment advisor with discretion over an account of a prime brokerage customer
of Broker (the “Investment Advisor”).

 
           c.
Deliver to Pershing for acceptance or rejection the name of, and any information
requested by Pershing regarding, each Executing Broker that Broker proposes to
utilize to execute prime brokerage trades.  Broker acknowledges that Pershing
does not select any Executing Broker, and makes no representation regarding the
financial condition or ability of any Executing Broker.

d.  
Obtain and deliver to PIMS an executed Schedule A for each prime brokerage
agreement between Pershing (as Prime Broker) and each Executing Broker accepted
by Pershing, showing each prime brokerage customer of Broker for whose Account
Prime Brokerage Orders will be placed and, thereafter, deliver to PIMS executed
Forms 1 to Schedule A to reflect additions and deletions of prime brokerage
customers as appropriate.

e.  
Perform any other functions reasonably requested by Pershing to facilitate
Pershing’s performance of the prime brokerage services hereunder and as
contemplated by the No-Action Letter.

16.4     Broker Acknowledgements Regarding Prime Brokerage.  Broker acknowledges
that Pershing may disaffirm or DK transactions of any prime brokerage customers
of Broker.  Broker will be responsible for resolving all unmatched items, and
advising PIMS of their status in a timely manner.  Broker acknowledges that PIMS
shall monitor the net equity of accounts of Broker’s prime brokerage customers
carried by Pershing, and shall notify Broker who in turn shall notify the
relevant prime brokerage customers on Broker’s letterhead whenever such
customers’ net equity falls below the minimum required by Pershing.  If an
account falls below the minimum net equity set by Pershing, the account will not
be permitted to place any further Prime Brokerage Orders until the net equity is
increased to the level required by Pershing.  Broker agrees to provide access to
its personnel and records, and submits to the supervision of Pershing for the
purpose of complying with Pershing’s obligations as Prime Broker under the
No-Action Letter and applicable laws, rules and regulations in relation to the
provision of the prime brokerage services.

16.5     Compensation.  In consideration of Pershing acting as Prime Broker,
Broker agrees to pay the amounts set forth in Schedule A hereto.

16.6     Limitation of Liability.  Except as otherwise provided in Section 18 of
this Agreement, Broker acknowledges and agrees that:

a.  
Pershing accepts no responsibility for the Prime Brokerage Orders received from
the Broker via iPartner (or other agreed upon method) except in the event of
gross negligence or willful misconduct by Pershing or its employees.

b.  
Pershing accepts no responsibility and disclaims all liability for any
communication linkage failure associated with the transmittal of Prime Brokerage
Orders except in the event of gross negligence or willful misconduct by Pershing
or its employees.

c.  
Pershing is not responsible for fraudulent or unauthorized access to iPartner
that may cause any loss, damage or liability to Broker, Pershing, Broker’s prime
brokerage customers, or a third party.

d.  
Any notice by Pershing hereunder or as required to perform prime brokerage
services to prime brokerage customers of Broker shall be made to Broker, whether
on Broker’s behalf or on behalf of such customers.  Any notice made to Broker
shall be deemed to be made to, or done for, Broker’s prime brokerage customers,
as applicable.  Broker shall be responsible for all communication with Broker’s
prime brokerage customers regarding all services to be performed
hereunder.  Pershing is not responsible for communication failure between Broker
and Broker’s prime brokerage customers.

e.  
In connection with this Paragraph 16.6, Pershing disclaims liability not only
for direct damages to the Broker, Pershing, Broker’s prime brokerage customers
or a third party, but in addition disclaims any and all liability for special,
indirect or consequential or incidental damages whether in tort or in contract
even if Pershing has been advised of the possibility of such damage except in
the event of gross negligence or willful misconduct by Pershing or its
employees.

 
 
Page 18 of 35

--------------------------------------------------------------------------------

 
 
16.7           No Joint Venture.  Nothing contained in the Agreement (i) shall
constitute Pershing and Broker as members of any partnership, joint venture,
association, syndicate, unincorporated business or other separate entity, (ii)
shall be construed to impose any liability as such on any of them or (iii) shall
be deemed to confer on any of them any express, implied or apparent authority to
incur any obligation or liability on behalf of the others.

16.8           Representations and Warranties.  In addition to, and no way in
limitation of, Broker’s representations and warranties as contained elsewhere in
this Agreement, Broker represents and warrants that:

 
a.
Broker has been duly appointed and authorized by Broker’s prime brokerage
customers to transmit Prime Brokerage Orders to Pershing.

 
b.
All Broker’s customers whose accounts will participate in prime brokerage
activities have been advised, via client agreements or otherwise, that their
accounts will engage in prime brokerage activities, Pershing will act as Prime
Broker for their accounts, and said customers or the Investment Advisor thereof
may place orders for the execution of trades for their accounts at Executing
Brokers, all in conformity with applicable provisions of the No-Action Letter.

 

17.0           DAMAGES

As between the parties, neither party shall be liable for special, indirect,
incidental, consequential or punitive damages, whether such damages are incurred
or experienced as a result of entering into or relying on this Agreement or
otherwise, even if the parties have been advised of the possibility of such
damages.  Broker and Pershing each agree not to assert any claim for punitive
damages against the other.
 
 
 
 
Page 19 of 35

--------------------------------------------------------------------------------

 
18.0           LIABILITY

18.1           Liability of Pershing

18.1.1                      Disclaimer of Warranties.   Broker expressly agrees
that Broker’s use of Pershing’s Services, including the Systems as defined by
Paragraph 30.1 and software products as defined herein, is at Broker’s sole
risk.  Except as otherwise provided in this Agreement, neither Pershing nor any
of its directors, officers, employees, agents, contractors, affiliates,
information providers, licensors, or other suppliers providing data,
information, services or software, including but not limited to the FINRA,
warrants that the services will be uninterrupted or error free; nor do any of
them make any warranty as to the results that may be obtained from the use of
the services or as to the timeliness, sequence, accuracy, completeness,
reliability or content of any data, information, services, or transactions
provided and Pershing shall not be responsible for any losses liabilities or
damages caused by the acts or omissions of those third party agents,
contractors, information providers or other suppliers beyond any amount which
Pershing is able to recover pursuant to its agreement with such entity.  Except
as specifically set forth in this Paragraph 18.1, Pershing’s services are
provided on an “as is,” “as available” basis, without warranties of any kind,
either express or implied, including, without limitation, those of
merchantability, fitness for a particular purpose, and non-infringement, other
than those warranties which are implied by and incapable of exclusion,
restriction or modification under the laws applicable to this Agreement.

18.1.2                      Pershing Indemnification.  In addition to any other
obligations it may possess under other provisions of this Agreement, Pershing
shall indemnify, defend, and hold harmless Broker and any controlling person of
Broker, from and against all allegations, claims, demands, proceedings, suits
and  actions (“Claims”) and all liabilities, expenses, reasonable attorney’s
fees (including fees and costs incurred in enforcing Broker’s right to
indemnification), and costs in connection therewith arising out of any
negligent, reckless, dishonest, fraudulent, or criminal act or omission on the
part of any of Pershing’s officers or employees or contractor agents performing
job typically done by employees (“Contractor Agents”) with respect to the
services provided by Pershing under this Agreement.

