exv10w37






Exhibit 10.37




NOTE: PORTIONS OF THIS AGREEMENT ARE THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST BY THE REGISTRANT TO THE

SECURITIES AND EXCHANGE COMMISSION. SUCH PORTIONS HAVE BEEN

REDACTED AND ARE MARKED WITH A “[****]” IN PLACE OF THE REDACTED LANGUAGE




Schedule A (Canada)




SERVICE BUREAU AND OPERATIONS SUPPORT SERVICES SCHEDULE



To The Master Services Agreement



between



BROADRIDGE FINANCIAL SOLUTIONS, INC.



and



PENSON WORLDWIDE, INC.


This schedule (the “Schedule”), dated as of November 2, 2009 (the “Schedule Effective Date”),
between Broadridge Financial Solutions (Canada) Inc. (“Ridge Local Affiliate”) and Penson Financial
Services Canada Inc. (“Client Local Affiliate”), to the Master Services Agreement, dated as of the
date hereof, between Broadridge Financial Solutions, Inc. and Penson Worldwide, Inc., sets forth
the terms and conditions, in addition to the terms and conditions in the Master Services Agreement,
under which Ridge Local Affiliate will provide service bureau and operations support services to
Client Local Affiliate to assist and support Client Local Affiliate in functioning as a clearing
firm. Each of Client Local Affiliate and Ridge Local Affiliate agrees to comply with and fulfill
all terms and conditions applicable to it under the Master Services Agreement. Simultaneously with
the execution of this Schedule, this Schedule supersedes and replaces the Master Services
Agreement, dated June 30, 2009, between Penson Financial Services Canada Inc. and Broadridge
Financial Services (Canada) Inc. and the BPS Canadian Services Bureau Schedule, dated June 30,
2009, between Penson Financial Services Canada Inc. and Broadridge Financial Services (Canada) Inc.
(the “Existing Canadian Agreement”).



Unless otherwise defined herein, all capitalized terms shall have the meanings given to them in the
Master Services Agreement. In the event of a conflict between the terms and conditions of this
Schedule and the terms and conditions of the Master Services Agreement, the terms and conditions of
this Schedule shall govern. The term “Client Local Affiliate” as used in this Schedule includes
all Affiliates, divisions and subsidiaries of Client Local Affiliate. Except where otherwise
indicated, all references in this Schedule to Sections or Attachments are to Sections to, and
Attachments of, this Schedule. The term “party” as used in this Schedule means Ridge Local
Affiliate or Client Local Affiliate, as applicable. The term “parties” as used in this Schedule
means Ridge Local Affiliate and Client Local Affiliate.





	I.	 	SUBMISSION OF SCHEDULE






A. During the Schedule Term, Client Local Affiliate and Ridge Local Affiliate shall each be
subject, to the extent applicable to such party, to the provisions of federal, state and
local laws, rules and regulations and the constitution, by-laws, rules, regulations and
stated policies of the Investment Industry Regulatory Organization of Canada (“IIROC”), the
Canadian Investors Protection Fund (“CIPF”), the Ontario Securities Commission (“OSC”), the
Autorité des Marchés Financiers (“AMF”), the Montréal Exchange (“ME”) and any other
securities exchange, commission, association, regulatory or self-regulatory organization
(“SRO”) vested with authority over Client Local Affiliate or Ridge Local Affiliate (to the
extent applicable to a party, the “Laws and Rules”). Each party shall perform its
obligations under this Schedule in accordance with the Laws and Rules.



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CANADA




B. Client Local Affiliate shall submit this Schedule to the IIROC, or any other SRO, as
required, on behalf of itself and Ridge Local Affiliate for review and, if necessary,
approval. This Schedule shall not become effective until the date upon which all necessary
SRO approvals as to both parties are received (the “Approval Date”); provided, however, that
if no SRO approvals are required for this Schedule to become effective, this Schedule shall
become effective as of the Schedule Effective Date. In the event that any such approval is
required and this Schedule is not so approved, the parties shall negotiate in good faith to
amend this Schedule as may be needed to obtain such approval.




C. Ridge Local Affiliate acknowledges that Client Local Affiliate has regulatory
responsibilities as a clearing firm, including, among other things, a duty to supervise the
types of business in which it engages. To assist Client Local Affiliate in satisfying such
obligations, Ridge Local Affiliate agrees to provide, at the reasonable request of Client
Local Affiliate, performance reports with respect to the Services and full access to
relevant books and records, information and Ridge Local Affiliate personnel engaged in
providing the Services. Ridge Local Affiliate acknowledges that Client Local Affiliate is
required, from time to time, to prepare and file reports with the IIROC, CIPF and other SROs
or Governmental Authorities. To assist Client Local Affiliate in satisfying such
requirements, Ridge Local Affiliate agrees to provide Client Local Affiliate with
information in its possession that is necessary for Client Local Affiliate to prepare and
file any such reports.




D. This Schedule is not intended, and shall not be construed, to limit, reduce, or otherwise
change any regulatory, contractual or other obligation that Client Local Affiliate owes to a
correspondent or to its customers.




	II.	 	SERVICES TO BE PERFORMED BY RIDGE LOCAL AFFILIATE






A. Subject to the second paragraph of Section 16.G of the Master Services Agreement and
Section I.B, Ridge Local Affiliate will perform the services, functions and responsibilities
described in Attachment A in accordance with the terms and conditions of this Schedule and
the Master Services Agreement. Attachment A is hereby incorporated in and made an integral
part of this Schedule. Any additional services to be performed by Ridge Local Affiliate
shall be subject to the written agreement of the parties.




