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Exhibit 4.1    
    

	COMMON STOCK

PAR VALUE $.01	 	[ARCHIPELAGO LOGO]	 	COMMON STOCK

THIS CERTIFICATE IS TRANSFERABLE IN NEW YORK, NY OR CHICAGO, IL
	Certificate

Number
 ZQ 000266	 	ARCHIPELAGO HOLDINGS, INC.

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE	 	Shares

**600620******

***600620*****

****600620****

*****600620***

******600620**
	

THIS CERTIFIES THAT	
 	
MR. SAMPLE & MRS. SAMPLE &

MR. SAMPLE & MRS. SAMPLE	
 	

CUSIP 03957A 10 4

SEE REVERSE FOR CERTAIN DEFINITIONS
	

is the owner of	
 	
***SIX HUNDRED THOUSAND

SIX HUNDRED AND TWENTY***	
 	

 

FULLY-PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF 

Archipelago Holdings, Inc. (hereinafter called the "Company"), transferable on the books of the Company in person or by duly authorized attorney,
upon surrender of this Certificate properly endorsed. 

THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY, ARE ISSUED AND SHALL BE HELD SUBJECT TO ALL OF THE PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND BYLAWS OF THE COMPANY
(COPIES OF WHICH ARE ON FILE WITH THE COMPANY AND WITH THE TRANSFER AGENT), TO ALL OF WHICH EACH HOLDER, BY ACCEPTANCE HEREOF, ASSENTS.

This
Certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar. 

Witness the facsimile seal of the Company and the facsimile signatures of its duly authorized officers. 

	 	 	 	 	DATED (Month, Day, Year)
	Gerald D. Putnam
 Chairman and Chief Executive Officer	 	[SEAL]	 	COUNTERSIGNED AND REGISTERED:
 COMPUTERSHARE INVESTOR SERVICES LLC

(CHICAGO)

TRANSFER AGENT AND REGISTRAR,
	
Kevin J.P. O'Hara
 Corporate Secretary	
 	

By	
 	

    
 AUTHORIZED SIGNATURE

SECURITY
INSTRUCTIONS ON REVERSE 

14969

The
following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: 

	TEN COM	—	as tenants in common	UNIF GIFT MIN ACT—	 
	TEN ENT	—	as tenants by the entireties	 	                       Custodian	               
	JT TEN	—	as joint tenants with right of	 	(Cust)                 	  (Minor)
	 	 	survivorship and not as tenants in common	 	under Uniform Gifts to Minors Act
	 	 	 	 	                                    

(State)
	

 	

 	

 	

UNIF TRF MIN ACT—	

 
	 	 	 	 	                       Custodian (until age     )	               
	 	 	 	 	(Cust)                 	  (Minor)
	 	 	 	 	under Uniform Transfers to Minors Act
	 	 	 	 	                                    

(State)

Additional abbreviations may also be used though not in the above list. 

ARCHIPELAGO HOLDINGS, INC.  

THE
COMPANY WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS, A SUMMARY OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH
CLASS OF STOCK OF THE COMPANY. SUCH REQUEST MAY BE MADE TO THE OFFICE OF THE CORPORATE SECRETARY OF THE COMPANY OR TO THE TRANSFER AGENT. THE COMPANY MAY REQUIRE THE OWNER OF A LOST, STOLEN OR
DESTROYED STOCK CERTIFICATE, OR HIS LEGAL REPRESENTATIVES, TO GIVE
THE COMPANY A BOND TO INDEMNIFY IT AGAINST ANY CLAIM THAT MAY BE MADE AGAINST IT ON ACCOUNT OF THE ALLEGED LOSS, THEFT OR DESTRUCTION OF ANY SUCH CERTIFICATE. 

RESTRICTIONS ON TRANSFER AND OWNERSHIP FOR ALL SHAREHOLDERS  

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND/OR OWNERSHIP LIMITATIONS SET FORTH IN ARTICLE FOURTH OF THE CERTIFICATE OF INCORPORATION OF THE COMPANY (THE
"CERTIFICATE OF INCORPORATION"). A COPY OF THE CERTIFICATE OF INCORPORATION IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY AND WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE
HOLDER HEREOF UPON WRITTEN REQUEST. THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE SOLD, EXCHANGED, TRANSFERRED, ASSIGNED, PLEDGED, PARTICIPATED, HYPOTHECATED OR OTHERWISE DISPOSED OF ONLY IN
ACCORDANCE WITH ARTICLE FOURTH OF THE CERTIFICATE OF INCORPORATION. 

THE
VOTING POWER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS AND LIMITATIONS SET FORTH IN ARTICLE FOURTH OF THE CERTIFICATE OF INCORPORATION. 

For
value received,              hereby sell, assign and transfer unto 

	PLEASE INSERT SOCIAL SECURITY OR OTHER

IDENTIFYING NUMBER OF ASSIGNEE	 
	    
	 

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE) 

Shares of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint 

Attorney to transfer the said stock on the books of the within-named Corporation with full power of substitution in the premises. 

	Dated:	 	    
	 	20	    
	 	Signature:	 	    

	

Signature(s) Guaranteed:	
 	

Signature:	
 	

    

	BY:	 	    
	 	 	 	 
	THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM,
PURSUANT TO S.E.C. RULE 17Ad-15.	 	Notice:	 	THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.

SECURITY INSTRUCTIONS

THIS IS WATERMARKED PAPER. DO NOT ACCEPT WITHOUT NOTING                [MAP]

WATERMARK HOLD TO LIGHT TO VERIFY WATERMARK. 

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Exhibit 4.1Exhibit
10.6

 

AMENDMENT OF LICENSE AND
DISTRIBUTION AGREEMENT

 

This Amendment is made as of the 11th day of May, 2004,
between ARCHIPELAGO HOLDINGS, L.L.C., a
Delaware limited liability company (“Archipelago”), and TOWNSEND
ANALYTICS, LTD., an
Illinois corporation (“TAL”).

 

1.                                       Reference is hereby made to that certain
License and Distribution Agreement dated as of January 7, 1999 (the “Agreement”),  between Archipelago and TAL. All capitalized
terms used herein and not otherwise defined shall have the meanings ascribed
thereto in the Agreement.  TAL agrees to
waive the RealTrade order entry fee under Section 4.1(a)(ii) of the
Agreement, in consideration of the following:

 

2.                                       The parties agree that from and after May
15th, 2004, in lieu of the monthly royalty amount
due and payable under Section 4.1(a)(i) of the Agreement, Archipelago
shall pay to TAL the applicable license fees set forth in the Schedule A
of the standard TAL Subscriber Agreement now or hereafter in effect for each
RealTick licensed to Archipelago or to any Archipelago Subscriber during any
month.

 

3.                                       In addition the royalties due in
Section 2 above, Archipelago shall pay to TAL $*** per month.

 

4.                                       The parties agree that the fee specified in
Section 3 above was determined based on the usage and behavior patterns
with respect to orders entered by Archipelago or the Archipelago Subscribers at
the time of this Agreement.  The parties
agree that should such behavior change in any material manner, and if as a result
of such change either party reasonably and in good faith believes that an
adjustment in the amount of the payments owing by Archipelago to TAL under this
Amendment is necessary and appropriate, then the parties shall in good faith
negotiate a fair and equitable adjustment to such amount. If the parties are
unable to reach an agreement regarding such adjustment, either party may
terminate the Agreement upon not less than 90 days prior notice of such
termination to the other party.

 

5.                                       Except as expressly provided herein, the
Agreement shall remain in full force and effect in accordance with its terms.

 

IN WITNESS
WHEREOF, the parties hereto have duly executed this Amendment as of the date
written above.

 

	
  ARCHIPELAGO HOLDINGS,
  L.L.C.

  	
   

  	
  TOWNSEND ANALYTICS, LTD.

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/Michael
  Cormack

  	
   

  	
   

  	
  By:

  	
    /s/MarrGwen
  Townsend

  	
   

  
	
  Title:

  	
    President

  	
   

  	
   

  	
  Title:

  	
    VP

  	
   

  

 

 

*** Certain information
on this page has been omitted and filed separately with the Commission.
Confidential treatment has been requested with respect to the omitted portions.Exhibit
10.9

 

FULLY DISCLOSED CLEARING AGREEMENT

BETWEEN
SPEAR, LEEDS & KELLOGG

AND

WAVE SECURITIES LLC

 

This AGREEMENT is made
and entered into as of this 7th day of May, 2004 by and between
Spear, Leeds & Kellogg, L.P. (“SLK”) and Wave Securities LLC (“Broker”).

 

1.                                      Subject to the
approval of the New York Stock Exchange (“NYSE”), from the opening of business
on the date of NYSE approval until the termination of this Agreement as
provided for in Paragraph 19, hereof, SLK will carry the cash and margin accounts
of the customers introduced by Broker to SLK, and accepted by SLK, and will
clear transactions on a fully disclosed basis for such accounts, all as more
specifically provided in Paragraph 4 hereof, and subject to the terms and
conditions hereinafter set forth.

 

All references made to
margin accounts in this agreement shall apply only if Broker introduces such
accounts and they are accepted by SLK.