18.1.3                      Right to Compete.  Nothing in this Agreement shall
be deemed to restrict in any way the right of either party or any affiliate to
compete with the other party in any or all aspects of the other party’s
business.

18.2           Liability of Broker

18.2.1                      Broker Indemnification.  In addition to any other
obligations it may possess under other provisions of this Agreement, Broker
shall indemnify, and hold harmless Pershing, and any controlling person of
Pershing, from and against all allegations, claims, demands, proceedings, suits,
and actions (“Claims”) and all liabilities, expenses, attorney’s fees (including
fees and costs incurred in enforcing Pershing’s right to indemnification), and
costs in connection therewith arising out of one or more of Broker’s or any of
its contractor agent’s or employee’s negligent, dishonest, fraudulent, or
criminal act, or omission including related to the following:

18.2.1.1                                Failure to Make Payment or Deliver
Securities.   A check received by Pershing from a customer shall not constitute
payment until it has been paid and the proceeds are actually received and
finally credited to Pershing (without any subsequent charge back) by its bank.

18.2.1.2                                Margin Calls.  Failure of a customer to
meet any initial margin call or any maintenance call, except that Pershing shall
be responsible for the portion of any such loss or damage that was attributable
to Pershing’s failure to give notification to Broker as required in Paragraph
7.3.2 of this Agreement.
 
 

 
Page 20 of 35

--------------------------------------------------------------------------------

 
 
18.2.1.3                                Broker’s Failure to Perform.  Failure of
Broker to perform in a material respect any duty, obligation, or responsibility
with respect to customer accounts as set forth in this Agreement.  Broker’s
indemnification obligation under this Paragraph shall not be affected by the
participation of Pershing or any person controlling it or controlled by it
within the meaning of the Securities Exchange Act of l934, as amended, in any
transaction giving rise to such an obligation, unless such participation
constitutes negligence, recklessness, fraud, or criminal conduct.

18.2.1.4                                Improper Conduct by Agents.  Any
negligent, dishonest, fraudulent, or criminal act or omission on the part of any
of Broker’s officers, directors, employees, or agents.

18.2.1.5                                Failure of a Customer to Perform
Obligations.  Any failure by any of Broker’s customers to perform any commitment
or obligation with respect to a transaction carried by Pershing under this
Agreement.

18.2.1.6                                Customer Claims and Disputes.  Except to
the extent such claim or dispute relates to the negligent, reckless, dishonest,
fraudulent, or criminal act or omission on the part of any of Pershing’s
officers or employees or contractor agents, any claim or dispute between Broker
and a customer with respect to services provided under this Agreement,
including, but not limited to, any claim or dispute concerning the validity of a
customer order in the form the order was transmitted to Pershing by Broker and
any claim arising in connection with Pershing’s guarantee of any signature of
any customer of Broker or at the request of Broker.

18.2.1.7                                Warranties.  Any adverse claim with
respect to any security delivered or cleared by Pershing, including a claim of a
defect in title with respect to securities that are alleged to have been forged,
counterfeited, raised or otherwise altered, or if they are alleged to have been
lost or stolen.  The parties agree that Pershing shall be deemed to be an
intermediary between Broker and customer and shall be deemed to make no
warranties other than as provided in Section 8-306(3) of the Uniform Commercial
Code.

18.2.1.8                                Default of Third-Party Broker.  Any
default by a third-party broker with whom the Broker deals on a principal or
agency basis in a transaction either not executed by Pershing or not cleared by
Pershing.

18.2.1.9                                Check Signing.  Any negligence, fraud,
malfeasance, or error of any employee of Broker with respect to the use of the
check-signing authority granted under Paragraph 9.1.6 of this Agreement.

18.2.1.10              Prior Self-Clearing Arrangements.  Any guarantee,
indemnification, or hold harmless agreement in connection with Broker’s business
or customers that Pershing may provide to the National Securities Clearing
Corporation, the Depository Trust Company, or any other clearing, depository, or
self-regulatory organization with respect to transactions self-cleared by Broker
prior to transfer of such functions to Pershing.

18.2.1.11              Breach of Warranty by Broker.  Any breach by Broker in a
material respect of any material representation or warranty made by it under
this Agreement.

18.2.1.12                              Deposit of Checks to Customer
Accounts.  Any failure to exercise due diligence in reviewing checks received
from customers to ensure that same are in proper form, or in the issuance of
instructions to Pershing regarding the accounts into which checks are to be
deposited.

18.2.1.13                              Infringement of Intellectual Property
Rights.  Any act or omission of Broker, its agents or  employees which infringes
on any patent, trade secret, copyright, trademark, or other intellectual
property right of Pershing or any violation of the terms set forth in Paragraph
30 hereof.
 
 
Page 21 of 35

--------------------------------------------------------------------------------

 
 
18.2.1.14                              Misuse of Passwords and Unauthorized
Access.  The misuse, loss or unauthorized access to the Systems and Software
Products using the Identification Devices (as that term is defined in Paragraph
30.1 of this Agreement) provided to Broker or its customers.

18.2.2  
Defense of Claims by Broker.  Broker will institute defense against any Claims
at the sole expense of Broker and using counsel reasonably acceptable to
Pershing.  Broker will keep Pershing informed of the status of the defense of
such Claims, and Broker will not agree to any settlement without consent of
Pershing, which consent will not be unreasonably withheld.  Notwithstanding the
foregoing, Pershing will have the right to assume the defense of such Claims at
the sole expense of Broker if  (i) Broker has not employed counsel to conduct
the defense of Pershing and (ii) Pershing shall have reasonably concluded that,
as between Pershing and Broker, there may be a conflict of interest requiring
separate counsel or counsel selected is not competent to represent Pershing.

18.2.3  
Defense of Claims by Pershing. Pershing will institute defense against any
claims against Broker for Pershing’s actions requiring indemnity under section
18.1.2 at the sole expense of Pershing and using counsel reasonably acceptable
to Broker. (i) If Pershing has not employed counsel to conduct the defense of
Broker and (ii) Broker shall have reasonably concluded that, as between Broker
and Pershing, there may be a conflict of interest requiring separate counsel or
counsel selected is not competent to represent Broker.

19.0           FEES AND SETTLEMENTS FOR SECURITIES TRANSACTIONS

19.1           Commissions.  Pershing shall charge each of Broker’s customers
the commission, markup, and any other charge or expense that Broker instructs it
to charge for each transaction.  If instructions are not received with respect
to a transaction in the time period required by Pershing to implement those
instructions, Pershing shall charge the customer the commission, markup, or
other charge or expense prescribed in the basic commission schedule delivered to
Pershing by Broker.  This basic schedule may be amended from time to time by
Broker by written instructions delivered to Pershing.  Pershing shall only be
required to implement such amendments to the basic schedule to the extent such
amendments are within the capabilities of Pershing’s data processing and
operations systems and only within such reasonable time limitations as Pershing
may deem necessary to avoid disruption of its normal operating capabilities.