B. Intentionally left blank.




C. This Schedule and the Master Services Agreement are intended to create an exclusive
arrangement between Client Local Affiliate and Ridge Local Affiliate with respect to the
Services utilized by Client Local Affiliate as of the applicable Live Date in the Territory
for which a pricing schedule is included in this Schedule except (A) as otherwise set forth
in this Schedule and the Master Services Agreement and (B) in the event that (i) Client
Local Affiliate or a Customer of Client Local Affiliate is prohibited by Law from receiving
Services from Ridge Local Affiliate in the Territory, (ii) Client Local Affiliate obtains a
business and in connection therewith is contractually required to use an alternative system
(and not the Services) as a condition of obtaining such business or (iii) during any time
period that Ridge Local Affiliate is in material breach of this Schedule and has failed to
cure such breach within thirty (30) days following notice from Client Local Affiliate
specifying the nature of such breach in reasonable detail.




	III.	 	CONVERSION






A. Conversion of Client Correspondents. In connection with the conversion of the
correspondents of Client Local Affiliate (“Client Correspondents”) to Ridge Local Affiliate,
the parties agree to the following:




	 	(i)	 	Client Local Affiliate shall provide Ridge Local Affiliate with
Client Local Affiliate’s requirements with respect to the Client Local
Affiliate files and Service Levels applicable to the Client Correspondents (the
“Client Requirements”) after the Schedule Effective Date. The parties shall
enter into a statement of work (the “Conversion SOW”) that will describe Client
Local Affiliate’s migration to Ridge Local Affiliate’s service delivery and




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	 	 	 	technology platform [****]. The Conversion SOW will define the Target Live
Date for each Service and describe specific implementation activities and
procedures required to migrate Client Correspondents to the Ridge Local
Affiliate, including, without limitation, development, implementation and
integration of Software and other software and development and integration
of correspondent clearing functionalities, reporting and monitoring systems
and such other services as may be set forth in the Conversion SOW (the
“Conversion Services”). Without limiting the generality of the foregoing,
the Conversion SOW shall (1) specify that Ridge Local Affiliate will convert
the applicable Client Local Affiliate files to make them compatible with the
Services and the other services, as may be required in respect of the
migration of Client Local Affiliate’s Customers to the Services and
(2) describe the development and integration of correspondent clearing
functionalities by Ridge Local Affiliate. The Conversion Services shall be
provided at no charge to Client Local Affiliate by Ridge Local Affiliate.
	 
	 	(ii)	 	The parties shall cooperate and provide each other with all
information and assistance reasonably required in connection with the
Conversion Services. Each party will assign a liaison person to assist and
cooperate with the other party in connection with the Conversion Services
(which person may be replaced by a party at its sole discretion from time to
time by way of notice to the other party).






	IV.	 	TERM OF SCHEDULE






A. Schedule Term. The term of this Schedule (the “Schedule Term”) shall begin on
the Schedule Effective Date and shall continue for a period of ten (10) years after the last
Live Date with respect to the Schedules under the Master Services Agreement for the U.S.,
U.K. or Canada (for clarity, the Schedule Term of the Schedules under the Master Services
Agreement for the U.S., U.K. and Canada shall be coterminous with each other); provided,
however, that this Schedule’s effective date is subject to its review and approval by the
applicable regulatory agency as described in Section I.A. The “Live Date” for a Service is
defined as the first date upon which Ridge Local Affiliate processes trades utilizing the
applicable Service on behalf of Client Correspondents in accordance with the provisions and
requirements of this Schedule and the Master Services Agreement (excluding any beta testing
or similar testing of the system). The Schedule Term shall automatically extend following
its scheduled expiration date unless (1) either party gives notice of termination at least
one hundred eighty (180) days prior to the scheduled expiration date, in which case the
Schedule Term shall expire on the scheduled expiration date or (2) either party gives notice
of termination at any time after the date that is one hundred eighty (180) days prior to the
scheduled expiration date of the Schedule Term (including any time beyond the scheduled
expiration date), in which case the Schedule Term shall expire on the date specified in such
notice of termination, which date must be at least one hundred eighty (180) days after the
date of such notice.




B. Client Local Affiliate’s Termination.




	 	(i)	 	Client Local Affiliate may terminate this Schedule for
convenience upon one hundred twenty (120) days notice to Ridge Local Affiliate.
In the event of any such termination or in the event Ridge terminates this
Schedule pursuant to Section 18.B of the Master Services Agreement, Client
Local Affiliate shall pay to Ridge Local Affiliate prior to the effective date
of such termination, as liquidated damages and not as a penalty, an amount
equal to [****] of the Base Fee (but not as increased or decreased in
connection with Section III of Attachment B-1) that Client Local Affiliate
would otherwise be obligated to pay under this Schedule if this Schedule had
not been terminated, from and after the effective date of termination through
the end of this Schedule Term.
	 
	 	(ii)	 	Client Local Affiliate may terminate this Schedule in the event
of a Service Level Termination Event upon notice to Ridge Local Affiliate, and,
in such event, no termination fees or termination charges of any type shall be
payable by Client Local Affiliate to Ridge Local Affiliate.





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	 	 	 	No later than [****] after the Schedule Effective Date, the parties shall
define a Service Level Termination Event.
	 
	 	(iii)	 	Client Local Affiliate may terminate this Schedule for a
Change in Control of Client Local Affiliate or any Affiliate that directly or
indirectly Controls such Client Local Affiliate (the “Applicable Client
Entity”) upon [****] notice to Ridge Local Affiliate. In the event of any such
termination, Client Local Affiliate shall pay to Ridge Local Affiliate prior to
the effective date of such termination, as liquidated damages and not as a
penalty, an amount equal to the lesser of (a) [****] of the Base Fee (but not
as increased or decreased in connection with Section III of Attachment B-1)
that Client Local Affiliate would otherwise be obligated to pay under this
Schedule if this Schedule had not been terminated, from and after the effective
date of termination through the end of the Schedule Term and (b) U.S. [****].
	 