 

2.                                      Laws and
Regulations.  The term “Applicable
Laws and Regulations,”  as referred
to in this Agreement, includes the following:  any applicable federal, state or
foreign laws, including the Securities Act of 1933 (the “Securities Act”), the
Securities Exchange Act of 1934 (the “Exchange Act”), the Investment Company
Act of 1940 and the Investment Advisers Act of 1940, the Employee Retirement
Income Security Act of 1974 (“ERISA”), all anti-money laundering and related
federal statutes, rules or regulations, including the Bank Secrecy Act (“BSA”)
as modified by the USA PATRIOT Act, and any Executive Orders administered by
the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”); the
rules of the Securities and Exchange Commission (the “SEC”), of any state
securities authority, of any “self-regulatory organization” (“SRO”) (as defined
in Section 3 of the Exchange Act), including the New York Stock Exchange, Inc.
(the “NYSE”) and the National Association of Securities Dealers, Inc., (the
“NASD”) or of any other regulatory body or agency having authority over a
transaction or an account (collectively, the “Applicable Laws and
Regulations”).  For purposes of this
Agreement, if you are not a member of the NYSE, you agree that in each case
where there is a reference in this Agreement to a rule of the NYSE (the “NYSE
Rules”) you will comply with the comparable rules of the NASD.

 

3.                                      Representations
and Warranties

 

(a)                                  Broker
represents, warrants, and covenants to SLK that:

 

(1)                                  Broker
is and will remain during the term of this Agreement duly registered and in
good standing as a broker-dealer with the Securities and Exchange Commission
(“SEC”) and in full compliance with all Applicable Laws and Regulations
including the rules and regulations of the SEC, including but not limited to
the net capital, financial reporting and customer protection requirements.

 

(2)                                  Broker
is and will remain during the term of this Agreement a member firm in good
standing with the National Association of Securities Dealers (“NASD”) and in
full compliance with the bylaws, rules, guidelines and standards thereof.

 

(3)                                  Broker
is in full compliance with the constitution, bylaws, rules, guidelines,
practices and customs of every national securities exchange and association of
which it is a member.

 

 

(4)                                  Broker
has fulfilled all registration and other requirements of all states and the District
of Columbia to the extent such registration or other requirements are
applicable to Broker.

 

(5)                                  Broker
has all requisite authority, whether arising under applicable federal or state
laws, or the rules and regulations of any securities exchange or regulatory
authority to which Broker is subject, to enter into this Agreement and to
retain the services of SLK in accordance with the terms hereof.

 

(6)                                  Broker
hereby represents that it has obtained a Brokers Blanket Bond and lists SLK as
a party to be notified if said Bond’s monetary limits are reduced or if said
Bond is cancelled.

 

(7)                                  Broker is in full compliance, and during the
term of this Agreement will remain in compliance, with all Applicable Laws and
Regulations, including any applicable
federal, state, or foreign anti-money laundering laws and regulations,
including the Bank Secrecy Act as amended by the USA PATRIOT Act; including
federal and state criminal statutes; rules and regulations of the U.S.
Department of Treasury; the SEC; any state regulatory authority; and the NYSE
and the NASD, as relevant, as well as the sanctions and embargo programs
administered by OFAC.

 

(b)                                 SLK
represents, warrants and covenants that:

 

(1)                                  SLK
is and will remain during the term of this Agreement duly registered and in
good standing as a broker-dealer with the SEC and is a member firm in good
standing with the NYSE and the NASD.

 

(2)                                  SLK
has all requisite authority, whether arising under applicable federal or state
laws, or the rules and regulations of any securities exchange or regulatory
authority to which SLK is subject, to enter into this Agreement and perform its
obligations hereunder; and

 

(3)                                  SLK
is in full compliance, and during the term of this Agreement will remain in
full compliance, with the rules and requirements of every regulatory and
self-regulatory organization to whose jurisdiction SLK is subject.

 

(4)                                  SLK is in full compliance, and during the
term of this Agreement will remain in full compliance, with all Applicable Laws
and Regulations, including any applicable
federal, state, or foreign anti-money laundering laws and regulations,
including the Bank Secrecy Act as amended by the USA PATRIOT Act; including
federal and state criminal statutes; rules and regulations of the U.S.
Department of Treasury; the SEC; any state regulatory authority; and the NYSE
and the NASD, as relevant, as well as the sanctions and embargo programs
administered by the Office of Foreign Assets Control (“OFAC”).

 

(5)                                  SLK
has adopted and implemented policies, procedures and information barriers
reasonably designed to ensure that Paragraph 18 herein may be performed in
accordance with its terms.

 

2

 

4.                                      Services
to be Performed by SLK

 

SLK, acting as Broker’s
agent, shall carry the customers’ cash and margin accounts introduced by Broker
and accepted by SLK on a fully disclosed basis, and perform the following
services:

 

(a)                                  Execute
transactions in the customers’ accounts and release or deposit money or
securities to or for the accounts, only upon Broker’s instructions.

 

(b)                                 Prepare
and mail confirmations and summary monthly statements to Broker’s customers on
forms disclosing that the account is carried on a fully disclosed basis for
Broker.

 

(c)                                  Settle
contracts and transactions in securities and securities futures contracts and
options thereon (collectively referred to as “securities”) (i) between Broker
and other brokers and dealers, (ii) between Broker and its customers and (iii)
between Broker and third persons.

 

(d)                                 Perform
cashiering functions for such customers’ accounts, including receipt and
delivery of securities purchased, sold, borrowed and loaned; remittance and
receipt of payments therefor, provision of custody and safekeeping of
securities and cash; and handling of margin accounts, dividends and exchanges,
rights, warrants, redemptions, and tender offers with respect to such
securities.  In this regard, SLK will not accept cash and
certain types of cash equivalents, such as money orders, traveler’s checks, or
cashier’s checks (whether or not in bearer form) or similar instruments in
bearer form.  SLK reserves the right to
reject any transaction that violates these prohibitions or limitations, or that
raises anti-money laundering or OFAC concerns.

 

(e)                                  Mail
to each customer a copy of the Notice to Customers as required by New York
Stock Exchange Rule 382(c).

 

(f)                                    Complete
the transfer of securities and accounts on behalf of customers.

 

(g)                                 Assist
Broker in seeking to ensure compliance with restricted and control securities
under the Securities Act of 1933. 
Broker is responsible for obtaining all the necessary documentation and
making all necessary legal and factual determinations

 

(h)                                 Pursuant
to NYSE Rule 382(d), SLK will furnish any written customer complaint it receives
regarding Broker, or Broker’s associated persons, and relating to the
responsibilities allocated to Broker under this Agreement directly to:

 

(1)                                  Broker;
and

 

(2)                                  Broker’s
Designated Examining Authority (or, if none, to its appropriate regulatory
agency or authority).

 

SLK will also notify the
complaining customer, in writing, that it has received the complaint, and that
the complaint has been furnished to the parties listed in h(1) and h(2) above.

 

(i)                                     SLK
will also utilize vendor databases for the purposes of verifying certain
background information for new accounts as well as for OFAC screening
purposes.  SLK will also utilize vendor
databases for screening wire transfers against the OFAC List.

 

(j)                                     Pursuant
to NYSE Rule 382(e):

 

(1)                                  At
the commencement of this Agreement, and annually thereafter, SLK will furnish
Broker with a list of reports (i.e., exception reports and/or other reports)
that it can 

 

3

 

provide Broker, upon
Broker’s written request, to assist Broker in its supervision and monitoring of
customer accounts.

 

(2)                                  Upon
Broker’s request, SLK will assist Broker in designing appropriate AML reports
for Broker to review.  Broker assumes
full responsibility for reviewing any such reports provided to Broker.

 

(3)                                  SLK
will retain and preserve copies of the reports requested by and/or supplied to
Broker pursuant to NYSE Rule 440 (Books and Records), or will have the ability
to either recreate copies of these reports or provide the report format and data
elements contained in the original.

 

(4)                                  Annually,
within thirty (30) days of July 1st of each year, SLK will give
written notice to Broker’s Chief Executive Officer and Chief Compliance Officer
indicating: (a) the list of reports offered by SLK to Broker described above;
and (b) the specific reports actually requested by and/or supplied to Broker as
of that date.

 

SLK will also provide a
copy of this written notice to Broker’s Designated Examining Authority (or if
none, to its appropriate regulatory agency or authority).

 

(k)                                  SLK,
at the request of Broker, agrees to file a notice pursuant to Section 314 of
the USA PATRIOT Act and the implementing regulations related thereto to permit
the voluntary sharing of information between SLK and Broker.  Upon filing such notice, at Broker’s
request, SLK will forward a copy of the notice filed to Broker.  SLK will comply with all requirements
concerning the use, disclosure, and security of information shared pursuant to
Section 314 of the USA PATRIOT Act.

 

Notwithstanding subparagraphs (a)
through (i) above, SLK may, in its sole discretion, for good cause shown,
refuse to open an account for a specific customer; close an account already
opened; refuse to confirm and/or cancel a confirmation; reject a delivery or receipt
of securities and/or money; refuse to clear any trade executed by Broker; or
refuse to execute any trade for the account of a customer introduced by
Broker.   SLK may take these actions
even if the account has already been opened by Broker or the transaction has
been processed by Broker.

 

Broker acknowledges that
in connection with the performance of the above described services, SLK may
retain, at its option, one or more independent data processing service bureaus
to perform any of the required functions, and agrees that, provided SLK has
exercised due care and diligence in the selection and retention of such service
bureaus, SLK shall not be responsible for any losses, damages, liability or
expenses incurred by, or claims made by, Broker or its customers arising from
the failure of any such service bureau to perform said functions accurately, in
accordance with specifications, or within the customary time periods.  SLK’s only obligation will be to cause any
such service bureau to correct any processing error in its next regularly
scheduled processing, and to deliver any overdue work as soon as reasonably
practicable. In no event shall SLK be responsible for indirect or consequential
damages.