19.2           Miscellaneous Charges.  Broker agrees to pay Pershing the fees
and charges described in Schedule A hereto.  Notwithstanding the foregoing,
Broker may instruct Pershing to pass through such fees to Broker’s customers.

19.3           Fees for Clearing Services.  As compensation for services
provided pursuant to this Agreement, Pershing shall deduct from the commissions,
mark-up, mark-down, or fees charged Broker’s customers the amounts set forth in
the fully-disclosed pricing schedule attached hereto as Schedule A.

20.0           DEPOSIT ACCOUNT

20.1           Establishment of Deposit Account.  To further assure Broker’s
performance of its obligations under this Agreement, including but not limited
to its indemnification obligations under Paragraph 18, Broker shall, on or
before the execution of this Agreement, establish an account at Pershing to be
designated as the Broker’s Deposit Account (the “Deposit Account”).  The Deposit
Account shall not represent an ownership interest by Broker in Pershing.  The
Deposit Account shall at all times contain cash, securities, or a combination of
both, having a market value of at least the amount set forth in Schedule A.  The
securities placed in the Deposit Account shall consist only of direct
obligations issued by or guaranteed as to principal and interest by the United
States Government.  In the event of a material adverse change in the nature and
extent of Broker’s business operations, Pershing may require that an additional
amount be deposited promptly in the Deposit Account upon reasonable prior
written notice to Broker.  If such a deposit is not made in the amount specified
within a reasonable time period after Broker’s receipt of notice of the
increase, whether or not Broker agrees that the amount is justified under this
Paragraph, Pershing may terminate this Agreement forthwith.
 

 
Page 22 of 35

--------------------------------------------------------------------------------

 
 
20.2           Pershing’s Right to Offset.  If (i) Pershing shall have any claim
against Broker or a customer of Broker which has not been resolved within ten
business days after Pershing presents such claim to Broker; or (ii) if Pershing
shall suffer any loss or incur any expense for which it is finally judicially
determined that it is entitled to be indemnified pursuant to this Agreement, and
Broker shall fail to make such indemnification within ten  business days after
being requested to do so, Pershing may deduct the amount of such claim, loss, or
expense from any account of Broker.  Pershing may withdraw cash or securities
(or both) having a market value equal to the amount of such claimed
deficiency.  If those funds are withdrawn from the Deposit Account, then Broker
shall be obligated to make a prompt deposit in the Deposit Account of cash or
securities sufficient to bring the Deposit Account back to a value of at least
the amount required by Schedule A.  Pershing shall give prior written advice to
Broker of all deductions from the Deposit Account made hereunder.

20.3           Termination of Deposit Account.  Within thirty (30) days of
termination of this Agreement, Pershing shall pay and deliver to Broker, the
funds and securities in the Deposit Account, less any amounts to which it is
entitled under the preceding Paragraph; provided, however, that Pershing
may:  (i) retain the Deposit Account for such period of time until transfer of
all customer and proprietary accounts of Broker has been completed and (ii)
retain in the Deposit Account such amount for such period as it deems reasonably
appropriate for its protection from any claim or proceeding of any type, then
pending or threatened, until the final determination of such claim or proceeding
is made.  If a threatened claim or proceeding is not resolved or if a legal
action or proceeding is not instituted within a reasonable time after the
termination of this Agreement, any amount retained with respect to such claim,
proceeding, or action shall be paid or delivered to Broker.

21.0         PROPRIETARY ACCOUNTS OF INTRODUCING BROKERS AND DEALERS (PAIB)

Pershing shall establish a separate reserve account for proprietary assets held
by Broker so that Broker can treat these assets as allowable assets under SEC
Rule
15c3-1.  Pershing agrees to perform the required computation on behalf of Broker
in accordance with the following provisions, procedures, and interpretations set
forth in the SEC’s No-Action Letter regarding Proprietary Accounts of
Introducing Brokers and Dealers (PAIB) dated November 3, 1998 (the “No-Action
Letter”):

21.1         Pershing will perform a separate computation for PAIB assets (PAIB
reserve computation) of Broker in accordance with the customer reserve
computation set forth in SEC Rule 15c3-3 (customer reserve formula) with the
following modifications:

a.             Any credit (including a credit applied to reduce a debit) that is
included in the customer reserve formula will not be included as a credit in the
PAIB reserve computation;

b.             Note E(3) to Rule 15c3-3a, which reduces debit balances by one
percent under the basic method and subparagraph (a)(1)(ii)(A) of Rule 15c3-1,
which reduces debit balances by three percent under the alternative method, will
not apply; and

c.             Neither Note E(I) to Rule 15c3-3a nor NYSE Interpretation /04 to
Item 10 of Rule 15c3-3a regarding securities concentration charges is applicable
to the PAIB reserve computation.
 
 
Page 23 of 35

--------------------------------------------------------------------------------

 
 
21.2         PAIB reserve computation will include all the proprietary accounts
of Broker. All PAIB assets will be kept separate and distinct from customer
assets under the customer reserve computation set forth in SEC Rule 15c3-3.

21.3         PAIB reserve computation will be prepared within the same time
frames as those prescribed by Rule 15c3-3 for the customer reserve formula.

21.4         Pershing will establish and maintain a separate “Special Reserve
Account for the Exclusive Benefit of PAIB Customers” with a bank in conformity
with the standards of Rule 15c3-3(f) (PAIB Reserve Account). Cash and/or
qualified securities as defined in the Rule will be maintained in the PAIB
Reserve Account in an amount equal to the PAIB reserve requirement.

21.5         If the PAIB reserve computation results in a deposit requirement,
the requirement can be satisfied to the extent of any excess debit in the
customer reserve formula of the same date.  However, a deposit requirement
resulting from the customer reserve formula cannot be satisfied with excess
debits from the PAIB reserve computation.

21.6         Within two business days of entering into this Agreement, Broker
shall notify its designated examining authority (“DEA”) in writing that it has
entered into a PAIB agreement with its clearing broker-dealer.

21.7         Upon discovery that any deposit made to the PAIB Reserve Account
did not satisfy its deposit requirement, Pershing will immediately notify its
DEA and the SEC by facsimile or telegram.  Unless a corrective plan is found to
be acceptable by the SEC and the DEA, Pershing will provide written notification
within five business days of the date of discovery to Broker that PAIB assets
held by Pershing will not be deemed allowable assets for net capital
purposes.  The letter will also state that if the Broker wishes to continue to
count its PAIB assets as allowable, it has until the last business day of the
month following the month in which notification was made to transfer all PAIB
assets to another clearing broker.  However, if the deposit deficiency is
remedied before that time at which Broker must transfer its PAIB assets to
another clearing broker, the Broker may choose to keep its assets at Pershing.