	 	 	 	“Change in Control” shall mean the (a) consolidation or merger of an
Applicable Client Entity with or into any entity (other than the
consolidation or merger of an Applicable Client Entity with a third party
entity in which such Applicable Client Entity is the surviving entity;
provided, however, that the holders of the then-outstanding voting
securities of such Applicable Client Entity prior to any such consolidation
or merger hold securities that represent immediately after such
consolidation or merger greater than fifty percent (50%) of the combined
voting power of the then-outstanding voting securities of such Applicable
Client Entity thereafter), (b) sale, transfer or other disposition of all or
substantially all of the assets of an Applicable Client Entity or
(c) acquisition by any individual, entity, or group of individuals or
entities acting in concert, of beneficial ownership of fifty percent (50%)
or more (or such lesser percentage that constitutes the power to direct or
cause the direction of the management and policies of an Applicable Client
Entity) of the outstanding voting securities or other ownership interests of
an Applicable Client Entity.






C. Failure To Go Live. If the Services in connection with the Client Correspondents
do not go live by the Target Live Date set forth in the Conversion SOW or any other date
agreed to by the parties as set forth in writing, through no fault of Ridge Local Affiliate
(or its subcontractors) or a Force Majeure Event (as defined in the Master Services
Agreement) or a delay in obtaining an approval described in Section I.B, then Client Local
Affiliate shall pay to Ridge Local Affiliate, as liquidated damages and not as a penalty, an
amount equal to a percentage of the Base Fee that Client Local Affiliate would otherwise be
obligated to pay if the Services had commenced on the Target Live Date as follows (each, a
“Failure To Go Live Monthly Payment”): (i) if the Services do not go live by the [****]
following the Target Live Date, [****]of the Base Fee for such [****]; (ii) if the Services
do not go live by the [****] following the Target Live Date, [****] of the Base Fee for such
[****] ; (iii) if the Services do not go live by the [****] following the Target Live Date,
[****] of the Base Fee for such [****] (iv) if the Services do not go live by the [****]
following the Target Live Date, [****] of the Base Fee for such [****]; (v) if the Services
do not go live by the [****] following the Target Live Date, [****] of the Base Fee for such
[****]; and (vi) if the Services do not go live by the [****] following the Target Live
Date, [****] of the Base Fee for such [****] and for each [****] thereafter until the
Services go live.




D. Early Go Live. If the Services go live prior to the Target Live Date or any
other date agreed to by the parties as set forth in writing, then the Base Fees with respect
to the Services shall be reduced by an amount equal to a percentage of the Base Fee for each
[****] until the Target Live Date as follows: (i) if the Services go live [****] or more
prior to the Target Live Date, [****] of the Base Fee for such [****] and for each month
prior to such [****]; (ii) if the Services go live [****] prior to the Target Live Date,
[****] of the Base Fee for such [****]; (iii) if the Services go live [****] prior to the
Target Live Date, [****] of the Base Fee for such [****]; (iv) if the Services go live
[****] prior to the Target Live Date, [****] of the Base Fee for such [****]; (v) if the
Services go live [****] prior to the Target Live Date, [****] of the Base Fee for such
[****]; and (vi) if the Services go live [****]prior to the Target Live Date, [****] of the
Base Fee for such [****].



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E. Failure to Deliver. If Ridge Local Affiliate fails to deliver the Services
(compliant with the Statement of Work and specifications) by the Target Live Date, through
no fault of Client Local Affiliate (or its subcontractors) or a Force Majeure Event (as
defined in the Master Services Agreement) or a delay in obtaining an approval described in
Section I.B (a “Failure to Deliver”), then Ridge Local Affiliate shall pay Client Local
Affiliate, as liquidated damages and not as a penalty, an amount equal to a percentage of
the amount Client Local Affiliate pays in connection with (a) the Client Local Affiliate
personnel performing the operational support services described in Appendix 3 and (b) the
services Client Local Affiliate outsourced to third parties, including, without limitation,
as set forth in Appendix 4, in each case, on a [****] basis until such time as Ridge Local
Affiliate delivers the Services (compliant with the Statement of Work and specifications);
provided, however, that such amount Client Local Affiliate pays is consistent with amounts
Client Local Affiliate historically paid for such services, including any non-recurring
expense or cost (collectively, the “Historical Amount”), as follows: (i) if the Services do
not go live by the [****] following the Target Live Date, [****] of the Historical Amount;
(ii) if the Services do not go live by the [****] following the Target Live Date, [****] of
the Historical Amount for such [****]; and (iii) if the Services do not go live by the
[****] following the Target Live Date, [****] of the Historical Amount for such [****] and
for each [****] thereafter.




If a Failure to Deliver requires Client Local Affiliate to extend or renew any Disclosed
Agreement (as defined below), then: (1) Client Local Affiliate shall use commercially
reasonable efforts to obtain a month-to-month extension of such Disclosed Agreement and, if
it is unable to obtain a month-to-month extension, promptly notify Ridge Local Affiliate of
its inability to obtain a month-to-month extension and use commercially reasonable efforts
to minimize any early termination fees due under such extension or renewal (whether by
contractual right or continuing such Disclosed Agreement past the expiration date);
(2) during the period from and after the first day of such extension or renewal (whether by
contractual right or continuing such Disclosed Agreement past the expiration date) and until
and including the final Live Date with respect to the Services applicable to such Disclosed
Agreement, Ridge Local Affiliate shall be responsible for any incremental increase in the
fees due under such Disclosed Agreement as a result of such extension or renewal (in
addition to the Historical Amounts calculated in accordance with the first paragraph of this
Section IV.E); and (3) from and after the final Live Date with respect to the Services
applicable to such Disclosed Agreement, Ridge Local Affiliate shall be responsible for any
early termination fees, fees for services and other amounts payable under such Disclosed
Agreement. A “Disclosed Agreement” is defined as those agreements between Client Local
Affiliate and a third-party service provider that Client Local Affiliate discloses to Ridge
Local Affiliate, including the applicable termination date and extension options of each
such agreement, prior to the parties’ execution of the Conversion SOW.