 

5.                                      Services
for which SLK is not Responsible

 

Unless otherwise
expressly agreed in writing, SLK will not provide, nor be responsible for
providing, any of the following services:

 

(a)                                  Accounting,
bookkeeping or record keeping, cashiering, or other services involving
commodity transactions, or any other transaction not involving securities;

 

4

 

(b)                                 Preparation
of Broker’s payroll records, financial statements or any analysis thereof;

 

(c)                                  Preparation
or issuance of checks in payment of Broker’s expenses, other than expenses
incurred by SLK on behalf of Broker pursuant to this Agreement;

 

(d)                                 Payment
of commissions to Broker’s salesmen;

 

(e)                                  Preparation
or filing of any of Broker’s reports to the Securities and Exchange Commission,
any state securities commission, or any securities exchange, securities
association or other membership to which Broker is subject.  However, SLK will, at the request of Broker,
furnish Broker with any necessary information and data contained in records kept
by SLK, and not otherwise available to Broker, for use in making such reports
by Broker.

 

(f)                                    Verification
of address changes of Broker’s customers.

 

(g)                                 Obtaining
and verifying new account information and ensuring that such information meets
the requirements of NYSE Rule 405(1) and any other NYSE Rule including, but not
limited to, any verification or identification requirements in the Bank Secrecy
Act, as amended by the USA PATRIOT Act, except that SLK will provide the
services referenced in Paragraph 4 (i), above.

 

(h)                                 Rendering
investment advice to customers.

 

6.                                      Duties,
Obligations and Responsibilities of Broker

 

(a)                                  Immediate
Notification of Restrictions or Suspensions, 

Net Capital Deficiencies and Other
Matters             

 

Within
24 hours of first becoming aware of same, Broker will provide SLK with written
notification of:

 

(1)                                  any judicial or administrative order, consent agreement, informal
understanding or other document placing conditions upon, restricting or
suspending Broker’s securities business in any respect (whether voluntary or
involuntary);

 

(2)                                  any deficiency in Broker’s net capital in violation of SEC Rule 15c3-1;

 

(3)                                  any formal action, suit, investigation, inquiry, or proceeding, including
indictment, brought against Broker or any senior officer, director, general
securities principal, or financial or operations principal of Broker, by or
before any court or other tribunal, any arbitrator, any governmental authority
or any SRO (in writing and within ten (10) business days of the initiation of
such event); and

 

(4)                                  any other event that adversely and materially impacts Broker’s ability to
carry out its duties and responsibilities under this Agreement.

 

Broker
represents and warrants that all of the above-mentioned and any of the other
information provided by Broker to SLK in connection with this Agreement, as
well as all other information provided by Broker in response to a request by
SLK, is accurate and complete.

 

The failure of Broker to provide the
above-mentioned notification and information shall be considered a material
default under this Agreement and grounds for immediate termination of the
Agreement pursuant to Paragraph
19.

 

5

 

(b)                                 Information
to be supplied by Broker:

 

Broker will provide SLK
with such basic data and documents as shall be necessary or appropriate to
permit SLK to discharge its service obligations hereunder, including, but not
limited to, copies of records of any receipts of customers’ funds and
securities received directly by Broker. 
In all cases, such data and documents must be compatible with the
requirements of SLK’s bookkeeping system.

 

Broker will furnish SLK
with such information and signatures as are requested by SLK or that may be required by law for the
opening and carrying of customer accounts on forms that have been approved by
SLK.

 

Broker will furnish SLK
with such information and documents as are requested by SLK to permit SLK to
satisfy its obligations under the USA PATRIOT Act and implementing regulations
thereunder.

 

All accounts shall be
opened in accordance with SLK’s requirements. Such requirements include, but
are not limited to, the requirement to obtain, prior to account opening, all
customer identification information required under the Bank Secrecy Act, as
amended by the USA PATRIOT Act, and its implementing regulations, including but
not limited to, for each new customer, the customer’s name; date of birth (for
individuals); address(es) (mailing and residential address, for individuals, or
principal place of business for non-natural persons); and a documentary number.
The acceptance or opening of an account without such requirements being
fulfilled shall not be deemed to be a waiver of such requirements. A duly
authorized principal of Broker will approve in writing the opening of each
customer’s account.

 

Broker shall be
responsible for maintaining proper customer addresses and SLK may, for all
purposes, rely on such addresses as they are furnished by Broker.

 

Pursuant to NYSE Rule
382(e)(1), after receiving SLK’s list of available exception reports and/or
other reports, Broker must promptly notify SLK, in writing, of those specific
reports offered by SLK that Broker requires to supervise and monitor its
customer accounts.  Broker shall advise
SLK of exception reports it requires to meet its obligations under the Bank
Secrecy Act, as amended by the USA PATRIOT Act of 2001, and its implementing
regulations, and SLK will endeavor to use its best efforts to prepare such
reports.

 

Pursuant to NYSE Rule
382(f), in those instances where SLK permits Broker to issue checks, whether to
Broker’s customers or to third parties (i.e., parties other than Broker’s
customers), Broker shall represent to SLK, in  writing, that
Broker maintains, and shall enforce, supervisory procedures with respect to the
issuance of such checks.  Such
supervisory procedures must be acceptable to SLK.

 

Broker, at the request of
SLK, agrees to file a notice pursuant to Section 314 of the USA PATRIOT Act and
the implementing regulations related thereto to permit the voluntary sharing of
information between Broker and SLK. 
Upon filing such notice, Broker shall forward a copy of the notice filed
to SLK.  Broker agrees to comply with
all requirements concerning the use, disclosure, and security of information
shared pursuant to Section 314 of the USA PATRIOT Act and implementing
regulations thereunder.

 

(c)                                  Receipt
of money and securities:

 

In all cash accounts,
Broker shall be responsible for all customer purchases until actual and
complete payment therefor has been received by SLK, and, in the case of checks
representing such payment received by SLK, Broker shall be responsible until
the proceeds 

 

6

 

are actually received and
credited to SLK by its bank. SLK agrees to use due diligence in depositing such
checks promptly.  SLK
reserves the right to reject any check or other payment that raises anti-money
laundering or OFAC concerns.

 

Broker shall be
responsible for all sales until acceptable delivery of the securities to SLK has
been made.

 

Broker agrees to promptly
turn over to SLK funds or securities received by Broker from its customers,
together with such information as may be relevant or necessary to enable SLK to
promptly and properly record such remittance and receipts in the customers’
respective accounts.

 

Broker shall arrange for
timely settlement of “delivery versus payment” transactions, and shall not
introduce any retail or individual accounts requiring settlement, on “delivery
vs payment” or “receive versus payment” basis without first obtaining the prior
written approval of the customer allowing SLK to accept “partial deliveries”
and to abide by other clearance arrangements as may be directed by the New York
Stock Exchange, Inc., the American Stock Exchange, Inc., or the NASD.  SLK may, at its option, charge for late
payments or deliveries, any interest incurred by it accrued at its then
prevailing “Brokers Call” rate plus 1% on the principal amount of trade, or at
such other interest rate as may be agreed upon in writing by the parties, above
the Broker’s Call rate.

 

(d)                                 Duties of
Broker with respect to customers:

 

The customer shall remain the customer of Broker, and
Broker shall be responsible for obtaining all of the essential facts relative
to every customer, every cash or margin account, every order, and every person
holding power of attorney over any account accepted by Broker.  Broker shall also be responsible for the
conduct of customer accounts and the supervision thereof, including, but not
limited to, in each case as applicable to Broker’s business, assessing the
suitability of a transaction for the customer when required under applicable
rules, the authenticity of all orders, signatures and endorsements, the
frequency of trading by a customer, and the genuineness of all signatures,
certificates and papers, the status under the Securities Act of 1933 of
securities proposed to be sold or margined by a customer, and reviewing the
accounts and relevant exception reports for, among other things, manipulative
practices and insider trading, and compliance with all federal, state,
securities exchange and association laws, rules and regulations,  including all anti-money laundering laws and
regulations and OFAC programs,to which Broker and customer are subject.

 

Broker undertakes to
comply with NYSE Rule 405 (1), (2) and (3), and with other rules of regulatory
organizations having jurisdiction over Broker. 
It is understood that Broker will establish adequate procedures regarding
Rule 405 and will make a diligent attempt in every case to conform to this
rule.  Broker
shall also comply with any due diligence procedures or requirements relating to
customer identification and verification under the anti-money laundering laws
and regulations including the USA PATRIOT Act and its implementing regulations.  Broker shall diligently supervise compliance
through the use of a compliance manual or other written procedures.

 

Broker must notify SLK in
each case where Broker and a customer authorize a Registered Representative of
Broker to exercise discretion in an account. 
In addition, Broker will advise SLK at the time an order is placed if
such order is for a discretionary account or for an account of one of Broker’s
Registered Representatives.

 

Broker warrants that, to
its best knowledge, the customers introduced to SLK by Broker shall not be
minors and shall not be such as to come under prohibitions referred to in NYSE
Rule 

 

7

 

407, or in any other law,
rule or regulation of any other regulatory authority; that Broker’s customers
shall in fact be the owners of accounts opened by SLK in their names, and that
any orders and instructions given by Broker or any of Broker’s employees shall
have been fully and properly authorized.

