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CUSTOMER REFERRAL AGREEMENT
This Agreement is made and entered as of October 31, 1997, by and among
Enterbank Holdings, Inc. ("Holdings"), a bank holding company organized under
the laws of the State of Delaware, Enterprise Bank ("Bank"), a banking
subsidiary of Holdings organized under the laws of the State of Missouri, and
Moneta Group Investment Advisers, Inc. ("Moneta"), a corporation organized
under the laws of Missouri.
WITNESSETH THAT
Moneta is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended, and provides financial planning and
investment advisory services to individuals, fiduciaries and business
organizations;
In the regular course of its business, Moneta provides advice with
respect to, or exercises discretionary authority from its clients to
effect, short-term investments in money market funds and similar
deposit accounts;
Clients of Moneta, either independently or as the result of financial
planning and investment advice provided by Moneta, borrow funds or
engage in other financing transactions for personal, business or
investment purposes;
Bank is regularly engaged in accepting deposit accounts and in making
loans or otherwise extending credit and providing commercial banking
services;
Prior to the date of this Agreement, Moneta in the regular course of
its business recommended to certain of its clients the banking services
offered by and available through the Bank and Moneta believes that it
may be appropriate for certain of its other current and prospective
clients to utilize the various banking services offered by and
available through Bank, either for such clients or for related persons
and entities. Subject to the discharge of its fiduciary obligations to
its clients and to the extent consistent therewith, Moneta believes
that it is appropriate to make referrals of such clients, related
persons and entities to Bank.
Holdings and Bank believe that referrals of Moneta's clients to the
Bank will contribute to the growth of the Bank's deposit and lending
activity and desires to enter into this Agreement with Moneta to
promote and encourage such referrals.
Bank believes that certain of its existing customer base may have an
interest in engaging the services of an investment adviser with respect
to financial planning and portfolio management services offered by
Moneta and intends to refer such customers to Moneta in accordance with
the terms of a separate agreement of even date herewith.
In consideration of the premises and the covenants herein contained,
Holdings, the Bank and Moneta agree as follows:
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1. Referrals of clients and customers of Moneta to Bank for Deposit
Accounts. Subject to and to the extent consistent with its fiduciary
obligations to its clients and customers, Moneta agrees that it will recommend
that its clients and customers establish deposit accounts at the Bank to be
used as the principal depository of the cash portion of funds of Moneta
customers under investment advisory management by Moneta including, without
limitation, funds deposited pending investment, funds representing proceeds of
securities or other investments sold on behalf of such clients and customers
and income derived from such investments prior to disbursement thereof to the
client or customer. In connection with such deposit accounts each client or
customer of Moneta will provide such account documentation as is required by
Bank and in addition thereto will provide to Bank an executed original limited
power of attorney in favor of Moneta authorizing Moneta, inter alia, to
withdraw funds from such account for the purpose of settlements in respect of
purchases of securities on behalf of the client or customer and for the
purpose of disbursing funds to the client or customer. Such limited powers of
attorney will expressly authorize the Bank to rely upon instructions received
from Moneta with respect to disbursements made from such accounts and Moneta
agrees to indemnify and hold Bank harmless from and against any loss, claim,
damage or expense suffered by Bank as a result of Bank's reliance upon
instructions or directions received from Moneta with respect to any such
account. Unless otherwise requested by the customer, any such deposit account
relating to the customer's investment account managed by Moneta shall be
maintained separately from any other deposit account of such customer with the
Bank.
2. Referrals of clients and customers of Moneta to Bank for loan, deposit
and other Bank services. Subject to and to the extent consistent with its
fiduciary obligations to its clients and customers, Moneta agrees that it will
refer such customers to Bank for loans, deposits and other credit and
financial services provided by Bank. In connection with each such referral,
Moneta will provide to its customers and clients disclosure of the
relationship between Moneta and the Bank arising under this Agreement or
otherwise, in a manner consistent with applicable legal and regulatory
requirements and good business practice. It is expected that such disclosure
will be substantially in the form of Exhibit I hereto and that subject to
applicable legal and regulatory disclosure requirements changes in the form
and substance of such disclosures will be subject to the reasonable approval
of the Bank prior to the use thereof by Moneta. Moneta and the Bank recognize
and acknowledge that any client or customer referred to Bank by Moneta will
have free discretion to elect the use of any banking services offered by Bank
subject to such terms and fees as may be agreed upon between Bank and the
client or customer so referred.
3. Exclusivity with respect to referrals of Moneta clients and customers to
Bank. Although in the exercise of its fiduciary responsibility to its clients
Moneta may recommend other banking or financial institutions that provide
deposit, loan and other services provided by the Bank, Moneta agrees with Bank
and Holdings that this Agreement shall constitute an exclusive arrangement and
that during the term of this Agreement it will not, and will not permit any
principal or employee of Moneta to, enter into an agreement or receive
compensation from any other banking or financial institution for referrals of
clients to such institution with respect to services which are offered by and
available through the Bank.
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4. Referrals of clients and customers of Bank to Moneta for financial
planning and investment advisory services. Moneta and the Bank agree to enter
a "Moneta Bank Marketing and Solicitation Agreement" in the form of Exhibit II
hereto, such agreement to become effective upon the further execution and
delivery thereof by XX Xxxxxxxx & Co. Inc., a broker-dealer registered under
the Securities Exchange Act of 1934, as amended, and a member of the National
Association of Securities Dealers, Inc.
5. Exclusivity with respect to referrals of Bank clients and customers to
Moneta. Although in the exercise of its fiduciary responsibility to its
clients Bank may recommend other investment advisory or brokerage institutions
to its customers, Bank agrees with Moneta that this Agreement shall constitute
an exclusive arrangement and that during the term of this Agreement it will
not, and will not permit any principal or employee of Bank to, enter into an
agreement or receive compensation from any other investment advisory or
brokerage institution for referrals of clients to such institution with
respect to services which are offered by and available through Moneta.
6. Identification of certain Bank Customer Accounts as "Moneta Referral
Accounts." Accounts of customers and clients of Moneta whom or which Moneta
refers to the Bank shall be identified as "Moneta Referral Accounts" in
accordance with the terms hereof as follows:
(a) Each Moneta client or customer hereafter establishing a
deposit account with Bank in accordance with paragraph 1 of this
Agreement shall, to the extent of such account, be deemed to be a
"Moneta Referral Account."
(b) Moneta will identify to the Bank at the time of
introduction to the Bank such of Moneta's clients and customers
as it shall refer to Bank in accordance with paragraph 2 of this
Agreement for other loan, deposit or banking services. Each
deposit or loan account established with respect to any such
client or customer shall be regarded as a "Moneta Referral
Account"; provided, however, that in the case of any such
customer or client having a banking relationship with the Bank
prior to the date of such introduction or reference by Moneta
shall not be deemed to have established a "Moneta Referral
Account" except to the extent that the Joint Relationship
Committee established under this Agreement determines that one or
more accounts established by such customer after the date of
referral to the Bank by Moneta has resulted in an expanded
relationship with the Bank solely as a result of such reference.
(c) The Joint Relationship Committee will also identify as
"Moneta Referral Accounts" such deposit and loan accounts with
the Bank as may result from "primary relationships" with holders
of accounts designated as "Moneta Referral Accounts" in
accordance with clause (b) above. For purposes of such
designation, a "primary relationship" shall mean that the holder
of the account is either (i) a member of the immediate family of
the holder of a "Moneta Referral Account" designated in
accordance with clause (b) above, (ii) a trust or other fiduciary
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account as to which the holder of a "Moneta Referral Account" is
either the settlor or the fiduciary, or (iii) an account which is
established by or for the benefit of an entity or person which is
controlled by or under common control with the holder of a
"Moneta Referral Account" designated in accordance with clause
(b) above.
(d) In addition to the foregoing, the Joint Relationship
Committee may identify as "Moneta Referral Accounts" any other
accounts which it determines represents deposit or loan accounts
of customers of the Bank who would not have become customers of
the Bank but for a direct or indirect referral to the Bank made
by Moneta. In this connection it is contemplated that the Joint
Relationship Committee will review the names of existing Moneta
clients who are holders of deposit accounts at the Bank to
determine which of such holders established a relationship with
Bank as a result of a prior reference by Moneta and that such
relationships and references will also give rise to
identification of "Moneta Referral Accounts" in the discretion of
the Joint Relationship Committee.
In connection with the designation of accounts at the Bank as "Moneta Referral
Accounts" under clauses (b), (c) and (d) above, there shall be established a
Joint Relationship Committee. Such Committee shall initially consist of Xxxxx
Xxxxxx and one other representative designated by Moneta and of Xxxx Xxxxx and
one other representative designated by the Bank. Either Moneta or the Bank
shall have the right, from time to time, to change its representation on the
Joint Relationship Committee by written notice. The Joint Relationship
Committee shall have access to such customer records and account information
as it shall deem reasonably necessary in order to determine in good faith
whether a particular account should be designated as a "Moneta Referral
Account" and each of Moneta and Bank agree to provide such information upon
request. Each member of the Committee, by serving thereon, agrees to maintain
the confidentiality of information concerning the accounts of customers of the
other party confidential except as may be required under this Agreement.
7. Imputation of Pro Forma Net Interest Margin accruing to Bank as a result
of Moneta Referral Accounts. For each accounting period during the term of
this Agreement as set forth in subsection (d) below, the Bank shall generate a
Pro Forma Income Statement reflecting the income and cost to the Bank in
respect of the Moneta Referral Accounts in accordance with the following items
of income and expense to arrive at a Pro Forma Net Interest Margin with
respect to the Moneta Referral Accounts:
(a) Items of pro forma income attributable to Moneta Referral
Accounts for each accounting period shall be as follows:
(1) Mortgage income received and gains recorded on
account of mortgages sold, net of originating commissions and net of
documentation costs (as imputed by Bank in its normal course of
operations),
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(2) Interest income received in respect of loan
accounts (other than mortgages sold), and
(3) Attributed interest income on the excess, if
any, of aggregate Moneta Referral Account deposits over the
aggregate of Moneta Referral Account loans determined on the basis of
the Bank's weighted average rate of return during the accounting period
with respect to (i) its cash and due from, (ii) its federal funds sold
portfolio and (iii) its yield from investment securities.
For purposes of the determinations in clause (3)
above, the amount of deposits in excess of loans, if any, will be
determined using the average daily balances in deposit accounts.
(b) Items of pro forma expense attributable to Moneta Referral
Accounts for each accounting period shall be as follows:
(1) interest expense on deposit accounts
(2) a provision expense equal to the sum of:
(i) the amount required to
preserve a 1.25% reserve for all loans
which are Moneta Referral Accounts based
on the amount of such loans outstanding as
of the last day for the reporting period,
and
(ii) .15% of average loans during
the accounting period which are Moneta
Referral Accounts for assumed actual
losses; and
(3) in the event that during the accounting period the amount
of average loans to Moneta Referral Accounts exceeds that amount of
average deposits from Moneta Referral Accounts, then there shall be
charged as an item of expense an amount equal to such excess times the
average cost of funds to the Bank.
(c) The difference between the pro forma income items and the
pro forma expense items shall be the Pro Forma Net Interest Margin
attributable to the Moneta Referral Accounts. Such Pro Forma Net
Interest Margin shall not be reduced by expenses related to the
general overhead of the Bank or any actual charge off or losses
arising with respect to loans which are Moneta Referral Accounts.