	V.	 	CHARGES






	 	A.	 	The fees for the Services are set forth in Attachment B hereto. Attachment B
is hereby incorporated in and made an integral part of this Schedule. Unless otherwise
indicated, all fees and charges set forth in Attachment B are in Canadian dollars.
Notwithstanding the immediately preceding sentence, for purposes of calculating the
aggregate amounts in connection with the last paragraph in Attachment A and paragraph
six of Section III to Attachment B-1, such calculation shall be in U.S. dollars using
the exchange rate published in the Wall Street Journal on the Schedule Effective Date.
	 
	 	B.	 	The monthly charge for the Services shall be equal to 1/12th of the Base Fee
plus any Tiered Fees, as set forth in Attachment B, and shall be payable commencing on
the Live Date for the relevant Services. The monthly charge shall not be increased at
anytime during the Schedule Term, except (i) as set forth in Attachment B and
(ii) Ridge Local Affiliate shall have the right to pass through increases, and shall
pass through decreases, relating to the charges of third party service providers,
including, without limitation, communication and other third party service provider
charges (excluding charges of Ridge Local Affiliates) and federal, provincial, and
local governmental fees, to the extent that the parties imposing such fees have
increased or decreased the same and




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	 	 	 	provided any such increases shall be passed through only to the extent they are
passed through to all Ridge Local Affiliate customers receiving the Services.
	 
	 	C.	 	[****]






	VI.	 	NO PARTNERSHIP OR AGENCY; NO SPECIAL TREATMENT
	 
	 	 	Neither this Schedule nor any activity hereunder shall create a general or limited
partnership, association, joint venture, branch or agency relationship between Client Local
Affiliate and Ridge Local Affiliate. Client Local Affiliate shall not hold itself out as an
agent of Ridge Local Affiliate or of any subsidiary or company controlled directly or
indirectly by or affiliated with Ridge Local Affiliate, nor shall it employ Ridge Local
Affiliate’s name in any manner that creates the impression that the relationship created or
intended between them is anything other than that of service provider and clearing broker.
Except as reasonably necessary to provide the Services, Ridge Local Affiliate shall not hold
itself out as an agent of Client Local Affiliate or of any subsidiary or company controlled
directly or indirectly by or affiliated with Client Local Affiliate, nor shall it employ
Client Local Affiliate’s name in any manner that creates the impression that the
relationship created or intended between them is anything other than that of service
provider and clearing broker. Neither party shall, without the prior approval of the other
party, place any advertisement in any newspaper, publication, periodical or any other media
if such advertisement in any manner makes reference to the other party or to the
arrangements contemplated by this Schedule. Neither party shall, without the prior approval
of the other party (which approval shall not be unreasonably withheld), furnish any link to
the website(s) of the other party or its Affiliates. For the avoidance of doubt, nothing
herein shall prevent the disclosure of (i) Ridge Local Affiliate’s name or the Services to
be performed under the Master Services Agreement or this Schedule to any of Client Local
Affiliate’s regulators or customers or (ii) a party’s name or the services it offers to the
extent necessary to carry out each party’s obligations under the Master Services Agreement,
this Schedule or Marketing Agreement.
	 
	 	 	Nothing herein shall cause Ridge Local Affiliate to be construed as or deemed to be a
fiduciary with respect to Client Local Affiliate, any correspondent of Client Local
Affiliate, or any customer of Client Local Affiliate or its correspondents.
	 
	 	 	This Schedule is not intended, nor shall it be construed, to bestow upon either party any
special treatment regarding any other arrangements, agreements or understandings that exist
or may hereafter exist between the parties or their affiliates. Neither party shall have
any obligation to deal with the other in any capacity other than as set forth in this
Schedule.
	 
	VII.	 	SERVICE LEVELS
	 
	 	 	Ridge Local Affiliate shall provide the Services in accordance with the terms and conditions
set forth in Section 1.C of the Master Services Agreement and with respect to Service Levels
set forth in Attachment C hereto and any other Service Level agreement that may be agreed
between the parties from time to time with respect to the Territory. Attachment C is hereby
incorporated in and made an integral part of this Schedule. Ridge Local Affiliate agrees
that the Service Levels set forth in Attachment C shall be at least as stringent as any
service levels provided by Ridge Local Affiliate to its other clients in Canada.
	 
	VIII.	 	EXCHANGE OF INFORMATION
	 
	 	 	Throughout the Schedule Term, each party shall promptly supply the other with information in
its possession necessary or appropriate to enable the other party properly to perform its
obligations under this Schedule and as a registered broker-dealer.
	 
	IX.	 	RECORDS RETENTION
	 
	 	 	The information that Ridge Local Affiliate generates on behalf of
Client Local Affiliate are the books and records of Client Local
Affiliate. Notwithstanding anything to the contrary in the Master
Services Agreement, Ridge Local Affiliate will maintain and preserve
such information in accordance with the




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	 	 	agreed-upon record retention policy set forth in Attachment G and the Laws and Rules. Any
additional retention period(s) shall be directed by Client Local Affiliate and shall be
subject to the mutual written agreement of the parties. Attachment G is hereby incorporated
in and made an integral part of this Schedule.
	 
	X.	 	GOVERNANCE
	 
	 	 	Ridge Local Affiliate and Client Local Affiliate shall each appoint at least two (2) senior
level managers to a joint committee that shall meet no less than monthly to address issues
that may arise in connection with the performance of the Services. In addition to the
foregoing but without prejudice to the obligations of the parties under this Schedule or the
Master Services Agreement, the parties have agreed to the detailed governance provisions set
forth in Exhibit C to the Master Services Agreement.
	 