 

Prior to engaging in
option trading for any of Broker’s customers, Broker shall deliver to such
customer the most recent copy of the booklet titled “Characteristics and Risks
of Standardized Options”, or its successor, together with any effective
supplements thereto. A current prospectus of the Option Clearing Corporation is
optional. Broker will take all appropriate steps to assure that customers
engaging in such trading are sophisticated investors, fully aware of the risks
involved, and that option trading is suitable for such customers.  Broker will comply in all respects with
SLK’s options compliance program, including the obtaining of information,
written approval of option accounts by the Senior Registered Options Principal
of Broker, and execution of forms required by SLK.  SLK shall not be required to endorse any put or call options for
any account unless the account is satisfactory to SLK.

 

This Agreement places the
responsibility for “knowing the customer,” “suitability,” and “due diligence”  relating to the customer on Broker.  It permits SLK to satisfy itself, for its
own benefit, that Broker has the ability to comply itself, for its own benefit,
and that Broker has the ability to comply and has complied with the requirements
of NYSE Rule 405 and the comparable requirements of similar rules of any other
self-regulatory organization to which Broker belongs.  It is understood that the preparation and/or possession by SLK of
surveillance records or any new data, including exception reports, on behalf
of, or for the use of Broker, shall neither obligate SLK to review such
material nor make SLK responsible to know its contents.  Where SLK undertakes to review such
materials for its own benefit, such activity does not relieve Broker of the
obligation to review such materials or to take appropriate action with respect
to any unusual activity that SLK may bring to Broker’s attention.

 

Within 10 days after the
signing of the Agreement, the Broker will provide notice to SLK both of the
designation of an anti-money laundering compliance officer as discussed more
fully in Paragraph 6(g)(i)(d), and where required, of its notification to the
appropriate regulatory authority of its designation.

 

At or prior to the time
of the opening of each account, the Broker will obtain sufficient information
from its customer to satisfy itself that the customer is the individual or
entity it says it is, that its funds are legitimate, and that the account is
not established or maintained for a prohibited foreign “shell bank,” as defined
by the Bank Secrecy Act, as amended by the USA PATRIOT Act, and that, if the
customer is a foreign bank, Broker has taken reasonable steps to ensure that
the account is not used to indirectly service prohibited foreign shell banks.  Broker will obtain a completed certification
as referenced in Paragraph 6(h)(i)(g)(2) below establishing that the foreign
bank is not a prohibited shell bank, as well as any foreign bank certifications
described in Paragraph 6(h)(i)(g)(3) below, and promptly forward copies of all
such certifications to SLK.

 

At or prior to the time
of the opening of any account, Broker will obtain all customer identification
information required by the Bank Secrecy Act, as amended by the USA PATRIOT Act
of 2001, and its implementing regulations, including but not limited to
documentary numbers such as Taxpayer Identification Numbers (“TIN”) for U.S.
Persons or passport numbers for non-U.S. Persons.  At or prior to the time of the opening of any account, Broker
will obtain a copy of the passport of any foreign individual opening the
account, and where requested, will forward a copy to SLK.

 

8

 

At the time of the
opening of any account, the Broker will obtain sufficient information from its
customer to satisfy itself that opening the account would not violate the
provisions of any laws, rules or regulations.

 

Broker undertakes to
comply with any customer notice provisions under the Bank Secrecy Act, as
amended by the USA PATRIOT Act, and its implementing regulations, concerning
the collection and verification of customer identification information.

 

(e)                                  Regulatory
and Financial Data

 

Upon
executing and returning this Agreement to SLK, Broker shall also provide SLK
with a copy of its most recent FOCUS Report, its Form BD and any amendments
thereto, and Form U-4s (including DRPs, if any) for all individuals listed on
Schedules A and B of Form BD (i.e., direct owners, executive officers, indirect
owners or other control affiliates).  Thereafter, within 48 hours of
SLK’s making a request therefor, Broker agrees to furnish SLK with a copy of
all FOCUS Reports, Broker’s Form BD and any amendments thereto, and any other
regulatory filing or submission pertaining to Broker.  Broker is further required, promptly of any changes or additions
to its Form BD, and Form U-4s for the above individuals, to notify SLK and
provide SLK with updated information relating to such changes or additions.

 

(f)                                    Broker
shall assume all responsibility for reviewing customer orders, and for errors
in execution.

 

(g)                                 Anti-Money
Laundering and OFAC Reporting and Regulatory Obligations

 

Broker recognizes its responsibility to and agrees to comply
with, among others, any applicable anti-money laundering laws and regulatory
rules and, reporting and recordkeeping requirements including, as appropriate,
and to the extent applicable to Broker in light of its business activities, any
federal, state and international criminal and civil prohibitions against money
laundering including the following:

 

(i)                                  The Bank Secrecy Act, including any
amendments thereto under the USA PATRIOT Act, which now requires, or which may
in the future require, among other things:

 

(a)                               reports of any transaction over $10,000 in
currency, including multiple transactions occurring during the course of the
same day, on a Currency Transaction Report, Form 4789 (“CTR”);

 

(b)                               reports of any transportation of more than
$10,000 in currency or monetary instruments into or outside of the United
States on a Report of International Transportation of Currency or Monetary
Instruments, Form 4790 (“CMIR”);

 

(c)                                reports of any suspicious activity on a
Suspicious Activity Report (“SAR” or “SAR-SF”, 
collectively referred to as SARs);

 

(d)                               the establishment of an anti-money
laundering program, consisting of, at a minimum, the development of internal
policies, procedures and controls including a system for monitoring and
identifying suspicious activity, the designation of a compliance officer and
notification of such designation as requested to the appropriate
self-regulatory organization, an ongoing 

 

9

 

employee training program, and an independent audit
function to test such programs;

 

(e)                                recordkeeping, including, but not limited
to, collection and maintenance of records regarding funds transfers of $3,000
or more and the transmission of certain information with such funds transfers;

 

(f)                                   due diligence and enhanced due diligence
policies, procedures and controls for private banking customers, as defined by
the BSA,  including ascertaining the
identity of the nominal and beneficial owners of the account and the source of
funds deposited into the account;

 

(g)                                  conducting enhanced scrutiny of any
accounts, including private banking accounts, requested or maintained by or on
behalf of a senior political figure, any member of the figure’s immediate
family, or any close associate of the figure as defined in the USA PATRIOT Act
of 2001 and implementing regulations thereunder, and the Treasury Guidance of 2001;

 

(h)                               procedures with respect to correspondent accounts as defined by the USA
PATRIOT Act and its implementing regulations, including:

 

(1)                               due diligence and enhanced due diligence
policies, procedures and controls for such correspondent accounts;

 

(2)                               a prohibition on opening, maintaining,
administering or managing such accounts for, or on behalf of, a prohibited
foreign shell bank, as defined in the BSA, as amended by the USA PATRIOT Act,
and its implementing regulations, and obtaining the appropriate
certification(s) concerning foreign shell banks;

 

(3)                               obtaining certification or other evidence of
ownership of any foreign bank for whom an account is maintained, and forwarding
to SLK a copy of the completed certification form or other evidence of ownership,
except that a certification need not be obtained as to ownership where the
shares of the foreign bank are publicly traded or where the foreign bank has
filed a Form FR Y-7 with the Federal Reserve Board;

 

(4)                               as to any foreign bank for whom an account
is maintained, obtaining the name and address of a person that resides in the
United States and is authorized to accept service of legal process for records
regarding such account, and forwarding to SLK a copy of the completed
certification form or other document indicating the foreign bank’s agent for
service of process; and

 

(5)                               prompt notification to SLK upon receipt of
written notice requiring Broker to terminate a correspondent relationship with
a foreign bank where the foreign bank has failed to comply with a summons or
subpoena or failed to initiate proceedings in a United States court contesting
same; and

 

(i)                                  special measures imposed by the Secretary of
the Treasury by order, rule, regulation or as otherwise required, including
additional due diligence for certain customers, accounts or transactions within
or 

 

10

 

involving jurisdictions
identified as a primary money laundering concern, additional recordkeeping and
reporting of certain financial transactions and the obtaining and retaining of
information relating to the beneficial ownership of certain types of accounts;

 

(j)                                   any future regulations which may be imposed
on the Broker involving the obligation to know its customers and their source
of funds, to monitor for and identify suspicious activity, or to undertake
additional due diligence efforts pursuant to any rule, regulation, order or
otherwise as may be required by law.

 

(ii)                              Rules of the SEC and the self-regulatory
organizations relating to currency and other monetary instruments reporting,
suspicious activity reporting and related recordkeeping requirements.

 

(iii)                          Rules of the various bank regulatory
agencies, including the Federal Reserve Board, relating to reporting currency
transactions and suspicious activity, 
including 12 C.F.R. § 208.62.

 

(iv)                            Applicable state reporting and recordkeeping
requirements with regard to certain currency transactions, transportation of
currency or monetary instruments, or reports of suspicious activity.

 

(v)                                The federal statutes, regulations, Executive
Orders and other programs administered by OFAC which prohibit, among other
things, the engagement in transactions with and the provision of services to
certain sanctioned or embargoed foreign countries and other individuals or
entities as listed on the OFAC website (http://www.ustreas.gov/ofac.)