21.8  
   To the extent applicable, commissions receivable and other receivables of
Broker from Pershing (excluding clearing deposits) that are otherwise allowable
assets under the net capital rule are not to be included in the PAIB reserve
computation, provided the amounts have been clearly identified as receivables on
the books and records of the Broker and as payables on the books of Pershing.

   

21.9  
   The parties shall adhere to the terms of the No-Action Letter, including the
interpretation set forth therein, in all respects.

22.0         COMMUNICATION

22.1         Notice to Customers.  Pershing shall, upon the opening of an
account pursuant to Paragraph 5 of this Agreement, mail to each customer a copy
of the notice to customers required by NYSE Rule 382(c).

22.2         Customer Complaint Reporting and Customer Notification.  Broker
authorizes and instructs Pershing to forward promptly, to the extent required by
applicable law or regulation, any written customer complaint received by
Pershing regarding Broker and/or its associated persons relating to functions
and responsibilities allocated to Broker under this Agreement to a) Broker and
b) Broker’s DEA designated under Section 17 of the Securities and Exchange Act
of 1934, as amended, or, if none, to Broker’s appropriate regulatory agency or
authority.  Further, to the extent required by applicable law or regulation,
Broker authorizes Pershing to notify the customer, in writing, that Pershing has
received the complaint, and the complaint has been forwarded to the Broker and
the Broker’s DEA (or, if none, to the appropriate regulatory agency).
 
 
Page 24 of 35

--------------------------------------------------------------------------------

 
 
22.3           Restriction on Advertising.  Except as may be required by law,
neither Pershing nor Broker shall utilize the name of the other in any way
without the other’s prior written consent except to disclose the relationship
between the parties.  Neither party shall employ the other’s name in such a
manner as to create the impression that the relationship between them is
anything other than that of clearing broker and introducing broker.  Broker
shall not hold itself out as an agent of Pershing or as a subsidiary or company
controlled directly or indirectly by or affiliated with Pershing except as
provided in this Paragraph.

22.4           Linking Between Sites.  Without express written authorization,
neither party may provide or allow an electronic hyperlink directly from its
service or site on the Internet or another site over which that party has
control to the service or site on the Internet of the other party.

23.0           TERMINATION OF AGREEMENT

  This Agreement shall continue until terminated as hereinafter provided:

23.1           Termination upon 90-Day Notice.  This Agreement may be terminated
by either party without cause upon ninety days prior notice.  If either party
terminates the Agreement pursuant to this Paragraph, Pershing shall have the
right to impose reasonable limitations upon Broker’s activities during the
period between the giving of Notice and the transfer of Broker’s accounts.

23.2           Termination upon 60-Day Notice.  Either party may terminate this
Agreement upon sixty days prior written notice to the other party in the event
that: (i) the other party breached a material provision of this Agreement and
such breach, if curable, shall continue without remedy for a period of 10 days
after written notice from the non-defaulting party is transmitted in accordance
with Section 26 of this Agreement, (ii) any material representation, warranty or
covenant of the other party in this Agreement is false or misleading in any
material respect; (iii) any of Broker Executives, is enjoined, prohibited,
disciplined or suspended as a result of administrative or judicial proceedings,
or proceedings of a self-regulatory organization of which Broker is a member,
from engaging in securities business activities constituting all or material
portions of Broker’s securities business

23.3           Immediate Termination.  This Agreement may be terminated by
Pershing or Broker immediately in the event that (a) the other party is
enjoined, disabled, suspended, prohibited, or otherwise becomes unable to engage
in the securities business or any part of it by operation of law or as a result
of any administrative or judicial proceeding or action by the SEC, any state
securities law administrator, or any regulatory or self-regulatory organization
having jurisdiction over such party or (b) the other party (i) becomes or is
declared insolvent; (ii) voluntarily files or is the subject of, a petition
commencing a case under any chapter of Title 11 of the United States Code; (iii)
makes a general assignment for the benefit of its creditors; (iv) Pershing is
enjoined , prohibited or suspended as a result of administrative or judicial
proceedings, or proceedings of a self – regulatory organization of which
Pershing is a member, from engaging in securities business activities
constituting all or material portions of Pershing’s securities business.(vi)
files an application or consents to the appointment of, or there is appointed,
any receiver, or a permanent or interim trustee of that party or any of its
subsidiaries, as the case may be, or all or any portion of its property,
including, without limitation, the appointment or authorization of a trustee,
receiver or agent under applicable law or under a contract to take charge of its
property for the purpose of enforcing a lien against such property or for the
purpose of general administration of such property for the benefit of its
creditors; (vii) files a petition seeking a reorganization of its financial
affairs or to take advantage of any bankruptcy, reorganization, insolvency,
readjustment of debt, dissolution or liquidation law or statute or files an
answer admitting the material allegations of a petition filed against it in any
proceeding under any such law or statute; or (viii) takes any corporate action
for the purpose of effecting any of the foregoing, in each of the foregoing
instances, the particular petition or order is not dismissed within 30 calendar
days after such filing.
 
 
Page 25 of 35

--------------------------------------------------------------------------------

 
 
23.4           Conversion of Accounts.  In the event that this Agreement is
terminated for any reason, Broker shall arrange for the conversion of Broker’s
and its customer accounts to another clearing broker or to Broker if it becomes
self-clearing.  Broker shall give Pershing Notice (the “Conversion Notice”) of:
(i) the name of the broker that will assume responsibility for clearing services
for Customers and Broker; (ii) the date on which such broker will commence
providing such services; (iii) Broker’s undertaking, in form and substance
satisfactory to Pershing, that Broker’s agreement with such clearing broker
provides that such clearing broker will accept on conversion all Broker and
customer accounts then maintained by Pershing; and (iv) the name of an
individual or individuals within new clearing broker’s organization whom
Pershing may contact to coordinate the conversion.  The Conversion Notice shall
accompany Broker’s notice of termination given pursuant to this Paragraph.  If
Broker fails to give Conversion Notice to Pershing, Pershing may notify Broker’s
customers as Pershing deems appropriate of the termination of this Agreement and
may make such arrangements as Pershing deems appropriate for transfer or
delivery of customer and Broker accounts.  In such event, the expense of
notifying those customers and making such arrangements shall be charged to
Broker.

23.5           Survival.  Termination of this Agreement in any manner shall not
release Broker or Pershing from any liability or responsibility with respect to
any representation or warranty or transaction effected on the books of Pershing.

[23.6          Termination Fee.  Unless otherwise agreed in writing by Broker
and Pershing, if Broker terminates this Agreement pursuant to Paragraph 23.1
above, or Pershing terminates this Agreement pursuant to Paragraph 23.2 or 23.3
within the period specified in Schedule A, Broker shall pay to Pershing a
termination fee and will reimburse Pershing for Deconversion Expenses as stated
in Schedule A].