	 	 	Ridge Local Affiliate shall provide to Client Local Affiliate the reports set forth in
Attachment F. Attachment F is hereby incorporated in and made an integral part of this
Schedule.
	 
	XI.	 	TAPE RECORDING
	 
	 	 	Unless otherwise prohibited by applicable Law, the parties shall have the right to record
telephone conversations between themselves, and waive any right to further notice of any
such recording. The parties agree to make such recordings available to each other upon
reasonable notice.
	 
	XII.	 	THIRD PARTY VENDOR SERVICES
	 
	 	 	Client Local Affiliate may contract directly with and in such case will be responsible for
(i) complying with the terms and conditions of use relating to additional third party
products or services not affiliated with Ridge Local Affiliate set forth in Attachment A
that it elects to receive or access through Ridge Local Affiliate from time to time and
(ii) the costs relating thereto as applicable, other than those third party products or
services integrated into the Services or provided as part of the Services. If third party
products or services, including, without limitation, data, are provided by or through Ridge
Local Affiliate to Client Local Affiliate or integrated into the Services or provided as
part of the Services, Ridge Local Affiliate shall obtain and warrants and represents that it
has the full right, title or license required to provide such product or service to Client
Local Affiliate. Additionally, Ridge Local Affiliate hereby grants to Client Local
Affiliate and customers of Client Local Affiliate the right to use such product or service
during, and for the purposes of, and in accordance with, the Master Services Agreement and
this Schedule.
	 
	 	 	Client Local Affiliate shall be responsible for complying with the terms and conditions of
use (to the extent such terms and conditions of use are provided by Ridge Local Affiliate to
Client Local Affiliate) relating to the third party products or services that it receives or
accesses through Ridge Local Affiliate and the costs relating thereto. If (i) any third
party products or services, or Ridge-owned products or services, provided by Ridge Local
Affiliate become unavailable and require replacement, (ii) Ridge Local Affiliate, upon
notice to Client Local Affiliate (and upon Client Local Affiliate’s consent, if and to the
extent such consent is required by Law), elects to replace any third party products or
services or Ridge-owned products or services provided by Ridge Local Affiliate with new or
different third party products or services or Ridge-owned products or services or (iii) at
least fifty percent (50%) of Ridge Local Affiliate’s clients utilizing such products or
services in the Territory request such replacement, in each case, Ridge Local Affiliate
shall replace such products or services with equivalent or enhanced products or services
without increased cost.
	 
	 	 	Client Local Affiliate may contract directly with any vendor or subcontractor of Ridge Local
Affiliate for the services provided by such vendor or subcontractor through Ridge Local
Affiliate; provided, however, that (a) such contract does not violate Ridge Local
Affiliate’s obligations to such vendor or subcontractor and (b) Client Local Affiliate shall
be responsible for the cost of any transition services (including, without limitation, any
incremental costs resulting from the transition) in connection therewith.





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	XIII.	 	OBLIGATIONS FOR RECEIPT OF DATA











	 	 	Client Local Affiliate may be using data set forth in Attachment D hereto provided by FT
Interactive Data Corporation (“FT Interactive”). In such case, Client Local Affiliate
agrees to the provisions attached hereto as Attachment D relating to its use of FT
Interactive Data Corporation data in respect of the Services. Attachment D is hereby
incorporated in and made an integral part of this Schedule. Client Local Affiliate shall be
under no obligation to receive FT Interactive Data Corporation data through Ridge Local
Affiliate and to such extent, the previous sentence shall not apply and Ridge Local
Affiliate shall not be responsible for the provision of such services to Client Local
Affiliate in such case or have any liability for such non-Ridge Local Affiliate FT
Interactive Data Corporation services that Client Local Affiliate decides to receive. Ridge
Local Affiliate warrants and represents that it has full right, title or license required to
provide such data to Client Local Affiliate for use in the Services. Additionally, Ridge
Local Affiliate hereby grants to Client Local Affiliate the right to use and store such data
pursuant to the terms and conditions of Attachment D, for the purposes of Client Local
Affiliate providing services to its customers in the course of Client Local Affiliate’s
standard commercial operations.
	 
	XIV.	 	ACQUISITION OF OR BY ANOTHER RIDGE LOCAL AFFILIATE CLIENT
	 
	 	 	In the event that Client Local Affiliate acquires, or is acquired by, by stock, acquisition
of substantially all the assets of, merger, or consolidation (a “Business Combination”), a
Client Local Affiliate of Ridge Local Affiliate’s Brokerage Services Group that receives
trade processing services substantially similar to the Services provided under this Schedule
(the “Other Entity”), and Client Local Affiliate and the Other Entity, or the resulting
entity as the case may be, consolidate the trade processing carried out under this Schedule
with the trade processing carried out by the Other Entity prior to the termination or
expiration of the Client Local Affiliate’s or the Other Entity’s schedule relating to trade
processing services substantially similar to the Services provided under this Schedule so
that it is processed by Ridge Local Affiliate as one entity, all service charges, including,
without limitation, the Base Fee and any other applicable tiered fees applicable for the
brokerage processing services provided by Ridge Local Affiliate shall be renegotiated in
good faith between Ridge Local Affiliate and Client Local Affiliate. Otherwise, the Ridge
Local Affiliate agreements with Client Local Affiliate and the Other Entity agreements in
place prior to the Business Combination shall remain in effect for the respective services
provided by Ridge Local Affiliate or any other Ridge Local Affiliate’s Brokerage Services
Group entity until the termination or expiration of such agreements. For clarity and
notwithstanding anything to the contrary, Client Local Affiliate and the Other Entity shall
be free to consolidate their trade processing after the termination or expiration of either
of their agreements or relevant Schedule with Ridge Local Affiliate or any entity of the
Ridge Local Affiliate Brokerage Services Group without restriction and without any
obligation to renegotiate any fees relating to trade processing or otherwise. In the event
Client Local Affiliate participates in a Business Combination with an entity that is not a
client of Ridge Local Affiliate’s Brokerage Services Group that receives trade processing
and/or operations support services substantially similar to the Services provided under this
Schedule, all rates in Attachment B (including, without limitation, the Base Fee and any
other applicable tiered fees applicable for the brokerage processing services) provided by
Ridge Local Affiliate shall remain as set forth in Attachment B, subject to the adjustments
described therein.
	 