 

SLK reserves the right,
to the extent permissible by law, to reject any transaction or to freeze or
block assets in any account or to terminate an account pursuant to the various
OFAC sanctions programs or pursuant to its obligations under the Bank Secrecy
Act, as amended by the USA PATRIOT Act.

 

SLK requires that, to
the extent permissible by law, Broker provide SLK, at the time of filing,  copies of reports or other communications
with regard to the accounts filed with the U.S. Treasury Department, the
Internal Revenue Service, 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 and
suspicious activity, including, but not limited to, CTRs, CMIRs and SARs.  Further, to the extent permissible by law,
Broker will consult with SLK concerning the potential filing of a SAR regarding
any person with respect to which Broker and SLK share an account
relationship.  Upon filing a SAR with
respect to any such person, Broker will inform SLK of any measures Broker has
taken with respect to the account as a result of the activity which is the
subject matter of the SAR.  To the
extent permitted by law, SLK agrees to provide Broker with copies of any such
reports it files related to any customer with respect to which SLK and Broker
share an account relationship.

 

SLK reserves the right
to make and file such reports where it deems it appropriate in its own
interest; and Broker recognizes that when SLK does so, SLK does not thereby
assume any responsibility for such reporting obligation nor relieve Broker of
its own responsibility for such reporting. 
To the extent that SLK or Broker is required to prepare or file any
reports or records by any entity that regulates it, SLK and Broker shall, to
the extent permissible by law, cooperate with each other in providing any
information needed in order to prepare such reports or records.

 

11

 

7.                                      Broker
Indemnification

 

Broker hereby agrees to
indemnify, defend and hold harmless SLK from and against all claims, demands,
proceedings, suits and actions made or brought against SLK, and to indemnify
SLK’s liabilities, losses, damages, expenses, attorneys’ fees and costs arising
out of one or more of the following (except for those claims arising out of
SLK’s gross negligence, malfeasance or willful misconduct):

 

(a)                                  Failure
of Broker to provide prompt notification of restrictions, suspensions, net
capital deficiencies and other matters as required by Paragraph 6(a) above;

 

(b)                                 Failure
of Broker or the Broker’s customer to make payment when due for securities purchased,
or to deliver when due, securities sold for the account of Broker or Broker’s
customers;

 

(c)                                  Failure
of a customer of Broker to meet any initial margin call or any maintenance
call, except that SLK shall be responsible only for the portion of any such
losses that are directly attributable to SLK’s failure to give proper and
timely notification to the customer of any call;

 

(d)                                 Failure
of Broker to properly perform its duties, obligations and responsibilities with
respect to customer accounts (as set forth in Paragraph 6, above), it being
understood that the participation of any employee of SLK in any transactions
referred to in Paragraph 6 shall not affect Broker’s indemnification
obligations hereunder, unless such participation by SLK’s employee was
fraudulent;

 

(e)                                  Any
dishonest, fraudulent, negligent or criminal act or omission on the part of
Broker or any of Brokers’ officers, partners, employees, agents or customers;

 

(f)                                    Except
as otherwise provided herein, all claims or disputes between Broker and its
customers with respect to the matters set forth in this Agreement, it being
understood: (i) that Broker guarantees the validity of customer orders in the
form such orders are transmitted to SLK by Broker, and guarantees to SLK that
each customer will promptly and fully perform his commitments and obligations
with respect to all transactions in all of the accounts carried by SLK
hereunder, and (ii) that checks received by SLK from Broker’s customers shall
not constitute payment until they have been paid and the proceeds actually
received and credited to SLK by its bank;

 

(g)                                 Any
adverse claims with respect to any customer securities delivered or cleared by
SLK, it being understood that SLK 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 9-306(3) of the Uniform Commercial Code;

 

(h)                                 The
default by any over-the-counter broker with which Broker deals on a principal
basis, giving up SLK for clearance;

 

(i)                                     The
default by any third-party broker with whom Broker deals rather than using SLK
to execute a transaction for itself or a customer;

 

(j)                                     The
breach by the Broker of any warranty, representation, duty or obligation under
this Agreement;

 

(k)                                  SLK’s
guarantee of any signatures with respect to transactions in the accounts of
Broker’s customers;

 

12

 

(l)                                     The
failure of Broker’s customers to fulfill their obligations to the Broker or to
SLK (whether or not such failure is in the Broker’s control); and

 

(m)                               Any
inquiry or investigation, by federal or state law enforcement agencies, the
SEC, NASD, NYSE or any other regulatory body into the activities of Broker or
of its officers, partners, employees, agents or customers except for inquiries
or investigations resulting in an admission or a finding of gross negligence,
malfeasance or willful misconduct by SLK.

 

8.                                      Minimum
Equity Requirement

 

To further assure
Broker’s performance of its obligations under this Agreement, including but not
limited to its indemnification obligations under Paragraph 7, Broker shall, on
or before the execution of this Agreement, establish an account(s) at SLK which
shall at all times contain cash, securities, or a combination of both, having a
market value of $*** or such other
amount as SLK may require at a future date  (the “Account”).  The Account may be used by Broker
to trade securities on a proprietary basis.

 

All cash and/or securities in the
Account shall be returned upon the later of 30 days after cancellation of this
Agreement or the last account is transferred from SLK. This deposit does not
represent an ownership interest.

 

If SLK shall suffer any
loss or incur any expense for which it is entitled to be indemnified pursuant
to this Agreement, and Broker shall fail to make such indemnification within
five (5) business days after being requested to do so, SLK shall deduct the
amount of such claim, loss or expense from the commissions then credited to
Broker pursuant to Paragraph 9.  If the
amount of said commissions is less than the amount of such claim, loss or
expense, SLK shall have the right to withdraw from the Account cash or
securities (or both) having a market value equal to the amount of such
deficiency.  Broker shall then be
obligated to immediately deposit in the Account cash or securities sufficient
to bring the Account back to a market level of at least $***.

 

Upon the termination of
this Agreement, or as soon as practical thereafter, SLK will pay and deliver to
Broker the funds and securities in the Account, less any amounts which it is
entitled to withdraw under the preceding Paragraph; provided, however, that SLK
may retain in the Account an amount to protect it from any claim or proceeding
of any type, then pending or actually threatened, until the final determination
thereof is made.  If within a reasonable
time after the termination of this Agreement, a threatened claim or proceeding
is not resolved, or a legal action or proceeding is not instituted, the amount
retained with respect to such threatened claim or proceeding shall be paid or
delivered to Broker.

 

9.                                      Commission
Payments

 

(a)                                  SLK
shall charge each of Broker’s customers the commission that Broker directs it
to charge for each transaction.  If
specific instructions are not received with respect to a specific transaction
in the time period required by SLK to implement same, SLK shall charge the
customer the commission prescribed in the basic commission schedule delivered
to SLK by Broker.  Such basic schedule
may be amended from time to time by Broker by written instructions delivered to
SLK; provided, however, that such changes shall be implemented only to the
extent they are within the usual capabilities of SLK’s data processing and
operations systems and only within such reasonable time limitations as SLK may
deem necessary to avoid disruption of its normal operating capabilities.  For purposes of confirmation preparation,
Broker will also furnish from time to time the source and amount of any
commission or other payment received by Broker in connection with transactions
in the customers’ accounts.

 

***         Certain information on this page has
been omitted and filed separated with the Commission. Confidential treatment
has been requested with respect to the omitted portions.

 

13

 

(b)                                 Commissions
charged Broker’s customers shall be collected by SLK and credited to Broker,
after deducting SLK’s compensation referred to in Paragraph 10 (and any other
amount owed to SLK pursuant to this Agreement).  Such commissions shall be credited to the Account on a monthly
basis, on the fifth business day after the final settlement date of the month.

 

10.                               Compensation

 

As compensation for
services provided hereunder by SLK, there shall be deducted from the
commissions charged Broker’s customers the amounts set forth in the fully
disclosed pricing schedule attached hereto. 
Said compensation schedule may be amended upon the written agreement of
both parties or as otherwise agreed by both of the parties.

 

11.                               Margin
Accounts

 

(a)                                  Any
transaction for a customer will be considered a cash transaction until such
time as Broker has furnished SLK with an executed customer’s margin agreement
and consent to loan of securities in a form acceptable to SLK.

 

(b)                                 All
margin accounts introduced by Broker shall be subject to SLK’s “house margin
requirements.”  SLK currently imposes a
40% maintenance requirement.  In its sole
discretion, and subject to market conditions and periods of extreme volatility,
SLK may change the house margin requirements applicable to any customer account
or class of customer accounts on appropriate notice to Broker, unless market
conditions prevent advance notice.  Broker
shall be responsible for advising its customer(s) of the changed requirements
and for collecting any additional margin necessary to insure compliance with
increased requirements.

 

(c)                                  In
all margin accounts, Broker shall be responsible for the initial margin
requirement for any transaction until such initial margin has been received by
SLK in acceptable form.  SLK reserves
the right to refuse to accept any transaction in a margin account after the
initial transaction, without actual receipt of the necessary margin, and to
impose a higher margin requirement, when, in SLK’s opinion, the past history or
nature of such account or the securities therein justifies such action.

 

(d)                                 SLK
shall notify Broker in advance of all margin calls, and shall provide Broker
with copies of such calls.  In the event
that satisfactory margin is not provided within the time specified by SLK, SLK
shall be at liberty to take such actions as SLK may, in its reasonable
judgment, deem appropriate.  After such
initial margin has been received, subsequent margin calls may be made by
SLK.  Broker agrees to cooperate with
SLK in complying with and obtaining margin on subsequent calls.