(d) The preparation of the Pro Forma Income Statement and the
determination
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of the Pro Forma Net Interest Margin shall be made
by the Chief Financial Officer of the Bank for the accounting
periods ending September 30 each calendar year during the term of
this Agreement; it being recognized that the initial period ending
September 30, 1998, will be for a period of eleven months and may
contain such other adjustments as are determined by the Joint
Relationship Committee. In the event of a termination of the
relationship established by this Agreement prior to its
expiration, the Chief Financial Officer of the Bank shall
determine the Net Interest Margin for any interim period ending
with the date of such termination.
(e) The Pro Forma Income Statement and related information
concerning the determination of the Pro Forma Net Interest Margin
shall be provided by the Chief Financial Officer of the Bank to
the Joint Relationship Committee for review, provided, however,
that such information shall not identify specific Moneta Referral
Accounts giving rise to items of income or expense or permit the
members of the Joint Relationship Committee to identify account
balances of the holders of specific loan or deposit accounts.
8. Additional duties of Joint Relationship Committee; Resolution of
Disputes. In addition to its role in designating certain Bank customer
accounts as "Moneta Referral Accounts," the Joint Relationship Committee shall
function to (i) review the determination by the Chief Financial Officer of the
Bank of the Pro Forma Net Interest Margin and, upon acceptance of such
determination by the Joint Relationship Committee, (ii) certify such result to
the Chief Executive Officer of Moneta and to the Chief Executive Officer of
Holdings and (iii) endeavor to resolve disputes arising under the terms of
this Agreement or under the "Moneta Bank Marketing and Solicitation Agreement"
constituting Exhibit II hereto. In the event that the Joint Relationship
Committee shall be divided and in dispute as to any matter and unable to
resolve such dispute internally, such dispute shall be resolved as follows:
(a) if the dispute relates to the determination of the Pro
Forma Net Interest Margin or other financial calculation, the
dispute will be referred to the then current independent
accountants engaged by Holdings and the Bank for resolution and
the determination of such firm shall be conclusive; or
(b) if the dispute relates to facts concerning the designation
of an account as a "Moneta Referral Account" or other factual
matter or to a matter arising under the "Moneta Bank Marketing
and Solicitation Agreement", the dispute will be resolved by
means of an "abbreviated arbitration" whereby Moneta and the Bank
shall agree upon a single person to be designated as arbitrator
and the decision of such arbitrator shall be final; provided,
however, that in the event that Moneta and Bank are unable to
agree on a single arbitrator to resolve such dispute, each of
Moneta and Bank shall appoint one arbitrator and the arbitrators
so selected shall appoint a third arbitrator who will serve as
chairman of the panel.
Any arbitration in accordance with clause (b) shall be conducted in
accordance with the rules of the American Arbitration Association unless
otherwise then agreed by the parties.
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9. Award and issuance of Options to acquire shares of the Common Stock of
Holdings to principals and employees of Moneta based upon Pro Forma Net
Interest Margin. As an inducement to Moneta and its personnel to provide
referrals of clients and customers of Moneta to the Bank leading to the
establishment of Moneta Referral Accounts, Holdings agrees to issue options
("Options") to acquire shares of its common stock as follows:
(a) Following certification by the Joint Relationship Committee
of the Pro Forma Net Interest Margin for each accounting period in
the term of this Agreement, Holdings will issue Options to
acquire shares of its common stock relating to a number of shares
of such common stock equal in the aggregate to the lesser of:
(1) 50,000 shares of such common stock (subject to
adjustment to reflect any stock split, stock dividend, combination or
other recapitalization of the common stock of Holdings subsequent to
the date of this Agreement); or
(2) a number of shares equal to 75% of (x) the amount by which
such Pro Forma Net Interest Margin exceeds the highest level of Pro
Forma Net Interest Margin attained in any prior accounting period in
the term of this Agreement divided by (y) the Market Value Per Share of
Holdings' common stock, as hereinafter defined; provided, however, that
for the accounting period ending September 30, 1998, as to which there
is no prior accounting period in the term of this Agreement, "(x)" in
the foregoing formula shall be an amount equal to the Pro Forma Net
Interest Margin for such accounting period;
plus the number of shares included in any Options
being re-issued as a result of forfeitures, if any, as provided in
paragraph 10(d) below.
In the event that the number of shares determined in
accordance with clause (2) above exceeds, as to any accounting
period, the limitation imposed by clause (1) above, such excess
number of shares shall be carried forward and added to the number
of shares to be placed under option for the following accounting
period to the extent that shares are then available but the
exercise price for any such deferred awards shall be based on the
Market Value Per Share as of the actual date of award of the
Option and such carry-forward shall not increase the limitation in
(1) above applicable to such later accounting period, but may
result in a further carry-forward.
(b) Each Option to be awarded and issued as a result of the
foregoing shall be issued and evidenced by a Stock Option
Agreement in the form of Exhibit III hereto and shall provide for
an exercise price per share equal to the Market Value
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Per Share as of the date of award of the Option. Notwithstanding
the actual date of award of such Option and execution of the
related Stock Option Agreement, each such Option shall bear a date
of grant as of the last day of the period for which it is awarded.
(c) Anything in this Agreement to the contrary notwithstanding,
the maximum number of shares of the common stock of Holdings to be
subject to Options awarded hereunder shall not exceed 200,000
(subject to adjustment to reflect any stock split, stock dividend,
combination or other recapitalization of the common stock of
Holdings subsequent to the date of this Agreement).
(d) For purposes of this Agreement and any Options granted
pursuant hereto, the Market Value Per Share of Holdings' common
stock shall be determined as follows:
(1) if the common stock of Holdings is traded on a national
securities exchange registered under the Securities Exchange Act of
1934 or if quotations for such stock are carried in the Nasdaq over-
the-counter market maintained by the National Association of Securities
Dealers, Inc., then the Market Value Per Share of Holdings' common
stock shall be equal to the reported closing price per share of such
stock as of the date of grant to be reflected in the Option;
(2) if the common stock of Holdings is not traded as provided
in (1) above, the Market Value Per Share shall be based upon the
weighted average of the prices paid per share of such common stock in
arm's-length transactions not involving Holdings or any director or
executive officer of Holdings reflected in respect of blocks of 500
shares or more occurring within the 90 days preceding the date of grant
to be reflected in the Option; or
(3) if the common stock of Holdings is not traded as provided
in (1) above and there are fewer than three transactions available to
determine the price in (2) above, then the Market Value Per Share shall
be determined in good faith by the Board of Directors of Holdings in
consultation with the firm of X. X. Xxxxx & Co. or another
broker-dealer as may be agreed by Holdings and Moneta.
(e) As promptly as practicable following its receipt of the
certification of the Pro Forma Net Interest Margin, Holdings shall
advise Moneta in writing of the number of shares to be subject to
Option as a result of the formula provided in (a) above and of the
Market Value Per Share.
(f) The Options to be awarded and issued by Holdings shall be
issued to the
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individuals designated to it by Moneta in accordance with paragraph
10 below.
(g) Holdings agrees that it shall reserve from its authorized
but unissued shares of common stock a sufficient number of shares
to permit the award and exercise of Options issuable in accordance
with the foregoing.
(h) Concurrent with the first issuance of an Option to any
optionee in accordance with the terms of this Agreement, Holdings
will deliver to such optionee a copy of its most recent report on
Form 10-K filed under the Securities Exchange Act of 1934, as
amended, together with copies of all subsequent interim reports
filed under such Act. For so long as such optionee holds any
unexercised Option issued pursuant to this Agreement, Holdings
shall deliver copies of all subsequent filings made by it under
sections 13, 14 or 15 of the Securities Exchange Act of 1934, as
amended.
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10. Allocation and Designation of Option Awards to Individuals; Reallocation
of Forfeited Option Awards.
(a) As promptly as practicable following its receipt of written
notice from Holdings relating to the number of shares to be
covered by Options and the Market Value Per Share, and in any
event within thirty days of such notice, Moneta shall provide to
Holdings a listing of the principals and employees of Moneta to
whom Options are to be granted and the number of shares to be
covered by the Option to be granted to each individual so listed.
Such allocation and designation shall be made in the sole
discretion of Moneta, having due regard for the contributions of
such personnel to the referrals resulting in "Moneta Referral
Accounts"; provided, however, that the total number of individuals
to whom Options may be granted during the term of this Agreement
shall not exceed (i) the number of resulting optionees who are
"accredited investors" as that term is defined in Regulation D
under the Securities Act of 1933, as amended, plus (ii) 35. In
providing the listing of optionees to Holdings, Moneta shall
certify which of such individuals constitute "accredited
investors" and shall provide to Holdings such optionees'
respective taxpayer identification numbers, residence address and
such other information as Holdings may reasonably request. In
addition to the foregoing restrictions and provisions, Moneta
agrees that Holdings may impose such additional limitations on the
number and nature of the recipients as may be required, in the
opinion of counsel to Holdings, to satisfy the availability of
exemptions from registration of the offer and sale pursuant to the
Options under the Securities Act of 1933, as amended, and any
applicable state securities law.
(b) Within thirty days following its receipt of the listing of
optionees from Moneta as provided in (a), Holdings shall prepare,
execute and deliver Stock Option Agreements in the form of Exhibit
III reflecting each individual Option.
(c) In the event of any termination of employment with Moneta
which would give rise to a forfeiture of all or any part of an
Option, Moneta shall immediately provide written notice of such
event to Holdings.
(d) Following any such termination of employment giving rise to
a forfeiture of all or any part of an Option, Holdings shall
advise Moneta of the number of shares subject to the Options, or
any portions thereof, which have been forfeited as a result of
such termination of employment, together with the number of shares
subject to the exercisable portion of any such Option which are
not purchased pursuant to an exercise of the Option in accordance
with its terms. Such notice by Holdings shall be given as
promptly as possible after the later of (i) receipt by Holdings of
the notice of termination of employment from Moneta or (ii) the
expiration date of the Option as provided in such Option.
Holdings agrees to reissue one or more Options covering, in the
aggregate, the number of forfeited shares and of unexercised
shares subject to the following terms and conditions:
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(1) Moneta shall designate to Holdings the names of reallocated
recipients for any such reissued Options and number of shares to be
covered by each such reissued Option within thirty days following its
receipt of notice from Holdings as to the number of shares available
for reallocation;
(2) Holdings shall issue such reallocated Option(s) only if,
and at the next such time as, any other Options are to be granted in
accordance with paragraph 9(a)(2) of this Agreement. (It being
understood that in the event of any forfeiture in the final year of
this Agreement, no reissuance shall result.)
(3) Any such reallocated and reissued Options shall be issued
as new Options providing for an exercise price based upon the Market
Value Per Share as of the date of award and a full ten year term and
shall otherwise comply with the requirements of clause (a) above.
(e) Moneta agrees to indemnify and hold Holdings harmless from
and against any loss, damage, claim or expense arising out of or
based upon allocation and issuance of Options in accordance with
the listing and instructions provided to Holdings by Moneta.
11. Term of the Agreement; Termination.
(a) This Agreement shall be for a term of five years commencing
on the date hereof and expiring on September 30, 2002; provided,
however, that:
(1) the expiration of this Agreement at the end of the term or
otherwise shall not relieve Bank of its obligation to determine the Pro
Forma Net Interest Margin for the final accounting period of this
Agreement or the obligation of Holdings to issue Options in accordance
with the terms of this Agreement with respect to such final
accounting period;
(2) the expiration or termination of this Agreement shall not
affect the validity of any outstanding Option except that (x) in the
event of a forfeiture applicable to an Option occurring subsequent to
the expiration or termination of this Agreement the unexercised and
unexercisable portion of such Option shall lapse and become void and
(y) in the event of termination of this Agreement prior to the
expiration of its stated term, the right to further vesting under the
Option and to exercise such Option shall be governed by paragraph 3(d)
of the Stock Option Agreement; and
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(3) the expiration of this Agreement at the end of the term or
otherwise shall not terminate the indemnification and hold harmless
obligations and covenants of the parties as set forth herein.