23.7           Termination Under S.I.P.A.  In the event that Broker is the
subject of the issuance of a protective decree pursuant to the Securities
Investor Protection Act of 1970 (15 U.S.C. § 78aaa-111), Pershing’s claim for
payment of a termination fee under this Agreement shall be subordinate to claims
of Broker’s customers that have been approved by the Trustee appointed by the
Securities Investor Protection Corporation pursuant to the issuance of such
protective decree.

24.0           CONFIDENTIALITY

24.1           “Confidential Information” of a party shall mean all data and
information submitted to the other party or obtained by the other party in
connection with the services, including information relating to a party’s
customers (which includes, without limitation, Non-Public Personal Information
as that term is defined in Securities and Exchange Commission Regulation S-P),
technology, operations, facilities, consumer markets, products, capacities,
systems, procedures, security practices, research, development, business
affairs, ideas, concepts, innovations, inventions, designs, business
methodologies, improvements, trade secrets, copyrightable subject matter and
other proprietary information.

24.2           All Confidential Information relating to a party shall be held in
confidence by the other party to the same extent and in at least the same manner
as such party protects its own confidential or proprietary information.  Neither
party shall disclose, publish, release, transfer or otherwise make available
Confidential Information of the other party in any form to, or for the use or
benefit of, any person or entity without the other party’s consent.  Each party
shall, however, be permitted to disclose relevant aspects of the other party’s
Confidential Information to its officers, agents, subcontractors and employees
to the extent such disclosure is reasonably necessary for the performance of its
duties and obligations under this Agreement and such disclosure is not
prohibited by Gramm-Leach-Bliley Act of 1999 (“GLBA”), which amends the
Securities and Exchange Act of 1934, as it may be amended from time to time, the
regulations promulgated by the Securities and Exchange Commission thereunder or
other applicable law; provided, however, that such party shall take all
reasonable measures to ensure that Confidential Information of the other party
is not disclosed or duplicated in contravention of the provisions of this
Agreement by such officers, agents, subcontractors and employees.  The
obligations in this Paragraph shall not restrict any disclosure by either party
pursuant to any applicable law, or by order of any court or government agency
(provided that the disclosing party shall give prompt notice to the
non-disclosing party of such order to the extent such notice is not prohibited
by such order) and shall not apply with respect to information which (i) is
developed by the other party without violating the disclosing party’s
proprietary rights; (ii) is or becomes publicly known (other than through
unauthorized disclosure); (iii) is disclosed by the owner of such information to
a third party free of any obligation of confidentiality; (iv) is already known
by such party without an obligation of confidentiality other than pursuant to
this Agreement or any confidentiality agreements entered into between the
parties before the effective date of this Agreement; or (v) is rightfully
received by a party free of any obligation of confidentiality.  If the GLBA, the
regulations promulgated by the Securities and Exchange Commission thereunder or
other applicable law now or hereafter in effect imposes a higher standard of
confidentiality to the Confidential Information, such standard shall prevail
over the provisions of this Paragraph.
 

 
Page 26 of 35

--------------------------------------------------------------------------------

 
 
24.3           Broker acknowledges that the services Pershing provides hereunder
involve Broker access to proprietary technology, trading and other systems, and
that techniques, algorithms and processes contained in such systems constitute
trade secrets and shall be safeguarded by Broker, and that Broker shall exercise
reasonable care to protect Pershing’s interest in such trade secrets.  Broker
agrees to make the proprietary nature of such systems known to those of its
consultants, staff, agents or clients who may reasonably be expected to come
into contact with such systems.  Broker agrees that any breach of this
confidentiality provision may result in its being liable for damages as provided
by law.

24.4           Paragraphs 24.1 through 24.3 shall survive the termination of
this Agreement.

25.0           ACTION AGAINST CUSTOMERS BY PERSHING

Pershing may, in its sole discretion and at its own expense and, upon written
notice to Broker, institute and prosecute in its name any action or proceeding
against any of Broker’s customers in relation to any controversy or claim
arising out of Pershing’s transactions with Broker or with Broker’s
customers.  Nothing contained in this Agreement shall be deemed either (i) to
require Pershing to institute or prosecute such an action or proceeding; or (ii)
to impair or prejudice its right to do so, should it so elect, nor shall the
institution or prosecution of any such action or proceeding relieve Broker of
any liability or responsibility which Broker would otherwise have had under this
Agreement.  Broker assigns to Pershing its rights against its customer as
necessary to effectuate the provisions of this Paragraph.

26.0           NOTICES

Any Notice required or permitted to be given under this Agreement shall be
sufficient only if it is in writing and sent by hand or by certified mail,
return receipt requested, to the parties at the following address:

Broker:

Broadpoint Securities, Inc.
One Penn Plaza, 42d Floor
New York, New  York  10119
Attn: Rob Fine, President
Cc:  General Counsel

Pershing:

Pershing LLC
One Pershing Plaza
Jersey City, NJ  07399
Attn:  Mr. Michael Row, Managing Director
cc:      Legal Department
 

 
Page 27 of 35

--------------------------------------------------------------------------------

27.0           ARBITRATION

27.1           Arbitration Requirement.  Any dispute between Broker and Pershing
that cannot be settled shall be taken to arbitration as set forth in Paragraph
27.3 below.

27.2           ARBITRATION DISCLOSURE.

 
o
ARBITRATION IS FINAL AND BINDING ON THE PARTIES.

 
o
THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT, INCLUDING THE
RIGHT TO JURY TRIAL.

 
o
PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN AND DIFFERENT FROM
COURT PROCEEDINGS.

 
o
THE ARBITRATORS’ AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL
REASONING AND ANY PARTY’S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF RULINGS BY
THE ARBITRATORS IS STRICTLY LIMITED.

 
o
THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS WHO
WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY.

27.3           ARBITRATION AGREEMENT.

ANY CONTROVERSY BETWEEN US ARISING OUT OF YOUR BUSINESS OR THIS AGREEMENT SHALL
BE SUBMITTED TO ARBITRATION CONDUCTED BEFORE THE NEW YORK STOCK EXCHANGE, INC.,
OR FINRA DISPUTE RESOLUTION, INC. (OR THEIR SUCCESSOR FIRMS), AND IN ACCORDANCE
WITH THE RULES THEN OBTAINING OF THE SELECTED ORGANIZATION AND SHALL BE
CONDUCTED AS A BROKER TO BROKER OR MEMBER VS MEMBER DISPUTE.  ARBITRATION MUST
BE COMMENCED BY SERVICE UPON THE OTHER PARTY OF A WRITTEN DEMAND FOR ARBITRATION
OR A WRITTEN NOTICE OF INTENTION TO ARBITRATE, THEREIN ELECTING THE ARBITRATION
TRIBUNAL.