	XV.	 	CLIENT LOCAL AFFILIATE RESPONSIBILITIES
	 
	 	 	Client Local Affiliate shall be responsible, to the extent necessary for the Services
it is receiving, in connection with the use of the Services for the following:






	 	A.	 	User security administration for the Services in accordance with, and as set
forth in, the relevant product specifications and user documentation.
	 
	 	B.	 	Forms and supplies required by Ridge Local Affiliate in connection with the
performance of the Services, which are agreed to by the parties in writing. Ridge
Local Affiliate shall provide Client Local Affiliate with reasonable advance notice of
any such requirements.
	 
	 	C.	 	Equipment, other than equipment provided by Ridge Local Affiliate, at Client
Local Affiliate’s location required in use of the Services (e.g., printers, terminals)
as identified by Ridge Local Affiliate in writing.
	 
	 	D.	 	Dial backup ISDN circuits or other equivalent backup solution selected by
Client Local Affiliate.




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	 	E.	 	Third party telecommunications services not otherwise set forth in
Attachment B.
	 
	 	F.	 	Hardware, software, and telecommunications products required to interface to
the Services (e.g., terminal emulation software), other than any such hardware,
software, and telecommunications products provided by Ridge Local Affiliate.
	 
	 	G.	 	Special equipment, which Client Local Affiliate may elect to place at Ridge
Local Affiliate locations, if required by Client Local Affiliate, specific to Client
Local Affiliate’s use of the Services as agreed to by the parties in writing.
	 
	 	H.	 	Use commercially reasonable efforts to obtain the approval of each relevant
regulatory or self-regulatory agency or entity, if any, with regulates Client Local
Affiliate’s receipt of the Services (including, without limitation, securities and
commodities exchanges, associations of securities and/or commodities dealers, federal,
provincial and local Governmental Authorities).






	 	 	For the avoidance of doubt, Ridge Local Affiliate shall not be responsible for its
failure to provide Services solely to the extent caused by the failure of Client Local
Affiliate to perform the above listed requirements. Ridge Local Affiliate shall (i) provide
Client Local Affiliate with reasonable notice of Client Local Affiliate’s failure to perform
any of its responsibilities set forth in this Schedule and (ii) use commercially reasonable
efforts to perform notwithstanding Client Local Affiliate’s failure to perform, subject to
Client Local Affiliate reimbursing Ridge Local Affiliate for any reasonable incremental cost
to Ridge Local Affiliate in connection with such efforts.
	 
	XVI.	 	REQUIRED PROVISION OF SYBASE, INC.
	 
	 	 	Client Local Affiliate acknowledges and agrees that the Sybase SQL Server Program and the
Sybase Replication Server Program (the “Programs”) to the extent incorporated into the
Services and used in connection with Ridge Local Affiliate’s BPS Advantage product, if
selected and received by Client Local Affiliate, shall only be used by the Client Local
Affiliate as set forth below to read, in a view-only format, the Services, and the Programs
shall not be downloaded or used to create or alter tables, schemas or databases or otherwise
develop or modify in any way the applications or performance of other programming tasks.
Notwithstanding the foregoing, Client Local Affiliate may access the Programs through Ridge
Local Affiliate tools or third party tools; provided, however, that any access shall be
restricted to the following: Client Local Affiliate may access the Services embedding a
copy of the Programs which are deployed on Ridge Local Affiliate’s premises or Client Local
Affiliate’s site, provided, however, that in either instance, Client Local Affiliate shall
not (i) copy the application(s) embedding the Programs, (ii) use the Programs other than to
process Client Local Affiliate’s own transactions, transactions for entities that are
correspondents or customers of the Client Local Affiliate and transactions for entities that
operate on a fully disclosed basis through Client Local Affiliate as correspondents, or
(iii) access the Programs for general development. Client Local Affiliate may also develop
applications against the BPS Advantage database using tools supplied by Ridge Local
Affiliate, Sybase or other third parties.
	 
	XVII.	 	SEVERABILITY
	 
	 	 	If any provision of this Schedule should be held invalid or unenforceable in a court of law
in any jurisdiction, such invalidity or unenforceability shall not affect the enforceability
of this Schedule or any other provision thereof. In addition, the parties agree that it is
their intention that such provision shall be construed in a manner designed to effectuate
the purposes of this Schedule to the fullest extent enforceable under applicable Law. The
parties further agree that such ruling shall not affect the construction of that provision
or any other of the provisions in any other jurisdiction.
	 
	XVIII.	 	DISASTER RECOVERY; BUSINESS CONTINUITY
	 
	 	 	Ridge Local Affiliate shall maintain the disaster recovery and business continuity services
as set forth in Attachment E. Attachment E is hereby incorporated in and made an integral
part of this Schedule.
	 
	XIX.	 	INTENTIONALLY LEFT BLANK
	 
	XX.	 	INTENTIONALLY LEFT BLANK




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	XXI.	 	CHANGES TO THE MASTER SERVICES AGREEMENT
	 
	 	 	The following general changes shall be made to the Master Services Agreement when
incorporating the terms and conditions of the Master Services Agreement into this Schedule:
NONE.




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IN WITNESS WHEREOF the parties have executed this Schedule as of the date first written above.




	 	 	 	 	 
	 	BROADRIDGE FINANCIAL SOLUTIONS (CANADA) INC.