 

(e)                                  Interest
charged with respect to debit balances in customers’ accounts shall be
determined in accordance with the fully disclosed pricing schedule attached
hereto.

 

(f)                                    Broker
shall be responsible for any failure on the part of a customer to meet a
“maintenance call”, except to the extent directly attributable to SLK’s failure
to give proper and timely notification to Broker.  An officer of Broker who has been designated by Broker (and
acknowledged in writing by SLK) may request, to the extent permitted by the
margin rules, that SLK withhold temporarily any contemplated action, or
“Sell-out” or “Buy-in”, for accounts which have failed to meet a margin call.  Such requests shall be made in writing and
shall clearly set forth the period of time during which the contemplated action
is requested to be withheld.  Should SLK
comply in whole or in part with such request, Broker guarantees to reimburse
SLK immediately for the maximum amount of loss or liability which SLK may
sustain or incur by reason of any compliance with such request, by depositing
sufficient 

 

14

 

funds with SLK in a reserve or other appropriate
account at a bank of SLK’s choosing over which SLK shall be signatory, to
reimburse SLK for the loss or unsecured indebtedness held in the account of the
particular customer; provided, however, that compliance with such a request
shall not be deemed a waiver by SLK of any of its rights hereunder, including
but not limited to, the right to close out a contract or position if, in SLK’s
judgment, changing conditions render such action advisable.

 

(g)                                 Broker
shall be responsible for sending each margin customer a written statement at
the time of the opening of a margin account in compliance with Rule 10b-16 of
the Securities Exchange Act of 1934.

 

(h)                                 Broker
shall obtain a margin agreement from each margin account introduced to SLK,
including a hypothecation authority, in a form and substance acceptable to SLK.

 

12.                               Unsecured
Debits or Unsecured Short Positions

 

Unsecured debits or short
positions (on a “marked to market” basis) in a customer’s account that are not
resolved by payment or delivery within thirty (30) calendar days shall be
charged to the account of the Broker maintained by SLK, and to which SLK
credits the Broker with commissions due. 
Such unpaid debits or short positions shall be netted against
commissions due on a monthly basis.  Any
excess of such unpaid debits or short positions over commissions due shall be
applied against Broker’s Account and shall be considered a claim against Broker
pursuant to Paragraph 7 of this Agreement.

 

13.                               Responsibilities
and Rights of SLK

 

SLK will maintain
prescribed books and records of all transactions executed or cleared through
it.  SLK also undertakes to perform in
good faith the services agreed to be performed in this Agreement, including the
foregoing, but,  except to the extent
that a transaction or customer raises concerns related to money laundering,
shall not be bound to make any investigation into the facts surrounding any
transaction that it may have with Broker or that Broker may have with its
customers or other persons, nor shall SLK be under any responsibility of compliance
by Broker with any laws or regulations which may be applicable to Broker.

 

Nothing herein shall be
deemed to restrict in any way the right of SLK, or any affiliate of SLK, to
compete with Broker in any or all aspects of Broker’s business.

 

14.                               Damage
Claims by Non-Parties to This Agreement

 

SLK shall have no
liability to any of Broker’s customers and any other non-party for any loss
suffered by any such customer or non-party, except for losses suffered as a
result of SLK’s or any of its officer’s, partner’s, agent’s, independent
contractor’s, or employee’s grossly negligent, dishonest, fraudulent or
criminal act or omission resulting in a breach of Paragraph 18 hereof.

 

Broker hereby waives any
claim against SLK for losses suffered by Broker’s customers, any other
non-party, or by Broker, on account of its customers’ or another non-party’s
claims, except to the extent that such losses or claims result from the grossly
negligent, dishonest, fraudulent or criminal act or omission of SLK or any of
its officers, partners, agents, independent contractors or employees with
respect to the services provided by SLK under this Agreement, including
Paragraph 18 hereof.

 

15.                               Indemnification by SLK

 

SLK hereby agrees to
indemnify, defend and hold harmless Broker from and against all claims,
demands, proceedings, suits and actions, and all liabilities, expenses,
reasonable attorney fees, and costs in connection therewith, arising out of any
dishonest, fraudulent, grossly negligent or criminal 

 

15

 

act or omission on the
part of SLK, any of its officers, partners, agents, independent contractors or
employees with respect to the services provided by SLK under this Agreement,
including Paragraph 18 hereof.

 

16.                               Employees

 

Without the prior written
consent of the other, neither party will during the period of this Agreement
and for one (1) year thereafter, hire or attempt to hire any person who is
employed by the other on the termination of this Agreement, or whose employment
with the other terminated within the one year period prior to the termination
of this Agreement.

 

17.                               Construction
of Agreement

 

Neither this agreement
nor the performance of the services hereunder shall be considered to create a
joint venture or partnership between SLK and Broker, or between Broker and
other brokers for whom SLK may perform the same or similar services. Neither
SLK nor Broker will utilize the name of the other in any way without the
other’s consent, and under no circumstances shall either party employ the
other’s name in such a manner as to create the impression that the relationship
created or intended between them is anything other than that of clearing broker
and correspondent broker.

 

During the term of this
Agreement, Broker will not enter into any other similar agreement or obtain the
services contemplated by this Agreement from any other party, unless (i) SLK is
not capable of performing such services in a commercially reasonable manner as
a result of regulatory restrictions, including those relating to any
international regulatory bodies or agencies or (ii) a customer of Broker
specifically requests such services be performed by an entity other than SLK.

 

18.                               Confidentiality

 

Broker represents and SLK
acknowledges that Broker considers that Customer Information (as defined
below), in whatever medium or format received, transmitted or stored, that SLK
may receive or come to possess in connection with the performance of its
obligations under this Agreement is strictly confidential and constitutes
proprietary information and trade secrets of Broker.

 

With respect to the
Customer Information, SLK hereby agrees, during the term hereof and thereafter:

 

(a)                                  to
disclose the Customer Information only to Relevant Persons who have (i) a “need
to know” the Customer Information to permit SLK to fulfill its clearing and
clearing-related obligations under this Agreement, (ii) been informed by SLK of
the confidential, proprietary nature of the Customer Information and (iii) been
trained by SLK as to appropriate safeguarding of confidential information; and

 

(b)                                 to
safeguard, handle and treat the Customer Information with the same level of
care and diligence that it utilizes with respect to its own confidential,
proprietary and trade secret information or documents of a nature similar to
the Customer Information, and to use the Customer Information for the sole
purpose of performing its obligations under this Agreement.

 

With respect to the
Customer Identification Information (as defined below), SLK hereby agrees,
during the term hereof and thereafter, ***.

 

***         Certain information on this page has
been omitted and filed separated with the Commission. Confidential treatment
has been requested with respect to the omitted portions.

 

16

 

With respect to the
Customer Trading Information (as defined below), SLK hereby agrees, during the
term hereof and thereafter, ***.

 

SLK also acknowledges
that Broker has represented that the Customer Information constitutes valuable,
unique, confidential and proprietary information and that any breach of this
paragraph by SLK, its personnel or it affiliates that results in unauthorized
use, exploitation or disclosure thereof could be extremely harmful to Broker
and to its customers, and that money damages alone may not be a sufficient
remedy for such breach.  Therefore, in
addition to all other remedies available to Broker hereunder, Broker shall be
entitled to seek specific performance and injunctive or other equitable relief
as a remedy for any such breach.

 

Notwithstanding the
foregoing (I) Customer Identification Information, Customer Trading Information
and Customer Information shall not include (x) any information which is in or
enters the public domain or becomes known to SLK or any Relevant Person (other
than as a result of a breach of this Paragraph 18 by SLK or any Relevant
Person) and (y) any information which was, or was entitled to be, in the
possession of SLK or any Relevant Person without any obligation of confidentiality
prior to its disclosure by SLK or any Relevant Person, including without
limitation any information received by SLK when acting outside of the scope of
this Agreement, and (II) SLK or any Relevant Person shall be permitted to
disclose Customer Information as may be compelled or required (A) by any
regulatory organization or SRO described in Paragraph 2 hereof or any similar
or successor regulatory organization or SRO or (B) pursuant to a valid subpoena
or judicial order issued by a court of competent jurisdiction or pursuant to an
order issued by a regulatory organization or body with jurisdiction over SLK
and its activities; provided that in the case of a disclosure in accordance
with clause (B), SLK shall provide prior notice thereof to Broker (unless such
prior notice is not permitted by the relevant regulatory organization, SRO,
subpoena or order) and cooperate, at Broker’s expense, in Broker’s attempt to
prevent such disclosure or limit the scope thereof.

 

“Customer Information”
shall mean the Customer Identification Information, together with the Customer
Trading Information.

 

“Customer Identification
Information” shall mean information relating to the identification of Broker’s
customers, including or their accounts, without limitation, such customers’ or
their accounts, identities, addresses, e-mail addresses, telephone numbers,
facsimile numbers, account settlement instruction details and other related
information.

 

“Customer Trading
Information” shall mean information relating to the trading history and records
of Broker’s customers, including, without limitation, such customers’ orders
(whether executed or otherwise), cancellations, executions or patterns
resulting from trading or investment strategies, positions or holdings in
financial instruments or products of any type or nature, pending or executed
orders or transactions in such financial instruments or products, account
information and information relative to their employees or associated persons,
and any information based thereon or derived therefrom.