NO PERSON SHALL BRING A PUTATIVE OR CERTIFIED CLASS ACTION TO ARBITRATION, NOR
SEEK TO ENFORCE ANY PRE-DISPUTE ARBITRATION AGREEMENT AGAINST ANY PERSON WHO HAS
INITIATED IN COURT A PUTATIVE CLASS ACTION AND WHO IS A MEMBER OF A PUTATIVE
CLASS AND WHO HAS NOT OPTED OUT OF THE CLASS WITH RESPECT TO ANY CLAIMS
ENCOMPASSED BY THE PUTATIVE CLASS ACTION UNTIL: (i) THE CLASS CERTIFICATION IS
DENIED; (ii) THE CLASS IS DECERTIFIED; OR (iii) THE CUSTOMER IS EXCLUDED FROM
THE CLASS BY THE COURT.  SUCH FORBEARANCE TO ENFORCE AN AGREEMENT TO ARBITRATE
SHALL NOT CONSTITUTE A WAIVER OF ANY RIGHTS UNDER THIS AGREEMENT EXCEPT TO THE
EXTENT STATED HEREIN.

Page 28 of 35

--------------------------------------------------------------------------------

 
 
28.0           INJUNCTIVE RELIEF

In the event of a breach or threatened breach of any of the provisions of this
Agreement a party,  or any employee or representative of such party, such party
acknowledges that the other party shall be entitled to seek preliminary and
permanent injunctive relief to enforce the provisions hereof.  In addition, both
parties acknowledges that a breach of the terms regarding confidentiality of
information and ownership of the other party’s intellectual property would cause
irreparable and incalculable damage to such party.  Nothing herein shall
preclude the parties from pursuing any action or other remedy for any breach or
threatened breach of this Agreement, all of which shall be cumulative.

29.0           GENERAL PROVISIONS

29.1           Successors and Assigns.  This Agreement shall be binding upon and
shall inure to the benefit of the respective successors and assigns of Broker
and Pershing.  Except to an affiliate with a a net capital amount similar to
Broker or Pershing respectively, no assignment of this Agreement or any rights,
including those to indemnification hereunder by either party shall be effective
unless the other party’s written consent shall be first obtained.

29.2           Severability.  If any provision of this Agreement shall be held
to be invalid or unenforceable, the validity or enforceability of the remaining
provisions and conditions shall not be affected thereby.

29.3           Counterparts.  This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute a single agreement.

29.4           Entire Agreement Amendments and Duties Not Specifically
Enumerated Herein.   This Agreement represents the entire agreement between the
parties with respect to the subject matter contained herein and all prior
discussions, agreements, and promises, written or oral, are merged herein.  This
Agreement may not be changed orally, but only by an agreement in writing signed
by the parties.  Pershing shall not be responsible or liable for failure to
perform any duties not specifically enumerated herein.

29.5           Captions.  Captions herein are for convenience only and are not
of substantive effect.

29.6           Choice of Law.  This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York, without giving
effect to the conflicts of laws or principles thereof.  This Agreement shall not
be governed by the United Nations Convention on the International Sale of Goods.
 

 
Page 29 of 35

--------------------------------------------------------------------------------

 
 
29.7           Citations.  Any reference to the rules or regulations of the SEC,
FINRA, the NYSE, or any other regulatory or self-regulatory organization are
current citations.  Any changes in the citations (whether or not there are any
changes in the text of such rules or regulations) shall be automatically
incorporated herein.

29.8           Construction of Agreement.  Neither this Agreement nor the
performance of the services hereunder shall be considered to create a joint
venture or partnership between Pershing and Broker or between Broker and other
brokers for whom Pershing may perform the same or similar services.

29.9           Third-Parties.  This Agreement is between the parties hereto and
is not intended to confer any benefits on third-parties including, but not
limited to, customers of Broker.

29.10         Non-Exclusivity of Remedies.  The enumeration herein of specific
remedies shall not be exclusive of any other remedies.  Any delay or failure by
a 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.  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.

29.11         SIPA; Rule 15c3-3.  All introduced customers are the customers of
Broker except as provided under the Securities Investor Protection Act (“SIPA”)
and SEC financial responsibility rules where the customers shall be considered
customers of Pershing.  Nothing in this Paragraph will otherwise change or
affect the provisions of this Agreement which provide that the customer account
remains Broker’s customer account for all other purposes, including but not
limited to, supervision, suitability and indemnification.

29.12         United States Postal Service Documents.  Broker hereby appoints
Pershing as its attorney-in-fact for the purpose of executing such documents as
are necessary to allow Broker and its customers to participate in the
FASTforward program of the United States Postal Service.  This may include, but
not be limited to Pershing’s execution, on an annual basis, on Broker’s behalf,
of the FASTforward Processing Acknowledgment Form.

29.13         Provision of Reports and Exception Reports.  Beginning on or
before the effective date of this Agreement and before July 31 of each calendar
year thereafter, Pershing shall provide to Broker, pursuant to NYSE Rule 382(e),
a list of all reports (e.g. exception-type reports) it offers to Broker.  Broker
shall promptly advise Pershing, in writing, of those specific reports it elects
to receive.  Pershing and Broker each represent that their obligations relative
to exception reports, pursuant to NYSE Rule 382(e) have been completed.

29.14         Force Majeure.  Pershing shall not be liable for any loss caused,
directly or indirectly, resulting from any circumstances beyond its reasonable
control, including without limitation, labor disputes, riots, sabotage,
insurrection, fires, flood, storm, explosions, earthquakes, electrical power
failures, telecommunications system failures, Internet failure, outbreaks of
computer viruses, worms, parasites and the like, acts of God or nature, war,
both declared or undeclared, or acts of terrorism (each a “Force Majeure Event”;
collectively, “Force Majeure Events”).  In addition, Pershing shall not be
liable for any loss caused, directly or indirectly, resulting from the acts or
omissions of third parties over which it has no control.

29.15         Audio Taping of Telephone Conversations.  Each party understands
that for quality control, dispute resolution or other business purposes, the
parties may record some or all telephone conversations between them.  Each party
hereby consents to such recording and will inform its employees, representatives
and agents of this practice.  It is further understood that all such
conversations are deemed to be solely for business purposes.

Page 30 of 35

--------------------------------------------------------------------------------

 
 
30.0         OWNERSHIP AND LICENSES

30.1         Definitions.  For purposes of this Paragraph 30, the following
terms have the meanings ascribed to them.
 
“Access Device” means any type of computer, personal digital assistant (PDA),
beeper, television, telephone or any other communications device, including,
without    limitation, any software Broker uses on such device whether Pershing
provided such software to Broker or otherwise, that enables Broker to access and
use the Pershing Services via a wired or wireless connection to any wireless
network, the Internet, the World Wide Web or any other computer or
telecommunications network.

“Authorized User” means each customer, employee and/or agent of Broker
designated as authorized by Broker to access the Software, Systems and Services.
 
“Identification Devices” means any passwords, codes, certificates, and other
identification devices and security processes or measures necessary to access
and use the Systems and Software.
 
“Intellectual Property Rights” with respect to any intellectual property means
all applicable copyrights (including without limitation, the exclusive right to
reproduce, distribute copies of, display and perform the copyrighted work and to
prepare derivative works), rights in trademarks,  rights in patents and patent
applications, tradenames, mask-work rights, trade secrets, moral rights,
authors’ rights, domain names and universal resource locators (“URLs”), TCP/IP
addresses, metatags, all renewal and extensions thereof, and the like,
regardless of whether any  such rights arise under the laws of the United
States, or any other state, country or jurisdiction.
 