(b) This Agreement may be terminated prior to the expiration of
its term (i) upon the mutual agreement of the Bank and Moneta,
(ii) at the election of any party in the event that Holdings or
the Bank shall have been subject to an Extraordinary Event, as
hereinafter defined, (iii) in the event of a default or breach of
this Agreement by Moneta, this Agreement may be terminated at the
written election of Holdings or the Bank unless such default or
breach is curable and shall have been cured by Moneta within 30
days of its occurrence, and (iv) in the event of a default or
breach of this Agreement by Bank or Holdings or of the Moneta Bank
Marketing and Solicitation Agreement by Bank, this Agreement may
be terminated at the written election of Moneta unless such
default or breach is curable and shall have been cured by Holdings
or Bank, as the case may be, within 30 days of its occurrence. An
election of a party to terminate this Agreement in accordance with
clause (iii) or clause (iv) above shall not relieve the defaulting
or breaching party from liability to a non-defaulting party for
loss or damage suffered as a result of such default. In addition
to the foregoing, Holdings shall have the right to terminate this
Agreement (a) in the event of any enforcement action or proceeding
instituted against Moneta under the Securities Exchange Act of
1934 or the Investment Advisers Act of 1940 or instituted by the
National Association of Securities Dealers, Inc. which, in the
reasonable judgment of Holdings adversely affects the reputation
or integrity of Moneta or jeopardizes regulatory licenses held by
Moneta or (b) in the event that the business and operations of
Moneta shall be acquired (whether by merger, sale of assets or
sale of stock) or a change of control of Moneta shall occur.
(c) For purposes of this Agreement, an Extraordinary Event
relating to Holdings or the Bank shall be deemed to involve:
(i) any merger or consolidation involving Holdings other than a
merger or consolidation in which the outstanding capital stock of
Holdings immediately prior to the effectiveness of such merger or
consolidation is converted into (or remains outstanding and
constitutes) a majority of the voting common stock of the surviving or
resulting entity; or
(ii) any transaction pursuant to which a majority of the
outstanding capital stock of either Holdings or of the Bank is acquired
by a person or group pursuant to a tender offer or plan of acquisition
or reorganization.
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12. Commencement and Effective Date; Void if not Effective. The accoutning
period subject to this Agreement shall commence on the last of the following
events to occur:
(a) the opening of business on November 3, 1997;
(b) the execution and delivery of this Agreement by all parties
hereto;
(c) the execution and delivery of the "Moneta Bank Marketing and
Solicitation Agreement" among Moneta, the Bank and X. X. Xxxxxxxx
& Co., Inc. in the form of Exhibit II hereto by all parties
thereto;
(d) the closing of the sale(s) to one or more principals of
Moneta from Holdings of not less than 59,701 and not more than
119,403 shares of the common stock of Holdings at a price of
$16.75 per share in a private placement in accordance with the
exemption provided by Regulation D under the Securities Act of
1933, as amended,
and shall end on September 30, 1998; provided, however, that in the event that
all of such conditions have not been met on or before November 15, 1997, this
Agreement and the transactions contemplated hereby shall be null and void.
13. Representations, Warranties and Covenants of the Parties. As an
inducement to enter and perform in accordance with the terms of this
agreement, the parties hereto make the following representations, warranties
and covenants to each of the other parties hereto.
(a) By Holdings:
(1) Holdings is a corporation duly organized and validly
existing under the laws of the State of Delaware with full corporate
power and authority to execute, deliver and perform this Agreement.
Holdings has sufficient authorized but unissued shares of its common
stock for the purpose of the Options to be issued under this Agreement.
(2) The execution, delivery and performance of this Agreement
by Holdings will not violate or conflict with any provision of, or
constitute a default under, any law, or any order, writ, injunction,
decree of any court or other governmental agency, or any contract,
agreement or instrument to which Holdings is a party or by which
Holdings or any of its subsidiaries is a party or by which any of
them is bound or constitute an event which, with the lapse of time or
action by a third party or both, could result in the creation of any
lien, charge or encumbrance upon any of the assets or properties of
Holdings.
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(3) The Board of Directors of Holdings has authorized and
approved the execution and delivery of this Agreement and the
transactions contemplated hereby. This Agreement constitutes a valid
and binding obligation of Holdings in accordance with its terms.
(4) Holdings has heretofore delivered to Moneta true, correct
and complete copies of all filings required of it under section 15(d)
of the Securities Exchange Act of 1934, as amended. Holdings covenants
and agrees that during the term of this Agreement and for so long
thereafter as any Option issued pursuant hereto is outstanding, it will
either (i) remain subject to and use its best efforts to file in a
timely manner all reports required under section 15(d) of the
Securities Exchange Act of 1934, as amended, or (ii) will cause its
common stock to be registered as a class of securities under section 12
of the Securities Exchange Act of 1934, as amended, and in such event
will use its best efforts to file in a timely manner all reports
required under section 13 or 14 of the Securities Exchange Act of
1934.
(b) By Bank.
(1) Bank is a banking corporation duly organized and validly
existing under the laws of the State of Missouri with full corporate
power and authority to execute, deliver and perform this Agreement.
(2) The execution, delivery and performance of this Agreement
by Bank will not violate or conflict with any provision of, or
constitute a default under, any law, or any order, writ, injunction,
decree of any court or other governmental agency, or any contract,
agreement or instrument to which Bank is a party or by which Bank is
bound or constitute an event which, with the lapse of time or action by
a third party or both, could result in the creation of any lien, charge
or encumbrance upon any of the assets or properties of Bank.
(3) The Board of Directors of Bank has authorized and approved
the execution and delivery of this Agreement and the transactions
contemplated hereby. This Agreement constitutes a valid and binding
obligation of Bank in accordance with its terms.
(c) By Moneta.
(1) Moneta is a corporation duly organized and validly existing
under the laws of the State of Missouri with full corporate power and
15
authority to execute, deliver and perform this Agreement.
(2) The execution, delivery and performance of this Agreement
by Moneta will not violate or conflict with any provision of, or
constitute a default under, any law, or any order, writ, injunction,
decree of any court or other governmental agency, or any contract,
agreement or instrument to which Moneta is a party or by which Moneta
is bound, or constitute an event which, with the lapse of time or
action by a third party or both, could result in the creation of any
lien, charge or encumbrance upon any of the assets or properties of
Moneta.
(3) The Board of Directors of Moneta has authorized and
approved the execution and delivery of this Agreement and the
transactions contemplated hereby. This Agreement constitutes a valid
and binding obligation of Moneta in accordance with its terms.
(4) Moneta is duly registered with the Securities and Exchange
Commission as an investment adviser under the Investment Advisers Act
of 1940, as amended, and has heretofore provided to each of Holdings
and Bank true, correct and complete copies of its registration
statement on form ADV as amended to date. Moneta covenants and agrees
that during the term of this Agreement it will deliver to Holdings and
Bank copies of all subsequent amendments to such form ADV and copies of
all disciplinary order or proceedings instituted against Moneta or any
other regulatory or self-regulatory body during the term of this
Agreement.
14. Indemnification.
(a) By Holdings and the Bank. Holdings and the Bank shall jointly
and severally defend, reimburse, indemnify and hold Moneta harmless
from and against any and all loss, claim, damage, liability, actions,
costs or expenses to which Moneta may become subject (including any
legal or other expenses reasonably incurred by Moneta in connection
with investigating any claim against it and any amounts paid in
settlement or compromise, provided the Bank shall have given its prior
written approval of such settlement or compromise), insofar as such
loss, claim, damage, liability, action, cost or expense arises in
connection with: (i) the breach by Bank or Holdings of any
representation, warranty or covenant made by the Bank herein; (ii) any
act or omission to act, whether negligent, reckless or intentional, by
the Bank or Holdings or their employees or affiliates in connection
with the subject of this Agreement or (iii) as otherwise specifically
provided in this Agreement. For purposes of the foregoing provision,
the term "Moneta" shall be deemed to include its officers, directors
and employees.
16
(b) By Moneta. Moneta shall defend, reimburse, indemnify and hold
Bank and Holdings harmless from and against any and all loss, claim,
damage, liability, actions, costs or expenses to which Bank or Holdings
may become subject (including any legal or other expenses reasonably
incurred by Bank or Holdings in connection with investigating any claim
against it and any amounts paid in settlement or compromise, provided
the Bank and Holdings shall have given their prior written approval of
such settlement or compromise), insofar as such loss, claim, damage,
liability, action, cost or expense arises in connection with: (i) the
breach by Moneta of any representation, warranty or covenant made by
Moneta herein; (ii) any act or omission to act, whether negligent,
reckless or intentional, by Moneta or its employees or affiliates in
connection with the subject of this Agreement; or (iii) as otherwise
specifically provided in this Agreement. For purposes of the foregoing
provision, the terms "Bank" and "Holdings" shall be deemed to include
their respective officers, directors and employees.
(c) Notice of Indemnification. In the event any legal proceeding is
threatened or instituted or any claim or demand is asserted by any
person for which payment may be sought by one party hereto from the
other under the provisions of this Agreement, the party seeking
indemnification (the "Indemnitee") will promptly cause written notice
of the assertion of any such claim of which it has knowledge to be
forwarded to the other party (the "Indemnitor"). Any notice of claim
will state specifically the representation, warranty, covenant or other
agreement with respect to which the claim is made, the facts giving
rise to an alleged basis for the claim and, insofar as then
determinable, the amount and nature of liability asserted against the
Indemnitor by reason of the claim.
(d) Indemnification Procedure for Third-Party Claims. In the event
of the initiation of any legal proceeding against an Indemnitee by a
third party, the Indemnitor will have the absolute right after the
receipt of notice, at its option and at its own expense, to be
represented by counsel of its choice, and to defend against, negotiate,
settle or otherwise deal with any proceeding, claim or demand which
relates to any loss, claim, liability or damage indemnified against
hereunder; provided, however, that the Indemnitee may participate in
any such proceeding, with counsel of its choice and at its own expense.
The parties hereto agree to cooperate fully with each other in
connection with the defense, negotiation or settlement of any such
legal proceeding, claim or demand. To the extent the Indemnitor elects
not to defend such proceeding, claim or demand, and the Indemnitee
defends against or otherwise deals with any such proceeding, claim or
demand, the indemnitee may retain counsel, at the Indemnitor's expense,
and control the defense of such proceeding. Neither the Indemnitor
nor the Indemnitee may settle any such proceeding without the consent
of the other party, such consent not to be unreasonably withheld.
After any final judgment or award has
17
been rendered by a court, arbitration panel or administrative agency of
competent jurisdiction and the time in which to appeal therefrom has
expired, or a settlement has been consummated, or the Indemnitee and
the Indemnitor have arrived at a mutually binding agreement with
respect to each separate matter alleged to be indemnified by the
Indemnitor hereunder, the Indemnitee will forward to the Indemnitor
notice of any sums due and owing by it with respect to such matter and
the Indemnitor will pay all of the sums so owing to the Indemnitee by
wire transfer, certified or bank cashier's check within thirty days
after the date of such notice.