 

***         Certain information on this page has
been omitted and filed separated with the Commission. Confidential treatment
has been requested with respect to the omitted portions.

 

17

 

“Relevant Person” shall
mean any affiliate, director, officer, employee, agent or other representative,
of SLK or any general partner, limiter partner, affiliate, successor or
permitted assignee thereof.

 

19.                               Termination

 

This Agreement shall
continue until terminated as hereinafter provided:

 

(a)                                  The
parties agree that for a period of twelve (12) months following the execution
of this Agreement there shall be no change in the compensation schedule
referred to in Paragraph 10 herein. 
Thereafter, upon any unilateral change by SLK of more than 10% per annum
in the compensation schedule referred to in Paragraph 10 of this Agreement, or
upon the unreasonable rejection by SLK of any customers or trades pursuant to
Paragraph 4, Broker may, upon fifteen (15) days prior written notice to
SLK, terminate this Agreement as of the effective date of such unilateral
change.

 

(b)                                 This
Agreement may be terminated by either party, without cause, upon ninety (90)
days’ written notice delivered in person or by registered or certified mail.

 

If either party
terminates the Agreement pursuant to this subparagraph, SLK shall have the
right to impose reasonable limitations upon Broker’s activities with respect to
its and its customers’ account(s) at SLK during the period between the giving
of notice and the transfer of Broker’s account.

 

(c)                                  In
the event either party defaults in the performance of its obligations under
this Agreement, the non-defaulting party may terminate this Agreement on the
following terms and conditions. Written notice must be delivered to the
defaulting party specifying the nature of the default and notifying the
defaulting party that unless the default is cured within a period of ten (10)
days from receipt of the notice, this Agreement may be terminated without further
proceedings by the non-defaulting party.

 

(d)                                  This Agreement may be terminated by SLK
or Broker immediately in the event that the other party is criminally indicted,
enjoined, disabled, suspended, prohibited or otherwise unable to engage in the
securities business, or any part of it, as a result of any administrative or
judicial proceeding or action by the U.S. Department of Justice or state
prosecutor, the SEC, NYSE, NASD, any state securities regulator or any other
self-regulatory organization having jurisdiction, or pursuant to a voluntary
agreement or understanding with any of the aforementioned entities.

 

(e)                                  This
Agreement may be terminated by SLK or Broker immediately in the event that the
other party incurs a net capital deficiency, becomes a debtor in a bankruptcy
proceeding, is placed into receivership or becomes insolvent.

 

(f)                                    SLK
may terminate this Agreement forthwith upon prior written notice to the Broker
in the event that:

 

(i)                                     SLK discovers that Broker has failed to
comply with any of the notification requirements of Paragraph 6(a).

 

(ii)                                  The Broker is adjudicated bankrupt or
insolvent or a trustee or similar creditors’ representative is appointed by
court order, or any property of the Broker is sequestered by court order and
such order `remains in effect for more than thirty (30) calendar days, or a
petition is filed by or against the Broker either voluntarily or 

 

18

 

involuntarily under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction, whether now or hereafter in effect, and is not
dismissed within thirty (30) calendar days of such filing, or the Broker makes
an assignment for the benefit of its creditors, or admits in writing its
inability to pay its debts generally as they become due, or consents to the
appointment of a receiver, trustee or liquidator for itself or for any property
held by it; or

 

(iii)                               SLK may take appropriate steps, including but
not limited to the immediate termination of this Agreement and/or the
liquidation of an Account or any portion thereof, upon the failure of the Broker to close the account of a prohibited shell
bank; upon notification that the Broker has failed to terminate a correspondent
relationship with a foreign bank where the foreign bank has failed to comply
with a summons or subpoena, or has failed to initiate proceedings in a United
States court contesting same or has failed to provide a foreign bank
certification.

 

(g)                                 Termination
of this Agreement, however caused, shall not release Broker or SLK from any
liability or responsibility to the other with respect to transactions effected
prior to the effective date of such termination, whether or not claims relating
to such transactions shall have been made before or after such termination.

 

(h)                                 If
Broker terminates this Agreement pursuant to subparagraph (b) above within the
first year of the date of this Agreement, or SLK terminates this Agreement
pursuant to subparagraph (c) or (d) above, Broker will pay to SLK a termination
fee equal to the reasonable expenses incurred by SLK (i) in establishing
systems procedures and capacity for servicing Broker and its customers, and
(ii) in discontinuing the clearing arrangement. However, in no event shall said
termination fee be less than $5,000 or more than $10,000.  Said fee shall be paid within 10 days after
receipt of SLK’s statement setting forth, in reasonable detail, the expenses
incurred by SLK.

 

20.                               Transfer
of Customer Accounts upon Termination

 

In the event that this
Agreement is terminated for any reason, it shall be Broker’s responsibility to
arrange for the transfer of Broker and Customer Accounts to another clearing
broker.  Broker will give SLK notice
(“Transfer Notice”) of (i) the name of the broker which will assume
responsibility for clearing services for Broker and Customers; (ii) the date on
which such broker will commence providing such services; (iii) Broker’s
undertaking, in form and substance satisfactory to SLK, that Broker’s agreement
with such broker provides that such broker will accept on transfer all Broker
and Customer Accounts then maintained by SLK; and (iv) the name of an
individual within that organization whom SLK can contact to coordinate the
transfer.

 

The Transfer Notice shall
be given by Broker at the same time as the 15-day, 90-day and 10-day
termination notices provided for in Paragraph 19(a), (b) and (c) above.

 

If Broker fails to give
SLK a timely Transfer Notice, or SLK terminates this Agreement immediately,
pursuant to Paragraph 19(d), (e) or (f) above, SLK may give Customers such
notice as SLK deems appropriate of the termination of this Agreement and may
make such arrangements as SLK deems appropriate for the transfer or delivery of
Customer and Broker Accounts; provided, however, that in the event that such
termination is based exclusively on Paragraph 19(f)(i), SLK’s right to give
such notice or make such arrangements is limited to situations where the facts
and circumstances giving rise to the notification obligation under Paragraph
6(a) have a reasonable potential to cause an adverse material impact on
Broker’s business.  Broker shall pay any
costs thereby incurred by SLK as billed by third party vendors such as transfer
agents, etc.

 

19

 

If
an Account is closed by Broker as a result of the shell bank provisions or as a
result of money laundering concerns, Broker must notify SLK within 48 hours of
the facts relating to those concerns.

 

21.                               Action
Against Customers; Customer Complaints

 

SLK shall have the right
at all times, in its sole discretion, and at its sole expense, to institute and
prosecute in its name, upon prior written notice to Broker, any action or
proceeding against any of Broker’s customers as to any controversy or claim
arising out of SLK’s transactions with Broker or with Broker’s customers, and
nothing contained in this Agreement shall be deemed or construed to impair or
prejudice such right in any way whatsoever, 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 shall assign its rights against its
customers to SLK, to the extent requested by SLK and necessary to carry out the
intent of this Paragraph.

 

In addition to SLK’s
obligations regarding customer complaints pursuant to NYSE Rule 382(d), set
forth in Paragraph 4(h) of this Agreement, SLK and Broker shall each
communicate to the other any complaint/inquiry regarding the other.

 

22.                               Notices

 

Any notice or request
that is required or permitted to be given under this Agreement shall be
sufficient if in writing, and sent by hand or certified mail, in either case,
return receipt requested, to the respective parties at the following addresses:

 

Broker:

 

Wave Securities LLC

100 South Wacker Drive

Suite 2012

Chicago, IL 60606-5173

Attn:  Joseph Lombard, President

 

SLK:

 

Spear, Leeds &
Kellogg, L.P.

c/o Goldman Sachs &
Co

1 New York Plaza

New York, New York 10004

Attn:  General Counsel

 

23.                               Amendments

 

This Agreement represents
the entire Agreement between the parties with respect to the subject matter
contained herein. This Agreement may not be changed orally, but only in a
writing signed by both parties.

 

24.                               Exchange
Regulation

 

The parties acknowledge
that they will be subject to the rules of the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc., and any other securities exchanges or
associations of which either party is or may become a member, and of any
governmental agencies to whose jurisdiction either party may be subject.

 

20

 

25.                               Waiver

 

The failure of either party to
insist upon strict adherence to any term of this Agreement on any occasion
shall not be considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of this
Agreement.

 

26.                               Assignment

 

Broker may not assign or
delegate any of its rights or obligations hereunder without the prior written
consent of SLK.  This Agreement shall be
binding upon, and shall inure to the benefit of, the respective successors and
assigns of Broker (subject to SLK’s consent) and SLK.

 

27.                               Applicable
Law

 

This Agreement shall be
governed by and construed in accordance with the laws of the State of New York.

 

28.                               ARBITRATION
DISCLOSURE

 

•                                          ARBITRATION
IS FINAL AND BINDING ON THE PARTIES.

 

•                                          THE
PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT, INCLUDING THE RIGHT
TO JURY TRAIL.

 

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

 

•                                          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.

 

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

 

29.                               ARBITRATION
AGREEMENT

 

ANY CONTROVERSY BETWEEN
SLK AND BROKER ARISING OUT OF THE BUSINESS OF THIS AGREEMENT SHALL BE SUBMITTED
TO ARBITRATION CONDUCTED BEFORE THE NEW YORK STOCK EXCHANGE, INC., OR THE
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC., AS SLK MAY ELECT, AND IN
ACCORDANCE WITH THE RULES OF THE SELECTED ORGANIZATION. 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.