 	 
	 	By:  	/s/ Michael Dignam
 	 
	 	 	      Name:  	Michael Dignam 	 
	 	 	      Title:  	President 	 
	 
	 	PENSON FINANCIAL SERVICES CANADA INC.

 	 
	 	By:  	/s/ Philip A. Pendergraft
 	 
	 	 	      Name:  	Philip A Pendergraft 	 
	 	 	      Title:  	Director 	 



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ATTACHMENT A




DESCRIPTION OF OUTSOURCED SERVICES


Ridge Local Affiliate shall provide the following services to Client Local Affiliate in connection
with this Schedule:





	(1)	 	Subject to the last paragraph of this Attachment, the operational support services and
functions with respect to Client Local Affiliate’s business immediately prior to the Schedule
Effective Date as set forth in Appendix 3 (the “Existing Operations Support Services”).
	 
	(2)	 	Subject to the last paragraph of this Attachment, all of the technology and processing
services and functions that Client Local Affiliate outsourced to third parties immediately
prior to the Effective Date (provided, however, that Ridge Local Affiliate has the right to
exclude certain technologies, processing services or functions in the event Ridge Local
Affiliate does not offer a comparable technology, processing service or function), including,
without limitation, the services provided by the third parties set forth in Appendix 4 (the
“Existing Technology Services”). Notwithstanding anything to the contrary herein, the
Existing Technology Services shall include the services set forth in the Existing Canadian
Agreement (including the services described in the Pricing Schedule thereto), including,
without limitation all Software, technology and order and transaction types provided to Client
Local Affiliate in connection therewith.




The parties agree to work in good faith to revise Appendix 3 and Appendix 4 prior to the Closing
Date in order to add or remove in-scope Existing Operations Support Services and Existing
Technology Services as deemed necessary and appropriate by Client in Client’s sole discretion;
provided, however, that any such changes to Appendix 3 and Appendix 4 shall not in any event cause
a reduction in the Base Fee with respect to the Existing Operations Support Services plus the
Existing Technology Services (as described in Section I(1) of Attachment B-1) below U.S.
$[****] in the aggregate for the Existing Operations Support Services and the Existing
Technology Services provided under this Schedule and the “Service Bureau and Operations Support
Services” Schedules for the United Kingdom and the U.S.




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Appendix 1 to Attachment A



Intentionally left blank.




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Appendix 2 to Attachment A



Intentionally left blank.




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Appendix 3 to Attachment A




Existing Operations Support Services – Canada



[****]



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Appendix 4 to Attachment A




Existing
Technology Services – Canada


[****]




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Appendix 5 to Attachment A



Intentionally left blank.




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ATTACHMENT B




Service Bureau and Operations Support Services Price Schedule




	1.	 	Charges for the Services. The charges for the Services are set forth in Attachment B-1.
	 
	2.	 	Changes to Schedule B. The parties agree, subject to the Change Control Procedures set forth
in Exhibit C to the Master Services Agreement, that any changes that the Client Local
Affiliate makes from time to time that result in the addition or removal of specific Service
functions (including, without limitation, material changes required by Applicable Law or by a
regulatory body) may require changes to the charges payable by Client Local Affiliate.
	 
	3.	 	Postage. Notwithstanding anything herein to the contrary, postage shall be billed to Client
Local Affiliate on a pass-through basis.
	 
	4.	 	Customization. Any customization work shall be provided pursuant to a rate schedule to be
agreed upon by the parties no later than the Closing Date.





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Attachment B-1




Base Fee and Tiered Fees


[****]




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ATTACHMENT C




SERVICE LEVELS



I. INTRODUCTION



In order to maintain the specified Service Levels for the Services set forth in Attachment C-1, the
parties have agreed that certain defined Service Levels (the “SLAs”) are to be established and
measured as set forth below. SLAs related to the Services shall be established by the parties no
later than [****] after the Schedule Effective Date. New Service Levels may be added during the
Schedule Term, and existing Service Levels may be modified or eliminated, by the mutual agreement
of the parties from time to time.




II. OPERATIONS




A. General



Commencing on the Live Date and subject to this Section II, Ridge Local Affiliate’s provision of
the Services shall be in accordance with the Service Levels identified in Attachment C-1.




B. Reports; Performance Review; Corrective Action




     (a) Ridge Local Affiliate shall, wherever the parties agree to use objective data, utilize
continuous measurement and data capture and shall prepare a reasonably detailed report with respect
to the Service Levels) (each, a “Service Level Report”). Service Level Reports shall be provided
to Client Local Affiliate on a monthly basis.



     (b) Ridge Local Affiliate and Client Local Affiliate shall meet at least quarterly to review
Ridge Local Affiliate’s performance with respect to the Services during the immediately preceding
quarterly period and the Service Level Reports connected therewith, and, with respect to Ridge
Local Affiliate’s failure to achieve any Service Levels, the parties shall (1) jointly formulate a
formal action plan for corrective action, as applicable, and (2) agree upon the appropriate
consequences if such action plan does not prevent subsequent instances of the same Service Level
failures.



     (c) The specific criteria for each Service Level shall be detailed in the applicable SLA set
forth in Attachment C-1. Prior to Live Date, the parties shall modify such Service Levels, create
such additional Service Levels, or modify the method used to measure performance (including,
without limitation, appropriate objective data, quality control process or other methods) as the
parties mutually agree in writing.



     (d) [****], the parties shall measure actual Ridge Local Affiliate performance levels in the
manner previously agreed to by the parties, and review the method used to measure performance and
such performance. The parties shall discuss in good faith any appropriate modifications to the
method used to measure performance, the Service Levels or any remedial steps required to be taken
by Ridge Local Affiliate in light of such review and shall, at least once annually during the
Schedule Term, engage in such good faith discussions to determine any appropriate modifications to
the method used to measure performance, the Service Levels or any remedial steps required to be
taken by Ridge Local Affiliate in light of such review.