15. Non-Solicitation Covenants. Upon any termination of this Agreement,
whether upon expiration of its stated term or otherwise,
(a) Moneta agrees that it will not, for a period of 18 months
following the date of such termination, solicit or otherwise
induce the holder of any Moneta Referral Account to move, transfer
or relocate any of such holder's accounts from the Bank; and
(b) Holdings and Bank agree that (except in the event of a
termination at the election of Bank arising under the last
sentence of clause 11(b)) they will not, for a period of 18 months
following the date of such termination, solicit or otherwise
induce any Bank customer referred to Moneta under the terms of the
Moneta Bank Marketing and Solicitation Agreement to move, transfer
or relocate such customer's accounts from Moneta.
For purposes of the foregoing, the phrase "solicit or otherwise induce" shall
be deemed to include, without limitation, not only direct action but also
indirect action such as providing or referring customers names to other
parties for solicitation of any move, transfer or relocation of a customer's
or holder's account(s).
16. Miscellaneous.
(a) Entire Agreement. This Agreement, together with the
Exhibits hereto, constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes
all prior agreements or understandings of the parties hereto.
(b) Amendments. This Agreement may be amended by the parties
hereto at any time by action taken by, or pursuant to authority
delegated by, their respective Boards of Directors, provided,
however that no amendment which shall alter the form or terms of
any Option hereunder shall affect the terms or construction of any
Option issued prior to the date of such amendment without the
consent of the optionee.
18
(c) Captions and Headings. All headings or captions contained
in this Agreement or in any Exhibit hereto are for convenience of
reference only and shall not be deemed a part of this Agreement
and shall not affect the meaning or interpretation of the
Agreement.
(d) No Third-Party Rights. Except for the rights of the
optionees under any Option granted pursuant hereto and except for
the treatment of officers, directors and employees of the parties
as potential indemnitees in accordance with the terms of paragraph
14, no provision of this Agreement shall be deemed or construed in
any way to result in the creation of any rights or obligations in
any person or entity not a party to this Agreement.
(e) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original but all
of which together shall constitute a single instrument.
(f) Governing Law. Except regarding matters controlled by
federal law, this Agreement shall be governed and construed in
accordance with the laws of the State of Missouri excluding any
choice of law rules which may direct the application of the law of
another state; provided, however, that matters of law concerning
the internal corporate affairs of Holdings shall be governed by
the general corporation laws of its state of incorporation.
(g) Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns; provided, however, that
except by operation of law no party may assign any of its rights,
duties or obligations hereunder without the prior written consent
of each other party; and provided, further, that no assignment of
this Agreement or any rights hereunder shall relieve the assigning
party of any of its obligations or liability hereunder.
(h) Notices. All notices or other communications required or
permitted to be given hereunder shall be deemed validly given if
in writing and sent (i) by certified United States Mail, postage
prepaid, return receipt requested, (ii) by prepaid independent
overnight courier or delivery service, or (iii) by confirmed
tele-facsimile communication with receipt acknowledged from the
receiving machine and addressed as follows:
19
If to Holdings or the Bank, as follows:
Enterprise Bank/Enterbank Holdings, Inc.
000 Xxxxx Xxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Chief Executive Officer
facsimile: 000-000-0000
If to Moneta, as follows:
Moneta Group Investment Advisors, Inc.
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Attn: President
facsimile: 000-000-0000
or in any case to such other address or addresses as hereafter
shall be furnished by any party hereto to the other parties hereto.
(i) Severability. If any provision of this Agreement is found
or declared to be invalid or unenforceable by any court or other
competent governmental regulatory agency having jurisdiction, such
finding or declaration shall not invalidate any other provision
hereof and this Agreement shall thereafter continue in full force
and effect except that such invalid or unenforceable provision,
and (if necessary) other provision(s) thereof, shall be reformed
by a court of competent jurisdiction so as to effect, insofar as
is practicable, the intention of the parties as set forth in this
Agreement, provided that if such court is unwilling or unable to
effect such reformation, the invalid or unenforceable provision
shall be deemed deleted to the same extent as if it had never
existed.
(j) Expenses. Except as otherwise specifically provided in this
Agreement, each party to this Agreement shall pay its respective
expenses incurred in connection with the preparation and
performance of this Agreement and the transactions contemplated
hereby.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY
BE ENFORCED BY THE PARTIES.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
respective parties as of the date first written above.
ENTERBANK HOLDINGS, INC.
By----------------------
ENTERPRISE BANK
By-----------------------
MONETA GROUP INVESTMENT ADVISERS, INC.
By-----------------------------
MONETA BANK MARKETING AND SOLICITATION AGREEMENT
------------------------------------------------
THIS AGREEMENT is made this 31st day of October, 1997, by and among
Moneta Group Investment Advisors, Inc. ("Moneta"), X.X. Xxxxxxxx & Co., Inc.
("XX Xxxxxxxx") and Enterprise Bank (the "Bank").
BACKGROUND
----------
Moneta is a investment adviser registered with the Securities and
Exchange Commission ("SEC") under the Investment Advisers Act of 1940
("Advisers Act") that desires to offer certain investment advisory and
financial planning services to customers of the Bank.
Investment adviser representatives of Moneta are dually licensed as
registered representatives of XX Xxxxxxxx, a broker-dealer registered
with the SEC under the Securities and Exchange Act of 1934 and a member
of the National Association of Securities Dealers ("NASD"), who desire
to offer certain securities and related services to customers of the
Bank (collectively, "Moneta Representatives").
Moneta Representatives also are licensed insurance agents who desire to
offer certain insurance products and related services to customers of
the Bank.
The Bank desires to make Moneta's investment advisory services and the
securities products and services and insurance products and services
offered by Moneta Representatives, as described in this Agreement,
available to the Bank's customers.
AGREEMENT
---------
The Bank, Moneta and XX Xxxxxxxx agree as follows:
1. MONETA BANK MARKETING PROGRAM. Moneta agrees to provide the
-----------------------------
Moneta Bank Marketing Program primarily at its office located at 000 Xxxxxxxxx
Xxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, although Moneta
Representatives may, from time to time, choose to meet with Bank customers at
the Bank's offices. The Moneta Bank Marketing Program consists of the
following services:
1.1 Investment Advisory Services. Moneta may offer Bank
----------------------------
customers financial planning and investment advisory services designed to meet
a variety of the customers' financial needs, including, but not limited to,
financial planning with respect to money management, investments, tax
strategies, retirement planning, insurance and risk management, education
funding, estate valuation, retirement planning, life, health and disability
insurance,
20
business continuation planning and XXX lump sum distribution analysis. Moneta
will maintain client accounts on its books for advisory clients.
1.2 Bank Solicitation of Customers on Behalf of Moneta. The
--------------------------------------------------
Bank, through its employees (the "Bank Employees"), will market the investment
advisory services of Moneta to persons who would become clients of Moneta by
opening investment advisory accounts with Moneta.
1.2.1 Neither the Bank nor any Bank Employee who will
solicit customers on behalf of Moneta is subject to any disqualification from
acting as a solicitor as specifically set forth on Schedule 1.2.1 attached
--------------
hereto.
1.2.2 The Bank's solicitation activities on behalf of
Moneta shall be limited to explaining the investment advisory services
provided by Moneta and Moneta's fees for such services, and providing to
prospective clients materials prepared by Moneta for use in the solicitation
of prospective clients. Neither the Bank nor any Bank Employee shall make any
investment recommendations or give any investment advice to clients or
prospective clients while acting on behalf of Moneta hereunder. Without the
prior written consent of Moneta, the Bank may not publish or disseminate any
literature or other materials describing Moneta's investment advisory
services.
1.2.3 The Bank and Moneta may prepare a brochure for mass
mailing to the Bank's customers that describes Moneta's advisory services and
permits the customer to: (1) return a reply card requesting additional
information; (2) sign up for seminars sponsored by Moneta; or (3) sign up for
individual meetings with a Moneta representative. The brochure will state
that a solicitation agreement exists under which Moneta will pay the Bank a
fee if the customer purchases investment advisory services from Moneta, and
that further information regarding Moneta, including its brochure containing
the information set forth in Part II of its Form ADV, the solicitor's
disclosure statement required by Section 206(4)-3 of the Advisers Act, and
other marketing materials will be provided at the time that the customer
returns the reply card or attends a seminar or meeting. With respect to
personal solicitations by a Bank Employee, the Bank Employee shall provide
each potential client with a current copy of Moneta's written disclosure
statement as required by Section 204-3 and Rule 206(4)-3 of the Advisers Act,
and ensure that Moneta receives an original copy, signed by the client, of the
separate disclosure statement (in the form of Schedule 1.2.3 hereto)
--------------
containing information about the Bank and the relationship to Moneta, as
required by Rule 206(4)-3(b) of the Advisers Act. In performing its duties
under this Agreement, the Bank shall: (i) abide by the terms of this
Agreement and in a manner consistent with the instructions of Moneta; and (ii)
be governed by the provisions of the Advisers Act and the rules promulgated
thereunder and any applicable state securities laws and rules.
2
21
1.2.4 The Bank understands and agrees that it will advise
clients and prospective clients that Moneta does not guarantee any specific
results from Moneta's investment advisory services.
1.2.5 All prospective clients are subject to acceptance by
Moneta in its sole discretion.
1.2.6 The Bank and its Employees are independent
contractors and not employees of Moneta. The Bank shall not take any actions
or make any representations to any person that would suggest any other
relationship between the Bank and Moneta exists. Neither the Bank nor its
Employees shall have any right or authority to assume or create any
obligations on the part of Moneta, express or implied, nor shall they
represent to any person they have such authority.
1.3 Brokerage Services. Moneta Representatives will execute
------------------
purchases, sales and trades of securities and will sell insurance products in
their capacity as registered representatives of XX Xxxxxxxx and as licensed
agents of various insurance companies. XX Xxxxxxxx, acting as an introducing
broker/dealer, will introduce clients to its clearing firm, Correspondent
Services Corporation, an affiliate of Xxxxx Xxxxxx, who will maintain client
accounts on its books and will execute and clear securities transactions on a
fully disclosed basis.
1.4 Bank Marketing Products. Securities and insurance products
-----------------------
which may be sold by Moneta Representatives through the Moneta Bank Marketing
Program ("Bank Marketing Products") may include equities, mutual funds, unit
investment trusts, corporate, government or municipal bonds, variable
annuities, fixed rate annuities, and other life and health insurance products
and other investment products and instruments. Products shall be subject to
the following restrictions: (i) all fixed income securities shall be
investment grade or better at the time of sale; (ii) no commodities (including
options for or contracts for future delivery of commodities) shall be included
as Bank Marketing Products; (iii) no securities of the Bank or any affiliate
of the Bank shall be recommended by Moneta, and if Moneta Representatives
execute transactions in securities of the Bank or any affiliate of the Bank,
no payment shall be made to the Bank; (iv) no "xxxxx stocks," as defined by
Rule 3a51-1 of the Securities Exchange Act of 1934, shall be included as Bank
Marketing Products; (v) if prohibited by any regulation applicable to the
Bank, no securities with respect to which XX Xxxxxxxx may act as a dealer,
market maker or underwriter shall be included as Bank Marketing Products; (vi)
no options (other than covered call options) shall be included as Bank
Marketing Products; and (vii) no futures contracts shall be included as Bank
Marketing Products. The Bank shall have no involvement in Moneta's selection
of securities or insurance products to offer through the Bank Marketing
Program. Moneta Representatives may accept a sell order for any security.