 

30.                               This Agreement shall be
submitted to and/or approved by any national securities exchange, or other
regulatory and self-regulatory bodies vested with the authority to review
and/or approve this Agreement or any amendment or modifications hereto. In the
event of any disapproval, the parties hereto agree to bargain in good faith to
achieve the requisite approval.

 

31.                               If any provision or
condition of this Agreement shall be held to be invalid or unenforceable by any
court, or regulatory or self-regulatory agency or body, such invalidity or
unenforceability shall attach only to such provision or condition.  The validity of the remaining provisions and
conditions shall not be affected thereby, and this Agreement shall be carried
out as if any such invalid or unenforceable provision or conditions were not
contained herein.

 

21

 

32.                               For purposes of the
Securities and Exchange Commission’s financial responsibility rules and the
Securities Investor’s Protection Act, Broker’s customers will be considered
customers of SLK and not customers of Broker. 
Nothing herein shall cause Broker’s customers to be construed or
interpreted as customers of SLK for any other purpose, or to negate the intent
of any other Paragraph of this agreement, including, but not limited to, the
delineation of responsibilities as set forth elsewhere in this Agreement.

 

33.                               PRIME
BROKERAGE:

 

(a)                                  Establishment
of an Account

 

SLK agrees to establish
on its books and records an account in the name of a prime broker for Broker’s
clients and to maintain same providing SLK receives from said client SIA Form
151 “Executing Broker Customer Agreement” and all other documents SLK may deem
appropriate.

 

Broker shall provide SLK
with the Prime Broker tax ID number and the full street address of its client,
the “SIA Form 151” as well as the necessary settlement instructions.

 

(b)                                  Customer
Qualifications

 

By introducing Prime
Broker Accounts to SLK, Broker confirms that it is aware that its client
maintains a minimum net equity of $1,000,000 in cash or securities with a ready
market for trades executed on behalf of an account not managed by an advisor,
or $100,000 in cash or securities with a ready market for trades executed on
behalf of a customer account managed by an investment advisor registered under
Section 203 of the Investment Advisors Act of 1940.  Broker understands that if for any reason the account falls below
such minimum net equity SLK has the right to refuse to process trades as a
prime broker transaction.  Each time
Broker enters an order Broker represents that its client is in compliance with
such minimum net equity, or will notify SLK otherwise.

 

In the event that any
prime broker disaffirms any trade Broker has executed, Broker hereby agrees to
be responsible and liable to SLK for settling such transaction.

 

(c)                                  Restrictions
on Account

 

Broker understands that
SLK in its sole discretion may refuse to accept Prime Broker Transactions on
Broker’s client’s behalf or restrict or prohibit trading of securities in
Broker’s client’s account or refuse to clear Broker’s client’s transactions, in
each case, after endeavoring to provide prompt notice to Broker.

 

(d)                                  Confirmations

 

Unless otherwise
instructed in writing, SLK shall confirm transactions to Broker’s client, as
well as to the prime broker, by the morning of the next business day after the
trade date.

 

Broker agrees to notify
SLK in a timely manner of the contract amount of the transaction, the security
involved, the number of shares or units, whether the transaction is a purchase
or sale, and if a sale, whether the transaction was a short or long sale.  Broker is responsible for complying with all
applicable rules and regulations of the SEC and applicable self-regulatory
organizations governing the execution of short sales.

 

22

 

34.                               PROPRIETARY
ACCOUNTS OF INTRODUCING BROKERS [“PAIB”]:

 

The parties agree to the
following conditions and provisions as set forth in the SEC No-Action Letter,
dated November 3, 1998, relating to the net capital treatment of assets in the
proprietary account of an introducing broker (“PAIB”) and to permit Broker to
use PAIB assets in its Net Capital Computations.

 

1.                                       SLK
shall perform a computation for PAIB assets (“PAIB Reserve Computation”) of
Broker in accordance with the customer reserve computation set forth in 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 may not be included as a credit in the PAIB reserve
computation;

 

B.                                     Note
E(3) to Rule 15c3-3a which reduces debit balances by 1% under the basic method
and subparagraph (a)(1)(ii)(A) of the net capital rule which reduces debit
balances by 3% under the alternative method shall not apply; and

 

C.                                     Neither
Note E(1) to Rule 15c3-3a nor NYSE Interpretation /04 to item 10 of Rule
15c3-3a regarding securities concentration charges shall be applicable to the
PAIB reserve computation.

 

2.                                       The
PAIB reserve computation shall include all proprietary accounts of Broker. All
PAIB assets shall be kept separate and distinct from customer assets under the
customer reserve formula in Rule 15c3-3.

 

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

 

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

 

5.                                       If
the PAIB reserve computation results in a deposit requirement, the requirement
may 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 shall not be satisfied with excess debits from the
PAIB reserve computation.

 

6.                                       Within
two business days of entering into this PAIB Agreement, Broker shall notify its
designated examining authority in writing (with a copy sent to SLK upon
request) that it has entered into this PAIB Agreement.

 

7.                                       Commissions
receivable and other receivables of Broker from SLK  (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 Broker and as payables on the books of SLK.

 

8.                                       If
Broker is a guaranteed subsidiary of SLK or if Broker guarantees SLK (i.e.,
guarantees all liabilities and obligations) then the proprietary accounts of
Broker shall be excluded from the PAIB Reserve Computation.

 

23

 

9.                                       Upon
discovery that any deposit made to the PAIB Reserve Account did not satisfy its
deposit requirement, SLK shall by facsimile or telegram immediately notify its
designated examining authority and the Securities and Exchange Commission
(“Commission”). Unless a corrective plan is found acceptable by the Commission
and the designated examining authority, SLK shall provide written notification
within 5 business days of the date of discovery to Introducing Brokers that
PAIB assets held by SLK shall not be deemed allowable assets for net capital
purposes.  The notification shall also
state that if 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
the notification was made to transfer all PAIB assets to another clearing
broker.  However, if the deposit
deficiency is remedied before the time at which Broker must transfer its PAIB
assets to another clearing broker, Broker may choose to keep its assets at SLK.

 

10.                                 The
parties shall adhere to the terms of the No-Action letter, including the
Interpretations set forth, in all respects.

 

24

 

This Agreement contains a pre-dispute
arbitration clause in Paragraph 28. 
Broker acknowledges that it has received, and read, a copy of this
Agreement, and agrees to be bound by the terms and conditions contained herein.

 

	
  SPEAR, LEEDS & KELLOGG, L.P.

  
	
   

  
	
  By:

  	
    /s/Gary Sveva

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
    Gary Sveva

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
    Managing Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/Joseph Lombard

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
      Joseph Lombard

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  President, Wave
  Securities

  	
   

  

 

25

 

	
   

  	
  Effective Date

  
	
   

  	
  03/08/2004

  

 

Pricing Schedule for Wave Securities
– Private & Confidential v 3

This proposal reflects rates for your institutional agency execution
business.  As you add additional
services, we will provide pricing for you based on your requirements.

 

1.             Listed
& OTC Securities:

	
  Clearance

  	
  $*** per ticket (A tickets is defined by account, by
  side, by symbol and by trade date)

  
	
  Street Side print

  	
  $*** per street side print

  

2.             Listed
Executions

	
  Tier 1 (orders executed < 5 minutes)

  	
  $*** per share

  
	
  Tier 2 (orders executed > 5 minutes)

  	
  $*** per share

  

 

The above brokerage rates
include specialist bills but are exclusive of any additional fees imposed by
specialists or the exchange, i.e. 
Cancellation fees, odd-lot fees, or any other related fees.

 

3.             Clearing Deposit

SKL requires a minimum deposit of $*** which can be in
the form of Cash, Treasury Bill(s) or Fully Paid for Securities in order to pen
and maintain a broker/dealer account. 
(Securities used for deposit require pre-approval from SLK Clearance
Risk Management).

 

4.             Financing:  (+/- basis point off of the Federal Funds
Open Rate)

	
  Debt

  	
   

  	
  FFO Rate *** basis points

  
	
  Short Rebate

  	
   

  	
  FFO Rate *** basis points on non-difficult
  securities

  
	
  Credit Rate

  	
   

  	
  FFO Rate *** basis points

  

 

The Federal Funds Open
rate is currently 1.00%.  Rate can
fluctuate daily and is subject to change without notice.  Spear Leeds & Kellogg will pass back any
interest related fees with the connection of DK’s/overnight financing at a rate
of Federal Open Rate plus *** basis points.

 

5.             Other Items:

	
  Wave Securities will be responsible for (only if
  applicable):

  

 

	
  •      Market Data (Exchange,
  News & Charts)

  	
  •      Exchange & Regulatory
  Surcharges (i.e., NASD, SEC Amex)

  
	
  •      Direct Connectivity (T-1,
  DSL, Radianz etc)

  	
  •      $*** per month per REDI
  user ID internet charge

  
	
  •      Equipment/upgrades
  purchased by SLK on behalf of Wave Securities

  	
  •      $*** per outbound wire

  
	
   

  	
   

  

 

 

All rates quoted above do not include exchange fees,
regulatory fees and surcharges, such as the SEC fees,

NASDR fee, ACT Risk Management fee, etc.

 

***Certain information on
this page has been omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.

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