C. Changes to the Service Levels




     (a) The parties acknowledge that the Service Levels shall be subject to continuous improvement
and that changing circumstances may necessitate modifications to service, expectations and
responsibilities. Accordingly, the parties shall, at least once annually during the Schedule Term,
engage in good faith discussions to determine if (i) any modifications to the existing Service
Levels are necessary or advisable, (ii) any existing Service Levels should be deleted and (iii) any
new Service Levels should be added.



     (b) For all new Service Levels, the parties shall mutually agree upon the Service Level
targets and the methodology and tools used to measure performance. The parties shall mutually
agree on any Service Level target based on [****] of measurements of the applicable Service Level
utilizing the agreed upon methodology and tools.



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Any dispute regarding the establishment of such Service Level targets or the methodology and
tools used to measure performance shall be resolved by the Executive Governance Committee. In
addition, the Executive Governance Committee shall review Service Level targets and performance and
shall give weight to Client Local Affiliate’s recommendations for continuous improvement of Service
Level targets, based on, among other things, advances in technology.




D Service Level Credits



The amount of Service Level Credits credited to Client Local Affiliate with respect to all Category
1 service level failures occurring in a single month shall not exceed, in total, [****] of the
monthly charges payable in connection with the Schedule for that month (the “Service Level Credit
Pool – Category 1”). The amount of Service Level Credits credited to Client Local Affiliate with
respect to all other service level failures occurring in a single month shall not exceed, in total,
[****] of the monthly charges payable in connection with the Schedule for that month (the “Service
Level Credit Pool – All Other Categories”, and together with the Services Level Credit Pool –
Category 1, the “Service Level Credit Pools”). The Service Level Credit Pools shall be allocated
to various Service Levels as set forth in Attachment C-1. The parties shall, at least once
annually during the Schedule Term, engage in good faith discussions to determine if any
modification to the allocation of the Service Level Credit Pools set forth in Attachment C-1 are
necessary or advisable.




E. Root-Cause Analysis



In the event Ridge Local Affiliate has a Service Level failure that is not insignificant, Ridge
Local Affiliate shall perform a root-cause analysis as described in Section 1.C of the Master
Services Agreement.




F. Excuse



Ridge Local Affiliate shall be excused from performing any Service or obligation hereunder,
including, without limitation, the attainment of any Service Level, if and to the extent Ridge
Local Affiliate’s failure to perform such Service or obligation is caused by Client Local
Affiliate’s or its agents’ act or omission, including, without limitation, (a) Client Local
Affiliate providing incomplete or inaccurate data, specifications or requirements; and
(b) failures, errors or defects in facilities, equipment, materials or other resources provided by
Client Local Affiliate, including, without limitation, telecommunications, hardware, infrastructure
and network connectivity.




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Attachment C-1




SLAs


The parties shall include a Service Level for development work no later than [****] after the
Schedule Effective Date.




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ATTACHMENT D




No Warranty and Limitation on Liability Provisions

Required by Users of Third Party Data



No Warranties



EXCEPT IN CONNECTION WITH CONTRACTS OF THIRD PARTY DATA SUPPLIERS WITHOUT CONTRACTUAL RESTRICTIONS
SIMILAR TO THOSE BELOW, NO THIRD PARTY DATA SUPPLIERS MAKE ANY WARRANTIES, EXPRESS OR IMPLIED, AS
TO MERCHANTABILITY, FITNESS OR ANY OTHER MATTER.




Limitation on Liability



(a) No third party data supplier shall have any liability to Client Local Affiliate, or any other
third party, for errors, omissions or malfunctions in the services provided by such third party
data supplier, other than the obligation to endeavor, upon receipt of notice from Client Local
Affiliate, to correct a malfunction, error, or omission in any such services.



(b) Client Local Affiliate acknowledges that the services provided by any third party data supplier
are intended for use as an aid to institutional investors, registered brokers or professionals of
similar sophistication in making informed judgments concerning securities.



Client Local Affiliate accepts responsibility for, and acknowledges it exercises its own
independent judgment in, its selection of any of the services provided by any third party data
supplier, its selection of the use or intended use of such, and any results obtained. Nothing
contained herein shall be deemed to be a waiver of any rights existing under applicable law for the
protection of investors.



(c) Client Local Affiliate shall indemnify Ridge Local Affiliate’s third party data suppliers
(including, without limitation, FT Interactive) against and hold such third party data suppliers
harmless from any and all losses, damages, liability, costs, including, without limitation,
attorney’s fees, resulting directly or indirectly from any claim or demand against such third party
data suppliers by a third party arising out of or related to the accuracy or completeness of any
services received by Client Local Affiliate, or any data, information, service, report, analysis or
publication derived therefrom. No third party data supplier shall be liable for any claim or
demand against Client Local Affiliate by a third party.



(d) As between a third party data supplier and Client Local Affiliate, neither party shall be
liable for (i) any special, indirect or consequential damages (even if advised of the possibility
of such), (ii) any delay by reason of circumstances beyond its control, including, without
limitation, acts of civil or military authority, national emergencies, labor difficulties, fire,
mechanical breakdown, flood or catastrophe, acts of God, insurrection, war, riots, or failure
beyond its control of transportation or power supply, or (iii) any claim that arose more than one
(1) year prior to the institution of suit therefor.




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ATTACHMENT E




DISASTER RECOVERY; BUSINESS CONTINUITY


To be agreed upon by the parties within [****] after the Schedule Effective Date.




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ATTACHMENT F




REPORTS


To be agreed upon by the parties within [****] after the Schedule Effective Date.




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ATTACHMENT G




RECORD RETENTION POLICY


To be agreed upon by the parties within [****] after the Schedule Effective Date.




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