2. MARKETING, TRAINING AND TECHNICAL ASSISTANCE. As part of
--------------------------------------------
the Moneta Bank Marketing Program, Moneta and XX Xxxxxxxx, at their sole
expense, shall provide the following:
3
22
2.1 Trained, NASD-registered principals to assist and supervise
Moneta Representatives;
2.2 Advice to the Bank regarding the preparation by the Bank of
materials relating to the Moneta Bank Marketing Program, including a prior
review of any such materials;
2.3 Compliance procedures for the implementation of the Moneta
Bank Marketing Program and ongoing monitoring of compliance procedures. The
supervisory and compliance requirements applicable to the Moneta Bank
Marketing Program shall be set forth in a manual (the "Compliance Manual")
prepared by XX Xxxxxxxx. The Compliance Manual shall be made available to the
Bank and each Moneta Representative (as defined in Section 3.1);
-----------
2.4 Compliance by Moneta and XX Xxxxxxxx with federal and state
securities laws, rules and regulations applicable to the Moneta Bank Marketing
Program, as well as applicable rules and regulations of self-regulatory bodies
and internal policies and procedures of Moneta and XX Xxxxxxxx;
2.5 Appropriate due diligence in connection with Bank Marketing
Products;
2.6 Information about to whom Bank Marketing Products were sold
in such detail and in such format as Moneta determines, including providing
copies of account opening forms; and
2.7 Design and lay-out of signs, advertising and promotional
materials regarding the Moneta Bank Marketing Program.
3. MONETA REPRESENTATIVES.
----------------------
3.1 Defined. Securities and insurance products marketed through
-------
the Moneta Bank Marketing Program shall be offered and sold, and transactions
in those securities and insurance products shall be effected only by Moneta
Representatives, who, during the term of this Agreement, (i) shall be
employees of Moneta and independent contractors of XX Xxxxxxxx, (ii) shall be
registered and qualified as necessary with the SEC, the NASD and appropriate
state regulatory authorities, and (iii) shall be licensed as insurance agents
with appropriate state regulatory authorities.
3.2 Restrictive Covenant. Moneta and the Bank expressly
--------------------
acknowledge and agree that the relationships which Moneta has with Moneta
Representatives are key assets of Moneta, and that by reason of this Agreement
the Bank will have special and unique access and will occupy a special and
unique position with respect to Moneta Representatives. Therefore, the Bank
agrees and warrants that, during the period in which a Moneta Representative
is participating in the Moneta Bank Marketing Program with the Bank described
in this Agreement
4
23
and for one (1) year after termination of such participation, the Bank and its
affiliates shall not, either directly or indirectly, on behalf of the Bank, or
on behalf of any of the Bank's affiliates, or as an agent or shareholder of any
corporation or other business, or member of any firm, or participant in any
venture, (i) induce any Moneta Representative to terminate his or her contract
with Moneta or one of its affiliates, or (ii) engage, hire, employ or solicit
the employment of any Moneta Representative. The Bank expressly acknowledges
that the foregoing limitation is reasonable and properly required for the
adequate protection of the business of Moneta.
3.3 Recruitment, Training and Sales Management. Moneta and WS
------------------------------------------
Xxxxxxxx will, at no cost to the Bank, recruit, train, test, compensate and
provide ongoing sales management and continuing education of Moneta
Representatives. Compensation paid by XX Xxxxxxxx to Moneta Representatives
will include commissions. Moneta Representatives shall devote their full time
to the business of Moneta.
3.4 Control. Moneta and XX Xxxxxxxx shall exercise exclusive
-------
control over Moneta Representatives and shall be responsible for all
activities of Moneta Representatives in connection with the Moneta Bank
Marketing Program. The conduct of Moneta Representatives shall be governed in
all respects by the Compliance Manual and instructions provided by Moneta and
XX Xxxxxxxx, as well as by applicable laws, rules and regulations. The Bank
shall strictly honor such control relationship and shall not have any
involvement whatsoever in any of the security brokerage, investment advisory
and insurance services performed by Moneta Representatives.
3.5 Restrictions on Activities of Moneta Representatives.
----------------------------------------------------
No Moneta Representative shall engage in any activity that would cause a
customer reasonably to believe that Moneta is engaged in the banking business
or that the Bank is engaged in the investment advisory, securities or
insurance business or that any Bank Marketing Product is FDIC insured.
3.6 Discipline. All Moneta Representatives shall be subject to
----------
discipline by Moneta and XX Xxxxxxxx and by various federal and state
regulatory authorities, securities exchanges, associations of securities
brokers and dealers and certain other entities having jurisdiction over the
operation of the Moneta Bank Marketing Program and the conduct of Moneta
Representatives. The Bank shall cooperate with Moneta and XX Xxxxxxxx in all
respects in connection with the enforcement of any sanctions imposed by Moneta
or XX Xxxxxxxx or by any such entities on any Moneta Representative. The Bank
has no obligation to Moneta or XX Xxxxxxxx to monitor the compliance of Moneta
Representatives with respect to applicable securities laws, rules or
regulations.
4. BANK EMPLOYEES.
--------------
4.1 Support Services. The Bank shall provide reception,
----------------
secretarial and support services for the Moneta Bank Marketing Program
satisfactory to Moneta through Bank
5
24
employees. The Bank and Moneta shall agree from time to time on the level of
support services necessary to support the Moneta Bank Marketing Program.
4.2 Limited Activities. Employees of the Bank ("Bank
------------------
Employees") may distribute literature regarding the Moneta Bank Marketing
Program and Bank Marketing Products, refer persons to representatives of
Moneta and provide certain other limited types of assistance of a clerical or
ministerial nature (such as filling literature racks or making customer
appointments) but may not engage in any investment advisory, securities
brokerage or insurance agent activities on behalf of Moneta. Bank Employees
shall not recommend any security or insurance product, give any form of advice
or discuss the merits of any security or insurance product with a customer.
The Bank shall monitor the activities of, and cause compliance by, Bank
Employees with the Compliance Manual and shall report to Moneta any known or
suspected violations of the Compliance Manual in a manner calculated to give
Moneta immediate notice of such suspected violation.
4.3 Training. The Bank shall train Bank Employees regarding
--------
standards of conduct and permissible activities in connection with the Moneta
Bank Marketing Program.
5. CONFIDENTIALITY.
---------------
5.1 "Customer Information" Defined. The Bank, to the fullest
------------------------------
extent permitted under applicable law, shall provide to Moneta information,
excluding confidential and privileged financial information, concerning the
then-existing customers of the Bank ("Customer Information").
5.2 Protection of Customer Information. Moneta recognizes the
----------------------------------
proprietary and confidential nature of the Customer Information and will
utilize the Customer Information only in accordance with, or as required to
carry out the provisions of, this Agreement.
5.3 Obligations of Moneta. The obligations of Moneta to the
---------------------
Bank with respect to the Customer Information shall include (but not be
limited to) the following:
5.3.1 To obey any and all instructions of the Bank with
respect to the Customer Information, and to exercise due care, skill and
diligence in carrying out those instructions; and
5.3.2 Upon request, and after reasonable notice, to
disclose to the Bank all material facts concerning use of the Customer
Information by Moneta.
6. SEPARATION OF BUSINESSES. The Bank shall maintain total
------------------------
separation of its business from the business of Moneta, including separation
of records, and shall conduct its business at all times so as not to lead to
confusion between the Bank's business and the businesses conducted by Xxxxxx.
0
00
0. XXXXXX. The supervisory personnel of the Bank, of Moneta and of
------
XX Xxxxxxxx, as well as representatives of state and federal banking,
securities and insurance regulatory authorities, the NASD and any other entity
having jurisdiction over the operation of Moneta and the conduct of Moneta
Representatives shall have unimpeded access during Moneta's business hours to
the client accounts and records maintained in connection with the operation of
the Moneta Bank Marketing Program which are required to be maintained pursuant
to banking, securities and insurance laws and regulations.
8. BANK COSTS AND EXPENSES. The Bank shall be directly
-----------------------
responsible for the costs and expenses associated with the following items in
connection with the operation of the Program: (i) salary and benefits for Bank
Employees; (ii) production and printing of signs regarding the Bank Marketing
Products in the Bank; and (iii) advertising and promotional materials
regarding the Bank Marketing Products which are approved by the Bank; (iv)
outside counsel's fees if such counsel is consulted to analyze federal and
state banking laws regarding this Agreement.
9. ADVERTISING AND PROMOTION.
-------------------------
9.1 Responsibility. The Bank shall be responsible for the
--------------
promotion of the Moneta Bank Marketing Program and Bank Marketing Products.
Moneta shall advise and assist the Bank in the promotion of the Moneta Bank
Marketing Program. From time to time, solely in their discretion, Moneta may
promote the Moneta Bank Marketing Program and Bank Marketing Products.
Nothing herein obligates Moneta or the Bank to conduct any media advertising.
9.2 Preparation. Advertising, direct mail, Moneta marketing
-----------
material and other publicity regarding the Moneta Bank Marketing Program and
Bank Marketing Products shall be prepared by Moneta, XX Xxxxxxxx or by the
Bank with the advice and assistance of Moneta or XX Xxxxxxxx, or, in the case
of material relating to a specific Bank Marketing Product, by the issuer
thereof. Moneta, XX Xxxxxxxx, or the issuer, as the case may be, shall be
responsible for ensuring that all materials conform to applicable federal and
state securities laws and regulations. Moneta may use the name of the Bank
and/or its affiliates only to identify the locations where information
regarding the Moneta Bank Marketing Program or Bank Marketing Products may be
obtained. All advertising and promotional materials shall make it clear that
the Bank is not a registered investment adviser or broker/dealer, that the
customer will be dealing solely with Moneta, that Moneta is not affiliated
with the Bank or its affiliates and that the Bank Marketing Products offered
are not federally insured or obligations of the bank.
9.3 Costs. All costs incurred in connection with the
-----
preparation, printing, and distribution of advertising and promotional
materials, including (but not limited to) direct mail, lobby posters,
solicitation cards, material distributed at seminars and public relations
material, regarding the promotion of the Moneta Bank Marketing Program,
whether initially proposed by the Bank or Moneta, shall be paid for solely by
the Bank (except as otherwise provided in
7
26
Section 2). The Bank shall have sole discretion as to whether to incur these
---------
costs. The Bank is not obligated to pay any cost or expense unless an
authorized officer of the Bank has given prior written approval of the cost.
10. MONETA AND XX XXXXXXXX SERVICE MARKS. The Bank acknowledges that
------------------------------------
Moneta and XX Xxxxxxxx are the owners of the Moneta and XX Xxxxxxxx service
marks, respectively, and all derivatives thereof. The Bank is not granted a
license or right to use the Moneta or XX Xxxxxxxx service marks in any manner
without the prior written consent of Moneta or XX Xxxxxxxx, as the case may be,
and any use by the Bank of the Moneta or XX Xxxxxxxx service marks pursuant to
a written consent shall comply in all respects with the terms of that written
consent.
11. COMPENSATION TO BANK.
--------------------
11.1 Advisory Fee Payments. Moneta shall pay to the Bank 30%
---------------------
of its advisory fee for each client account which is attributable to the
operation of the Moneta Bank Marketing Program in accordance with Schedule 11.1
-------------
attached hereto and made a part hereof.
11.2 Commission Payments. XX Xxxxxxxx shall make payments to the
-------------------
Bank with respect to all securities transactions which are attributable to the
operation of the Moneta Bank Marketing Program in accordance with Schedule 11.2
-------------
attached hereto and made a part hereof. Commission Payments shall be made to
the Bank twice a month in accordance with Schedule 11.2 (Commission Schedule).
-------------
Each Commission Payment shall be accompanied by a record of transactions.