“Services” or “Pershing Services” means the services to be provided by Pershing
and/or its Third Party Providers to Broker under this Agreement, including
Internet-based services, through the Software and Systems, including, without
limitation, (a) communication and content services, (b) access to account and
financial information, (c) securities trading, and other services to be provided
by Pershing to Broker under this Agreement.
 
“Software” means the software, including, without limitation, any and all
documentation, home page design(s), methodologies, techniques, know-how and
software libraries, and the code comprising the same, as such may be revised
from to time to include any upgrades, updates, new versions and other
modifications, improvements and enhancements made by or for Pershing in
accordance with this Agreement.
 
“Systems” means the data access, account information, trading and order entry,
and report generation systems, and related know-how, as such may be revised from
to time to include any upgrades, updates, new versions and other modifications,
improvements and enhancements made by or for Pershing in accordance with this
Agreement.

“Third Party Providers” means Pershing’s suppliers, vendors or providers that
have entered into third-party agreements with Pershing.

30.2    License to Use Systems and Software.  Pershing hereby grants to Broker a
non-exclusive, non-transferable, non-assignable license for the term of this
Agreement to access and use the Software and Systems for the limited purpose of
enabling Broker to obtain the Services.  Pershing shall have the right to
terminate or suspend such license and the provision of the Systems and Software
to Broker in the event of breach of this Agreement that is not cured within
thirty (30) days of Brokers’ receipt of Pershing’s notice of such breach.
 
 
Page 31 of 35

--------------------------------------------------------------------------------

 
 
30.3    No Reverse Engineering.  Broker shall not, directly or indirectly,
modify the features or functionality of, copy or create derivative works using
all or any portion of, analyze or remove semiconductor components from,
decompile, or otherwise reverse engineer or attempt to reverse engineer or
derive source code, techniques, algorithms or processes from the Systems or
Software or permit or encourage any third-party to do so.
 
30.4    Ownership.  Except for the license granted in Paragraph 30.2 herein,
nothing herein shall be construed to transfer to Broker any rights, title and/or
interest in and to the Software, Systems and Services, including, without
limitation, the Intellectual Property Rights therein.  Except to the extent that
any Intellectual Property Rights in the Software, Systems and Services are
published or otherwise matters of public record, the Systems and Software
Products are trade secrets of Pershing and its affiliates.  As between Broker
and Pershing, Pershing shall at all times be and remain the sole and exclusive
owner of the Systems, Software and Services.
 
30.5    Web-based Communications.  The Services shall be provided through
various means, including, without limitation, a site or pages of a site on the
World Wide Web that are accessible through an Internet address unique to Broker,
but which shall not be required to be a domain name unique to Broker.
 
30.6    Revisions and Modifications.  From time to time during the term of this
Agreement Pershing may in its sole and absolute discretion revise or modify any
Software, Systems or Services to include any patches, upgrades, updates, new
versions and other modifications, improvements and enhancements made by or for
Pershing (any of which patches, upgrades, updates, new versions and other
modifications, improvements and enhancements are collectively referred to in
this Agreement as “revisions and modifications” or “revisions or modifications”,
as the context requires).  To the extent that any such revisions or
modifications are made, Schedule A shall be deemed to be revised to include such
revision or modification and any associated fees only upon reasonable prior
written notice of such revisions or modifications to Broker. (Associated fees
under this section shall not be increased more than 10% unless such fees relate
to regulatory or security related upgrades).
 
30.7    Business Continuity.   Pershing agrees to maintain a written business
continuity plan identifying procedures relating to an emergency or significant
business disruption in accordance with applicable industry regulations.
 
30.7.1  Pershing shall, from time to time, provide Broker with Identification
Devices for accessing and using the Software, Systems and Services.
 
30.7.2  Broker shall be responsible for designating Authorized Users.  [Broker
shall provide Pershing with a list of Authorized Users so designated by Broker
and shall provide Pershing with changes to this list.]
 
30.7.3  Broker shall be solely responsible for the assignment and distribution
to Authorized Users, and the maintenance of all Identification Devices.  Broker
agrees not to assign and/or distribute any Identification Devices to individuals
who are not Authorized Users.
 
30.7.4  Each party shall be responsible for and shall provide the same level of
security as it applies to its own proprietary and confidential property in the
protection, maintenance, and distribution of those Identification Devices and
codes within its organization and to its agents and customers, but in no case
less than the security that a reasonably prudent person would use to protect
their own proprietary and confidential property.
 
 
Page 32 of 35

--------------------------------------------------------------------------------

 
 
30.7.5           Broker shall report to Pershing any loss, theft, or discovery
of any Identification Devices immediately and Broker shall be responsible for
any unauthorized use, and for any loss resulting from unauthorized use, of any
Identification Device attributable to Broker prior to the time the loss, theft,
or discovery of the Identification Device is reported to Pershing.
 
30.8          Restrictions on Access, Viewing and Distribution.
 
30.8.1  Quotes, news and research data, including market information
(collectively, “Market Data”) displayed on the Pershing Service may be based on
or derived from different Third Party Providers and may be updated at different
time intervals, and accordingly, the various trade status reports, including
intraday updates of balances and positions information, available via any Access
Devices, which incorporate such Market Data information, may differ due to the
different Market Data and sources and their update intervals.  Similarly,
different Access Devices may incorporate different Market Data and sources, and
they may differ for the same reasons.

30.8.2  The Software, Systems, and design of the Pershing Service are the
property of Pershing.  The content, including both its form and substance,
included in the Pershing Service is the property of either Pershing or one or
more of its Third Party Providers (“Third Party Provider Services”).  Broker
shall have no rights in or to the Software, Systems, or Pershing Service or
Third Party Provider Services, except as expressly provided herein, and Broker
agrees not to take any action inconsistent with Pershing’s rights in the
Software, Systems, or Pershing Service or the Third Party Providers’ rights in
their Third Party Provider Services.

30.8.3  All of the materials in the Pershing Service are protected by United
States and international copyright, trademark and other intellectual property
laws.  Broker’s right to use the Pershing Service, including the Third Party
Provider Services, is limited to use in connection with Broker’s account(s) and
for Broker’s personal benefit only (“Internal Use”).  Broker may not modify,
rent, lease, loan, sell, assign, distribute, display, perform, publish or create
derivative works based on any of the content, materials or the like contained in
the Pershing Service, in whole or in part.  Broker may not copy, modify, create
derivative works from, reverse engineer, reverse assemble or otherwise attempt
to discover the source code of any software or techniques, algorithms or
processes that are part of the Pershing Service.  Broker may print out a
reasonable number of copies of the materials on the Pershing Service as is
necessary for Broker’s Internal Use, provided that Broker does not delete any
copyright, trademark or other intellectual property notices contained in such
materials.  Broker may prepare hard copy reports incorporating Third Party
Provider Services and download Third Party Provider Services into commercially
available spreadsheet software programs or delimited text files; Broker may not,
however, disseminate in electronic form or use Third Party Provider Services for
the construction of other products or services.