12. REPRESENTATIONS AND WARRANTIES OF MONETA. Moneta and WS
----------------------------------------
Xxxxxxxx represent, warrant and agree that:
12.1 Moneta is duly registered with the SEC, and has complied
with any applicable state securities notification laws and XX Xxxxxxxx is duly
registered with the SEC, the NASD and applicable state securities regulatory
bodies;
12.2 Moneta Representatives are duly licensed with applicable
state insurance regulatory bodies:
12.3 Moneta, XX Xxxxxxxx and Moneta Representatives have all
requisite authority, in conformity with applicable laws and regulations, to
enter into and perform this Agreement; and
12.4 Moneta and XX Xxxxxxxx shall conduct their activities in
conformity with the Compliance Manual and all applicable laws, regulations,
and rules.
8
27
13. REPRESENTATION AND WARRANTIES OF THE BANK. The Bank represents,
-----------------------------------------
warrants and agrees that:
13.1 The Bank has all requisite authority, in conformity with
applicable laws and regulations, to enter into this Agreement, to recommend
the services of Moneta and to provide the services required of it under this
Agreement;
13.2 All records of Moneta that by law or regulation must be
maintained on the premises of the Bank and/or its affiliates shall be
maintained by the Bank in accordance with the instructions of Moneta; and
13.3 The Bank shall conduct its activities in connection with the
Moneta Bank Marketing Program in accordance with the Compliance Manual and all
applicable laws, regulations, and rules.
14. INDEMNIFICATION.
---------------
14.1 By Moneta. Moneta shall defend, reimburse, indemnify and
---------
hold harmless the Bank, its affiliates, officers, directors, employees and
agents against any and all losses, claims, damages, liabilities, actions,
costs or expenses, joint or several, to which any indemnified party may become
subject (including any legal or other expenses reasonably incurred by it in
connection with investigating any claim against it and any amounts paid in
settlement or compromise, provided Moneta shall have given its prior written
approval of such settlement or compromise), insofar as such losses, claims,
damages, liabilities, actions, costs or expenses arise in connection with or
are based upon: (i) the breach by Moneta of any representation, warranty or
covenant made by Moneta herein; (ii) any act or omission to act, whether
negligent, reckless or intentional, by Moneta or any Moneta Representative
under this Agreement; (iii) the failure of Moneta to comply with securities
and other laws, rules and regulations applicable to the Bank Marketing
Products; or (iv) the failure of Moneta or to comply with insurance and other
laws, rules and regulations applicable to the Moneta Bank Marketing Program.
14.2 By Bank. The Bank shall defend, reimburse, indemnify and
-------
hold harmless Moneta, XX Xxxxxxxx and their affiliates, officers, directors,
employees and agents against any and all losses, claims, damages, liabilities,
actions, costs or expenses, joint or several, to which any indemnified party
may become subject (including any legal or other expenses reasonably incurred
by it in connection with investigating any claim against it and any amounts
paid in settlement or compromise, provided the Bank shall have given its prior
written approval of such settlement or compromise), insofar as such losses,
claims, damages, liabilities, actions, costs or expenses arise in connection
with or are based upon: (i) the breach by the Bank of any representation,
warranty or covenant made by the Bank herein; (ii) any act or omission to act,
whether negligent, reckless or intentional, by the Bank or its affiliates to
obtain the approval of Moneta for advertising and promotional material which
mention the Bank Marketing Products or Bank Marketing Products marketed by
Moneta; (iv) the failure of the Bank or its affiliates to
9
28
comply with the Compliance Manual; or (v) the failure of the Bank or its
affiliates to comply with all banking laws, rules and regulations applicable to
the Bank Marketing Products.
14.3 Notice of Indemnification. In the event any legal
-------------------------
proceeding is threatened or instituted or any claim or demand is asserted by
any person for which payment may be sought by one party hereto from the other
party under the provisions of Section 14, the party seeking indemnification
----------
(the "Indemnitee") will promptly cause written notice of the assertion of any
such claim of which it has knowledge to be forwarded to the other party (the
"Indemnitor"). Any notice of a claim will state specifically the
representation, warranty or covenant with respect to which the claim is made
(if applicable), the facts giving rise to an alleged basis for the claim and
the amount of the liability asserted against the Indemnitor by reason of the
claim.
14.4 Indemnification Procedure for Third-Party Claims. In the
------------------------------------------------
event of the initiation of any legal proceeding against an Indemnitee by a
third party, the Indemnitor will have the absolute right after the receipt of
notice, at its option and at its own expense, to be represented by counsel of
its choice, and to defend against, negotiate, settle or otherwise deal with
any proceeding, claim or demand which relates to any loss, liability or damage
indemnified against hereunder; provided, however, that the Indemnitee may
participate in any such proceeding, with counsel of its choice and at its
expense. The parties hereto agree to cooperate fully with each other in
connection with the defense, negotiation or settlement of any such legal
proceeding, claim or demand. To the extent the Indemnitor elects not to
defend such proceeding, claim or demand, and the Indemnitee defends against or
otherwise deals with any such proceeding, claim or demand, the Indemnitee may
retain counsel, at the Indemnitor's expense, and control the defense of such
proceeding. Neither the Indemnitor nor the Indemnitee may settle any such
proceeding without the consent of the other party, such consent not to be
unreasonably withheld. After any final judgment or award has been rendered by
a court, arbitration board or administrative agency of competent jurisdiction
and the time in which to appeal therefrom has expired, or a settlement has
been consummated, or the Indemnitee and the Indemnitor have arrived at a
mutually binding agreement with respect to each separate matter alleged to be
indemnified by the Indemnitor hereunder, the Indemnitee will forward to the
Indemnitor notice of any sums due and owing by it with respect to such matter
and the Indemnitor will pay all of the sums so owing to the Indemnitee by wire
transfer, certified or bank cashier's check within thirty (30) days after the
date of such notice.
15. TERM AND TERMINATION.
--------------------
15.1 Term. This Agreement shall be for a term of five years
----
commencing on the date hereof and expiring on October 31, 2002; provided,
however, that:
(a) The expiration of this Agreement at the end of the term or
otherwise shall not terminate the indemnification and hold
harmless obligations and covenants of the parties as set forth
herein.
10
29
(b) The expiration of this Agreement at the end of the term or
otherwise, except in the case of termination for cause as set
forth below in Section 15.2, shall not terminate the obligations
of Moneta and XX Xxxxxxxx to pay to the Bank the advisory fee
payments and commission payments as set forth herein in Sections
11.1 and 11.2, respectively.
(c) This Agreement may be terminated prior to the expiration of its
term (i) upon the mutual agreement of the Bank and Moneta, (ii) at
the election of any party in the event that Enterbank Holdings,
Inc. ("Holdings") or the Bank shall have been subject to an
Extraordinary Event, as hereinafter defined, (iii) in the event of
a default or breach of this Agreement by Moneta, this Agreement
may be terminated at the written election of the Bank unless such
default or breach is curable and shall have been cured by Moneta
within 30 days of its occurrence, and (iv) in the event of a
default or breach of this Agreement by Bank or of the Customer
Referral Agreement by Bank or Holdings, this Agreement may be
terminated at the written election of Moneta unless such default
or breach is curable and shall have been cured by Holdings or
Bank, as the case may be, within 30 days of its occurrence. An
election of a party to terminate this Agreement in accordance with
clause (iii) or clause (iv) above shall not relieve the defaulting
or breaching party from liability to a non-defaulting party for
loss or damage suffered as a result of such default, nor shall it
relieve Moneta or X.X. Xxxxxxxx from its obligation to pay to the
Bank the advisory fee payments and commission payments as required
in Sections 11.1 and 11.2, respectively. In addition to the
foregoing, the Bank shall have the right to terminate this
Agreement (a) in the event of any enforcement action or proceeding
instituted against Moneta under the Investment Advisers Act of
1940 which, in the reasonable judgment of the Bank adversely
affects the reputation or integrity of Moneta or jeopardizes
regulatory licenses held by Moneta or (b) in the event that the
business and operations of Moneta shall be acquired (whether by
merger, sale of assets or sale of stock) or a change of control of
Moneta shall occur.
(d) For purposes of this Agreement, an Extraordinary Event relating to
Holdings or the Bank shall be deemed to involved:
(i) any merger or consolidation involving Holdings other than a
merger or consolidation in which the outstanding capital
stock of Holdings immediately prior to the effectiveness of
such merger or consolidation is converted into (or remains
outstanding and constitutes) a majority of the voting common
stock of the surviving or resulting entity; or
11
30
(ii) any transaction pursuant to which a majority of the
outstanding capital stock of either Holdings or of the Bank
is acquired by a person or group pursuant to a tender offer
or plan of acquisition or reorganization.
15.2 Termination for Cause.
---------------------
15.2.1 By Moneta or XX Xxxxxxxx. Moneta or XX Xxxxxxxx may
------------------------
terminate this Agreement immediately upon the occurrence of any action (other
than reporting possible violations of securities or insurance laws to the
appropriate authorities) by the Bank or its affiliates in connection with the
Bank Marketing Products which would entitle the SEC, the NASD, a state
securities regulatory body, a state insurance commission, any other regulatory
agency or any court to impose administrative or regulatory sanctions or
penalties against Moneta or the Bank or any affiliate of any of the foregoing.
This Agreement shall be deemed terminated immediately upon the occurrence of
any event described in Schedule 15.2.1 hereto. In the event of termination of
---------------
this Agreement pursuant to this section, all obligations of Moneta and XX
Xxxxxxxx to pay fees and commissions hereunder shall immediately terminate.
15.2.2 By Bank. The Bank may terminate this Agreement
-------
immediately without notice upon the occurrence of any action by Moneta or XX
Xxxxxxxx that would entitle the SEC, the NASD, a state securities regulatory
body, a state insurance commission, any other regulatory agency or any Court
to impose administrative or regulatory sanctions or penalties against the
Bank, Moneta or any affiliate of any of the foregoing.
16. NOTICES. Any notice required or permitted under this Agreement
-------
shall be in writing, and either hand delivered mailed by certified mail,
return receipt requested, to the following addresses:
Moneta Group Investment Advisors, Inc.:
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
X.X. Xxxxxxxx & Co., Inc.:
Mail Stop G
X.X. Xxx 0000
Xxxxxxxx, XX 00000-0000
Attn: Xxxxxx Xxxxxx, Esq.
Enterprise Bank:
000 X. Xxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxx
12
31
Notice shall be deemed given on the date of receipt, in the case of hand
delivery, or on the date delivered, as shown on the U.S. Postal Service return
receipt, in the case of mailing. Any party may change the address to which
notice is to be delivered to it under this Agreement by giving notice to that
effect to the other parties hereto in the manner provided in this Section.
17. AMENDMENT AND BINDING NATURE OF AGREEMENT; ASSIGNMENT.
-----------------------------------------------------
Except as otherwise provided herein, this Agreement may be amended, modified
or supplemented only by a writing signed by all parties hereto. This
Agreement shall be binding upon all successors and assigns of the parties.
This Agreement shall not be assignable by Moneta or the Bank, except that the
Bank shall have the right to assign, or direct the payment of, to another
person or entity any payment required to be made to it pursuant to this
Agreement.
18. NO AGENCY. Neither this Agreement nor any operation hereunder is
---------
intended to be, shall be deemed to be, or shall be treated as a general or
limited partnership or a joint venture or as creating an agency relationship
between and the Bank and/or their affiliates.
19. CONTROLLING LAW. Except regarding matters controlled by
---------------
federal law, this Agreement shall be governed by and construed in accordance
with the laws of the State of Missouri.