30.8.4  Broker acknowledges and agrees that the license to use the Software,
Systems and Services granted by Paragraph 30.2 does not diminish Broker’s
responsibility for compliance with all applicable rules as set forth in
Paragraph 6 of this Agreement.
 
30.9  Indemnification; Disclaimers.
 
30.9.1  Pershing shall indemnify, defend, and hold Broker harmless from and
against all claims, demands, proceedings, suits, actions, liabilities, expenses,
and reasonable attorney’s fees, and costs in connection therewith (collectively,
“Losses”) arising out of a claim that the Software and/or Systems, or Broker’s
authorized use thereof, as set forth in this Agreement, infringes upon any
Intellectual Property Rights of any third party.  This Paragraph 30.9.1 shall
survive any termination of this Agreement; provided, however, that any indemnity
provided under this Paragraph 30.9.1 shall only be in respect of events
occurring during the term of this Agreement.
 
 
Page 33 of 35

--------------------------------------------------------------------------------

 
30.9.2  Broker shall not be entitled to any indemnification under Paragraph
30.9.1 hereof to the extent that the Losses in respect of which such
indemnification is sought is attributable to Broker’s negligent activities
and/or misuse of Pershing Services, as set forth in this Agreement
(“Unauthorized Use”) or to the extent of such Losses due to a delay in providing
notice of the circumstances giving rise to such Losses.  Broker shall indemnify,
defend, and hold Pershing harmless from and against all claims, demands,
proceedings, suits, actions, liabilities, expenses, and reasonable attorney’s
fees, and costs in connection therewith (collectively, “Losses”) arising out of
such negligent activities by Broker, Broker’s Unauthorized Use of Pershing
Services or such delay by Broker in providing such notice.  This Paragraph
30.9.2 shall survive any termination of this Agreement.
 
30.9.3  
DISCLAIMER OF WARRANTIES FOR INFORMATION.

THE PERSHING SERVICE IS PROVIDED ON AN “AS IS”, “AS AVAILABLE” BASIS, WITHOUT
WARRANTY OF ANY KIND, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE
LAW.  PERSHING DISCLAIMS ALL WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY
IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND
NON-INFRINGEMENT.  THERE IS NO WARRANTY THAT ANY INFORMATION PROVIDED THROUGH
PERSHING, THE PERSHING SERVICE OR THE SYSTEM WILL FULFILL ANY PARTICULAR
PURPOSES OR NEEDS.

30.9.4  
LIMITATION OF LIABILITY; DATA NOT GUARANTEED.

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW AND EXCEPT AS OTHERWISE
PROVIDED IN THIS AGREEMENT, IN NO EVENT SHALL PERSHING, ANY OF ITS AGENTS,
AFFILIATES, THIRD PARTY PROVIDERS OR ANYONE ELSE INVOLVED IN CREATING,
PRODUCING, DELIVERING OR MANAGING THE DELIVERY OF THE PERSHING SERVICE BE LIABLE
TO BROKER OR ANYONE ELSE FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL,
CONSEQUENTIAL, PUNITIVE OR ANY OTHER DAMAGES WHATSOEVER (INCLUDING WITHOUT
LIMITATION DAMAGES FOR LOST PROFITS, TRADING LOSSES, DAMAGES RESULTING FROM
INCONVENIENCE OR LOSS OF USE OF THE WEB SITE), EVEN IF THEY HAVE BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES, ARISING OUT OF THE USE OF OR INABILITY TO USE
THE PERSHING SERVICE OR FOR ANY BREACH OF ANY WARRANTY.

Quotes, news and research data, including market information displayed on any
Access Device (collectively, “Market Data”) are obtained from sources Pershing
believes to be reliable.  HOWEVER, ALL MARKET DATA IS PROVIDED “AS IS” AND “AS
AVAILABLE”, AND THERE MAY BE DELAYS, OMISSIONS AND INACCURACIES IN SUCH
DATA.  NEITHER PERSHING NOR ITS AGENTS, AFFILIATES, OR THIRD PARTY PROVIDERS OR
ANYONE ELSE INVOLVED IN CREATING, PRODUCING, DELIVERING OR MANAGING THE DELIVERY
OF SUCH DATA, INFORMATION OR SERVICES (COLLECTIVELY, THE (“Disseminating
Parties”) CAN GUARANTEE, NOR DO PERSHING OR THEY GUARANTEE, THE CORRECTNESS,
QUALITY, ACCURACY, SEQUENCE, TIMELINESS, CURRENTNESS, RELIABILITY, PERFORMANCE,
COMPLETENESS, CONTINUED AVAILABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, TITLE OR NON-INFRINGEMENT OR OTHERWISE OF ANY MARKET DATA OR THIRD
PARTY PROVIDER SERVICES, AND PERSHING AND THEY HEREBY DISCLAIM ANY SUCH EXPRESS
OR IMPLIED WARRANTIES.  Pershing also reserves the right to filter the Market
Data provided to Broker through the Pershing Service.  The Disseminating Parties
shall not be liable to Broker or to anyone else for any loss or injury, whether
or not caused in whole or in part by their negligence or omission, in procuring,
compiling, editing, writing, reporting or delivering any Market Data or Third
Party Provider Services through Pershing or by any Force Majeure Event or other
cause beyond their control.  The Disseminating Parties will not be liable to
Broker or anyone else for any decision made or action taken by Broker in
reliance on such Market Data or for direct, indirect, incidental, special,
consequential, punitive or any other damages whatsoever (including without
limitation damages for lost profits, trading losses, damages resulting from
inconvenience or loss of use of the Pershing Service) even if Pershing or its
Third Party Providers have been advised of the possibility of such damages.
 

 
Page 34 of 35

--------------------------------------------------------------------------------

 
 
 
       Except as otherwise provided in this Agreement, Broker agrees that
neither Pershing, nor its Third Party Providers shall be liable in any way for,
any liability, costs, damages or loss caused directly or indirectly by
government restrictions, exchange or market rulings, suspension or delay of
trading, equipment failure, communication line failure, system failure, security
failure, unauthorized access, theft, Force Majeure Event or any problem,
technological or otherwise, that might prevent Broker from accessing or
utilizing the Services.
 
      IN WITNESS WHEREOF the parties have hereto affixed their signatures by
their duly authorized officers on the day and date first above written.
 
      This Agreement contains a pre-dispute arbitration clause in Paragraph
27.  Broker acknowledges receiving a copy of this Agreement.

Broadpoint Securities, Inc:
 
By:    Rob Fine           /s/ Rob Fine
Title: President
 
PERSHING LLC
 
By:    James Roundtree          /s/James Roundtree
Title: Director

 

 
 
 
 
 
Page 35 of 35

--------------------------------------------------------------------------------