20. HEADINGS. The headings preceding the text hereof have been
--------
inserted for convenience and reference only and shall not be construed to
affect the meaning, construction or effect of this Agreement.
21. SEVERABILITY. If any term, provision or condition of this
------------
Agreement is held to be invalid, unenforceable or illegal by any court,
regulatory agency or self-regulatory body, such invalidity, unenforceability
or illegality shall attach only to that term, provision or condition, and the
validity and enforceability of the remaining portions of this Agreement shall
not be affected.
22. WAIVER. The failure by any party to exercise any right, power,
------
remedy or privilege contained herein, or existing under controlling law, nor
or hereafter in effect, shall not be construed to be a waiver of that right,
power, remedy or privilege or to preclude further exercise thereof.
23. DISPUTE RESOLUTION. Disputes shall be resolved by the Joint
------------------
Relationship Committee as established in the Customer Referral Agreement dated
October 31, 1997 by and among Moneta, Bank and Holdings, which Committee shall
initially consist of Xxxxx Xxxxxx and
13
32
one other representative designated by Moneta and of Xxxx Xxxxx and one other
representative designated by the Bank. Either Moneta or the Bank shall have the
right, from time to time, to change its representation on the Joint
Relationship Committee by written notice. The Joint Relationship Committee
shall have access to such customer records and account information as it shall
deem reasonably necessary in order to determine in good faith whether a
particular account should be designated as a "Bank Referral Account" and each
of Moneta and Bank agree to provide such information upon request. Each member
of the Committee, by serving thereon, agrees to maintain the confidentiality of
information concerning the account of customers of the other party confidential
except as may be required under this Agreement.
In the event that the Joint Relationship Committee shall be divided and
in dispute as to any matter and unable to resolve such dispute internally,
such dispute shall be resolved by means of an "abbreviated arbitration"
whereby Moneta and the Bank shall agree upon a single person to be designated
as arbitrator and the decision of such arbitrator shall be final; provided,
however, that in the event that Moneta and Bank are unable to agree on a
single arbitrator to resolve such dispute, each of Moneta and Bank shall
appoint one arbitrator and the arbitrators so selected shall appoint a third
arbitrator who will serve as chairman of the panel. Any such arbitration
shall be conducted in accordance with the rules of the American Arbitration
Association unless otherwise then agreed by the parties.
24. FIDUCIARY OBLIGATION. This Agreement creates no fiduciary
--------------------
obligation or responsibilities between the parties or between the Bank and any
third parties purchasing products under the Moneta Bank Marketing Program.
25. SURVIVABILITY. The obligations of the parties under Sections
-------------
5.2, 10, 14 and 23 shall survive the termination of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed on its behalf as of the date first above written.
MONETA GROUP INVESTMENT
ADVISORS, INC.
ATTEST:
By: (SEAL)
------------------------------------ -------------------------------
Secretary
X.X. XXXXXXXX & CO., INC.
ATTEST:
By: (SEAL)
------------------------------------ -------------------------------
Secretary
ENTERPRISE BANK
ATTEST:
By: (SEAL)
------------------------------------ -------------------------------
Secretary
14
33
Schedule 1.2.1
--------------
1. Neither the Bank nor any Bank Employee who will solicit Bank customers
on behalf of Moneta pursuant to this Agreement is subject to an order of
the Securities and Exchange Commission ("SEC") as a result of its
determination that the Bank or the Bank Employee:
A. Willfully made or caused to be made in any registration
application or report required to be filed with the SEC pursuant
to the Advisers Act, or in any proceeding before the SEC with
respect to registration, a statement which was false or misleading
to a material fact, or omitted to state in any such application or
report any material fact required to be stated therein; or
B. Willfully violated any provision of the Securities Act of 1933,
the Securities Exchange Act of 1934, the Investment Company Act of
1940, the Advisers, the Commodity Exchange Act, or the rules or
regulations under any of the above, or any rule of the Municipal
Securities Rulemaking Board, or are unable to comply with any such
provision; or
C. Willfully aided, abetted, counseled, commanded, induced or
procured the violation of any of the provisions, rules and
regulations set forth in (b) above, or has failed reasonably to
supervise, with a view to preventing violations of the above
provisions, rules and regulations, another person who commits such
a violation and was subject to his supervision.
2. Neither the Bank nor any Bank Employee has within the previous ten (10)
years been convicted of any felony or misdemeanor involving:
A. (i) the purchase or sale of a security
(ii) the taking of a false oath
(iii) the making of a false report
(iv) bribery
(v) perjury
(vi) burglary
(vii) conspiracy to commit any of (i)-(vi) above
B. The conduct of the business of a broker, dealer, municipal
securities dealer, investment adviser, bank, insurance company,
governmental securities broker, government securities dealer,
fiduciary, transfer agent, or entity or person required to be
registered under the Commodity Exchange Act.
15
34
C. Larceny, theft, robbery, extortion, forgery, counterfeiting,
fraudulent concealment, embezzlement, fraudulent conversion, or
misappropriation of funds or securities.
D. The violation of:
18 U.S.C. Sec.152 (Concealment of assets; false oaths and claims;
bribery)
18 U.S.C. Sec.1341 (Frauds and swindles)
18 U.S.C. Sec.1342 (Fictitious name or address)
18 U.S.C. Sec.1343 (Fraud by wire, radio, or television)
18 U.S.C. Sections 471-509 (Counterfeiting and Forgery)
18 U.S.C. Sections 1001-1027 (Fraud and False Statements)
3. Neither the Bank nor any Bank Employee has been found by the SEC to have
engaged, or have been convicted of engaging in the conduct described in
Question 1(A)-(C) above.
4. Neither the Bank nor any Bank Employee is subject to a permanent or
temporary injunction prohibiting him from acting as an investment
adviser, underwriter, broker, dealer, municipal securities dealer,
government securities broker, government securities dealer, transfer
agent, or entity or person required to be registered under the Commodity
Exchange Act, or as an affiliated person or employee of any investment
company, bank, insurance company, or entity or person required to be
registered under the Commodity Exchange Act, or from engaging in or
continuing any conduct or practice in connection with any such activity,
or in connection with the purchase or sale of any security.
5. Neither the Bank nor any Bank Employee has been subject to an SEC order,
judgment or decree barring or suspending their right to be associated
with an investment adviser.
16
35
Schedule 1.2.3
--------------
SOLICITOR'S DISCLOSURE STATEMENT PURSUANT TO
RULE 206(4)-3 OF THE INVESTMENT ADVISER'S ACT OF 1940
The undersigned hereby acknowledges disclosure of the following information in
connection with the opening of an advisory account with Moneta Group
Investment Advisors, Inc. ("Moneta"):
1. Name, address and phone number of investment advisor:
Moneta Group Investment Advisors, Inc.
000 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
(000) 000-0000
2. Name, address and contact person of solicitor:
Enterprise Bank
000 X. Xxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: ------------------------------
3. The above-named solicitor and its employees and agents refer advisory
clients to Moneta for investment advisory services. Neither the
solicitor nor its employees or agents will render any investment
advisory services to the clients referred by it to Moneta nor will they
receive any compensation from Moneta for such referrals other than that
disclosed herein. All questions with respect to Moneta's services and
the client's advisory account with Moneta should be directed to Moneta.
17
36
4. The solicitor, its employees and agents will receive 30% of the fees
paid by the advisory client to Moneta. The advisory fees charged by
Moneta are described more particularly in its brochure, provided
herewith, and such fees do not differ between referred and unreferred
accounts.
5. Moneta representatives may, from time to time, refer their advisory
clients to Enterprise Bank for the purpose of establishing money market
accounts, making deposits or requesting loans. In return, Moneta
representatives will receive options to purchase stock in EnterBank
Holdings, Inc., the parent company of the solicitor, as more fully
described in Moneta's Brochure. Certain Moneta principals own
approximately 4.5% of the outstanding shares of EnterBank Holdings, Inc.
6. The solicitor, its employees and agents hereby provide you with certain
informative materials, including a current copy of Moneta's Brochure
pursuant to Rule 206(4)-3 of the Investment Adviser's Act of 1940.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THIS DISCLOSURE STATEMENT
AND A CURRENT COPY OF MONETA'S BROCHURE.
Dated: ----------------------------------------
--------------------------- Signature
----------------------------------------
Print Name
----------------------------------------
Address
18
37
Schedule 11.1
-------------
With respect to fees for solicitation to persons to become advisory
clients of Moneta, the Bank shall receive thirty percent (30%) of the fees
received from the clients solicited by the Bank.
The fees owed to the Bank will be paid by the 15th day of the month
following the month the client's fee is received by Moneta. The obligation of
Moneta to pay fees to the Bank hereunder shall terminate upon the termination
of the client's investment advisory relationship with Moneta, and the Bank
agrees to refund to Moneta any fees received that relate to a refund of
investment advisory fees to the client.
19
38
Schedule 11.2
-------------
XX Xxxxxxxx shall pay to the Bank thirty (30%) of: (i) Gross Dealer
Commissions received or retained by XX Xxxxxxxx with respect to trades of
securities (excluding securities which are insurance and securities of the
Bank or any affiliate of the Bank) initiated by Bank customers as a result of
the Moneta Bank Marketing Program; and (ii) fees received or retained by XX
Xxxxxxxx with respect to referrals made by the Bank to XX Xxxxxxxx, Moneta and
their affiliates. "Commissions" means, with respect to shares of mutual
funds, the amount reallowable to dealers as shown in the current prospectuses
of such mutual funds pursuant to Item 7(b)(iv) of Form N-1A under the
Investment Company Act of 1940 (the "1940 Act"), plus all amounts received by
from the principal underwriter (as that term is defined under the 0000 Xxx) of
such mutual funds pursuant to Rule 12b-1 under the 1940 Act, and, with respect
to other securities, all commissions, discounts, and other sales compensation.
Gross Dealer Commissions means "net" gross dealer commissions (Gross Dealer
Commissions less clearing fees) for those securities traded through a clearing
firm.
XX Xxxxxxxx shall have the right to cancel transactions when XX Xxxxxxxx
believes there is a valid business purpose for doing so. If transactions are
canceled after XX Xxxxxxxx has paid monthly Program Payments with respect to
Commissions earned on the canceled transactions, XX Xxxxxxxx either may deduct
100% of the canceled Gross Dealer Commission from the Program Payment owed to
the Bank for the next Program Payment period, or may request, in writing, that
the Bank pay 100% of the canceled Gross Dealer Commission within five (5) days
of such written request.
20
39
FORM OF STOCK OPTION AGREEMENT
pursuant to Customer Referral Agreement dated as of October 31, 1997
by and among
Enterprise Bank, Enterbank Holdings, Inc. and
Moneta Group Investment Advisers, Inc.
Date of Grant:-------------
Number of Shares:----------
Price per Share:------------
This Agreement is made and entered as of the -- day of ------, ----, (the
"Date of Grant") by and between Enterbank Holdings, Inc. (the "Company"), a
Delaware corporation, and ------------- ("Optionee") in accordance with the
provisions of that certain Customer Referral Agreement dated as of October 31,
1997, by and among the Company, its subsidiary, Enterprise Bank, and Moneta
Group Investment Advisers, Inc.
1. Grant of Option.
Subject to the terms and conditions hereinafter set forth, the Company hereby
grants to the Optionee as of the Date of Grant, the right and option to
purchase up to ----- shares of the Common Stock, par value $.01 per share, of
the Company, at a price of $ ---- per Share. Such option is hereinafter
referred to as the "Option" and the shares of stock purchasable upon exercise
of the Option are hereinafter sometimes referred to as the "Option Shares."
2. Installment Exercise.
(a) Subject to such further limitations and conditions as are provided
herein, the Option shall vest and become exercisable in five equal annual
installments commencing on the first anniversary of the Date of Grant and the
Optionee shall have the right hereunder to exercise each installment by
purchasing, in whole or in part, the Option Shares to which such installment
relates at any time on or after the date upon which it first becomes
exercisable and prior to the time at which such Option expires. Option Shares
which are not currently purchasable as a result of such installment vesting
are sometimes hereinafter referred to as "Non-Vested Shares."
(b) Notwithstanding the foregoing, the Option shall become immediately
exercisable in full, to the extent to which not theretofore exercised, upon
the occurrence of one or more of the following events:
(i) the death of the Optionee; or
(ii) the permanent physical disability of the Optionee; or
40
(iii) the occurrence of an Extraordinary Event, as hereinafter defined,
with respect to the Company.
3. Termination and Expiration of Option.
(a) The Option and all rights hereunder with respect thereto, to the extent
that such rights shall not have theretofore been exercised, shall expire and
become null and void as of the close of business on the business day
immediately preceding the tenth anniversary of the Date of Grant (the
"Expiration Date").
(b) In the event that the Optionee shall cease to be an employee of Moneta
Group Investment Advisers, Inc. (or a subsidiary or affiliate of Moneta Group
Investment Advisers, Inc., hereinafter collectively "Moneta Group"), other
than as a result of death or permanent disability, then
(i) vesting of the right to any Non-Vested Shares as of the date
upon which such employment shall cease shall terminate and the
Option shall immediately lapse and expire as to such Non-Vested
Shares; and
(ii) the Expiration Date with respect to Option Shares
exercisable as of the date upon which such employment shall cease
shall be the close of business on the last business day preceding
the ninety-first (91st) calendar day following the date upon which
such employment shall cease.
(c) In the event of the death or permanent disability of the Optionee, the
Expiration Date shall be the earlier of
(i) the close of business on the last business day immediately
preceding the tenth anniversary of the Date of Grant, or
(ii) the close of business on the last business day immediately
preceding the first anniversary of the date of death or, if
sooner, the first anniversary of the date upon which employment of
the Optionee by the Moneta Group was terminated due to permanent
disability.
(d) In the event that the Customer Referral Agreement is terminated (other
than by reason of expiration at the end of its stated term),
(i) any Non-Vested Shares as of the date of such termination
shall not thereafter become vested or exercisable by the Optionee;
and
(ii) the Expiration Date with respect to Option Shares
exercisable as of the date of
41
such termination shall be the close of business on the last
business day preceding the ninety-first (91st) calendar day
following the date of such termination.
(e) Notwithstanding any other provisions set forth herein, if the Optionee
shall
(i) commit any act of malfeasance or wrongdoing affecting the
Moneta Group or the Company or any subsidiary of the Company,
(ii) breach any employment contract with, or covenant not to
compete with, the Moneta Group, or
(iii) engage in conduct that would warrant the Optionee's
discharge for cause by the Moneta Group,
any unexercised portion of the Option, whether or not then vested or
exercisable, shall immediately terminate and be forfeited.
4. Exercise of the Option.
(a) The Optionee may exercise the Option with respect to all or any part of
the number of Option Shares then exercisable hereunder by giving the Secretary
of the Company written notice of intent to exercise. The notice of exercise
shall specify the number of Option Shares as to which the Option is to be
exercised and the date of exercise thereof, which date shall be at least five
business days after the giving of such notice unless an earlier time shall
have been mutually agreed upon.
(b) Full payment by the Optionee of the option price for the Option Shares
purchased shall be made on or before the exercise date specified in the notice
of exercise in cash or, in whole or in part, through the surrender of
previously acquired shares of the common stock of the Company valued at their
fair market value on the exercise date.
On the exercise date specified in the Optionee's notice or as soon thereafter
as practicable, the Company shall cause to be delivered to the Optionee a
certificate or certificates for the Option Shares then being purchased (out of
theretofore unissued stock or reacquired stock as the Company may elect) upon
full payment for such Option Shares. The obligation of the Company to deliver
Stock shall, however, be subject to the following conditions:
(1) if the Company shall determine that the listing, registration or
qualification of the Option or the Option Shares upon any securities
exchange or under any state or federal law, or the consent or approval
of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the Option or the issuance or
purchase of Stock thereunder, the Option may not be exercised in whole
or in part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Company;
42
(2) to the extent that the Company shall be willing to rely upon any
exemption from registration, qualification, consent or approval in
connection with the Option or the issuance or purchase of the stock
thereunder,
(A) Optionee shall provide to the Company such written
representations or warranties as may be necessary to induce or
otherwise permit the Company to so rely, and
(B) the Company may impose, and Optionee shall consent to the
imposition of, any stop transfer order and restrictive legends
limiting the sale, transfer or assignment of the Stock being
acquired by the Optionee; and
(C) if the Company shall be required to collect and remit any
federal or state income tax in connection with the exercise of the
Option, the Option shall not be exercised unless Optionee tenders
to the Company in cash the funds so required to be collected and
remitted.
(c) If the Optionee fails to pay for any of the Option Shares specified in a
notice of exercise or fails to accept delivery thereof, the Optionee's right
to purchase such Option Shares may be terminated by the Company in its sole
discretion.
5. Adjustment of and Changes in Stock of the Company.
In the event of a reorganization, recapitalization, change of shares, stock
split, spin-off, stock dividend, reclassification, subdivision or combination
of shares, merger, consolidation, rights offering, or any other change in the
corporate structure or shares of capital stock of the Company, the Company
shall make such equitable adjustment as it deems appropriate in the number and
kind of shares of Stock subject to the Option or in the option price or both;
provided, however, that no such adjustment shall give the Optionee any
additional benefits under the Option.
6. Fair Market Value
As used herein, the "fair market value" of a share of Stock shall be equal to
the Market Value Per Share of the Company's common stock determined as
follows:
((1) if the common stock of the Company is traded on a national securities
exchange registered under the Securities Exchange Act of 1934 or if
quotations for such stock are carried in the Nasdaq over-the-counter
market maintained by the National Association of Securities Dealers,
Inc., then the Market Value Per Share of the Company's common stock
shall be equal to the reported closing price per share of such stock as
of the date of grant to be reflected in the Option;
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(2) if the common stock of the Company is not traded as provided in (1)
above, the Market Value Per Share shall be based upon the weighted
average of the prices paid per share for such common stock in
arm's-length transactions not involving the Company or any director or
executive officer of the Company reflected in respect of blocks of 500
shares or more occurring within the 90 days preceding the date of grant
to be reflected in the Option; or
(3) if the common stock of the Company is not traded as provided in (1)
above and there are fewer than three transactions available to determine
the price in (2) above, then the Market Value Per Share shall be
determined in good faith by the Board of Directors of the Company in
consultation with the firm of X. X. Xxxxx & Co. or another broker-dealer
as may be agreed by the Company and the Moneta Group.
7. No Rights of Stockholders
Neither the Optionee nor any personal representative shall be, or shall
have any of the rights and privileges of, a stockholder of the Company
with respect to any shares of Stock purchasable or issuable upon
exercise of the Option, in whole or part, prior to the date of exercise
of the Option. Notwithstanding the foregoing, the Company agrees that
it will, upon the written request of the Optionee, provide to the
Optionee (i) copies of any reports or proxy statements filed by the
Company under the Securities Exchange Act of 1934, as amended, and (ii)
copies of reports or communications distributed by the Company to its
stockholders generally.
8. Non-Transferability of Option
During the Optionee's lifetime, the Option hereunder shall be
exercisable only by the Optionee or any guardian or legal representative
of the Optionee and the Option shall not be transferable except, in the
case of the death of Optionee, by will or the laws of descent and
distribution, nor shall the Option be subject to attachment, execution
or similar process. In the event of any attempt by Optionee to
alienate, assign, pledge, hypothecate or otherwise dispose of the
Option, except as provided for herein, or the levy of any attachment,
execution or similar process upon the rights or interest hereby
conferred, the Company may terminate the Option by notice to the
Optionee and the Option shall thereupon become null and void.
9. Extraordinary Event
As used in this agreement, an Extraordinary Event shall mean
(i) any merger or consolidation involving the Company other than
a merger or consolidation in which the outstanding capital stock
of the Company immediately
44
prior to the effectiveness of such merger or consolidation is
converted into (or remains outstanding and constitutes) a majority
of the voting common stock of the surviving or resulting entity; or
(ii) any transaction pursuant to which a majority of the
outstanding capital stock of either the Company or of Enterprise
Bank is acquired by a person or group pursuant to a tender offer
or plan of acquisition or reorganization.
Upon the occurrence of an Extraordinary Event pursuant to which the
outstanding capital stock of the Company is converted into cash or in
the case of an Extraordinary Event as defined in (ii) of the foregoing
definition, the Company or its successor shall have the right to elect
to terminate the Option by paying to the Optionee in full settlement of
the Optionee's rights hereunder an amount per theretofore unexercised
Option Share equal to the difference between the exercise price per
share provided in this Option and the cash amount per share paid with
respect to the outstanding shares of the Company's common stock.
10. Representations and Agreements of the Optionee
(a) The Optionee acknowledges that he has been advised by the
Company that neither this Option nor the offer and sale of the Option
Shares as contemplated hereby have been registered under the Securities
Act of 1933, as amended (the "Securities Act"), or comparable state
securities laws in reliance by the Company upon one or more exemptions
from the registration requirement. In connection therewith, the
Optionee represents to the Company that Optionee (is)(is not) [select
one at time of grant] an "accredited investor" as that term is defined
in Regulation D under the Securities Act. The Optionee further
acknowledges that he understands that the common stock of the Company is
not currently registered as a class of securities under the Securities
Exchange Act of 1934, as amended, and is not traded on a national
securities exchange or pursuant to the Nasdaq over the counter market;
and also that upon issuance of Option Shares pursuant to the exercise of
this Option, such shares are unlikely to be freely tradable unless and
except to the extent that the holding period and available public
information and other requirements of Rule 144 under the Securities Act
are met. Accordingly, the Optionee recognizes that upon any exercise of
this Option the shares so acquired will constitute an "illiquid"
investment.
(b) This agreement and the Option shall be subject to and
construed in accordance with the Customer Referral Agreement and any
conflict between the two agreements shall be resolved in favor of the
provisions of the Customer Referral Agreement.
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11. Amendment of Option
Except for adjustments in accordance with paragraph 5 which shall be
made in the sole discretion of the Company, this Option may not be
amended except by the mutual agreement of the Company and the Optionee.
12. Notice
Any request or notice to the Company provided for in this agreement
shall be addressed to it in care of its Secretary at its executive
offices at 000 Xxxxx Xxxxxxx, Xx. Xxxxx, Xxxxxxxx 00000. Any notice to
the Optionee shall be addressed to Optionee in care of Moneta Group
Investment Advisers, Inc., 000 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 000, Xx.
Xxxxx, Xxxxxxxx 00000. Any notice shall be deemed to be duly given if
and when properly addressed and posted by registered or certified mail,
postage prepaid.
13. Governing Law
The validity, construction, interpretation and effect of this agreement
shall exclusively be governed by and determined in accordance with the
law of the state of Missouri except to the extent preempted by federal
law, which shall to the extent govern.
IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement as of the Date of Grant written above.
ENTERBANK HOLDINGS, INC.
By
----------------------------- --------------------------------------
(Optionee) Duly Authorized
