<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
NETGURU, INC.
--------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
--------------------------------------------------------------------------------
(Title of Class of Securities)
64111K107
--------------------------------------------------------------------------------
(CUSIP Number)
John J. Pepin
1817 Riverdale
Germantown, TN 38138
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 14, 1998
--------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and
is filing this schedule because of ss. ss. 240.13d-l(e), 240.13d-l(f)
or 240.13d-l(g), check the following box. [ ]
NOTE: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See ss.
240.13d-7 for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class
of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of
the Act (however, see the Notes).
<PAGE> 2
CUSIP No. 64111K107
<TABLE>
<S> <C>
----------------------------------------------------------------------------------------------------------------------
1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
John J. Pepin
----------------------------------------------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a).......................................................................................... |X|
(b).......................................................................................... [ ]
----------------------------------------------------------------------------------------------------------------------
3. SEC Use Only............................................................................
----------------------------------------------------------------------------------------------------------------------
4. Source of Funds (See Instructions)..........PF, AF, OO..................................
----------------------------------------------------------------------------------------------------------------------
5. Check if Disclosure or Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e).....[ ]
----------------------------------------------------------------------------------------------------------------------
6. Citizenship or Place of Organization........United States...............................
----------------------------------------------------------------------------------------------------------------------
7. Sole Voting Power 103,500
Number of
Shares
Beneficially 8. Shared Voting Power 1,302,305
Owned by
Each
Reporting 9. Sole Dispositive Power 103,500
Person
With 10. Shared Dispositive Power 1,302,305
----------------------------------------------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person 1,405,805
----------------------------------------------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions).... [ ]
----------------------------------------------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 9.9%
----------------------------------------------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
John J. Pepin IN
----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
----------------------------------------------------------------------------------------------------------------------
1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
Jonathan Page
----------------------------------------------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a).......................................................................................... |X|
(b).......................................................................................... [ ]
----------------------------------------------------------------------------------------------------------------------
3. SEC Use Only............................................................................
----------------------------------------------------------------------------------------------------------------------
4. Source of Funds (See Instructions)..........PF, AF, OO..................................
----------------------------------------------------------------------------------------------------------------------
5. Check if Disclosure or Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)..... [ ]
----------------------------------------------------------------------------------------------------------------------
6. Citizenship or Place of Organization........United States...............................
----------------------------------------------------------------------------------------------------------------------
7. Sole Voting Power 86,500
Number of
Shares
Beneficially 8. Shared Voting Power 1,302,305
Owned by
Each
Reporting 9. Sole Dispositive Power 86,500
Person
With 10. Shared Dispositive Power 1,302,305
----------------------------------------------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person 1,388,805
----------------------------------------------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions).... [ ]
----------------------------------------------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 9.8%
----------------------------------------------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
Jonathan Page IN
----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
----------------------------------------------------------------------------------------------------------------------
1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
Pegasus Fund, L.P.
Tax ID No. 62-1604885
----------------------------------------------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a).......................................................................................... [X]
(b).......................................................................................... [ ]
----------------------------------------------------------------------------------------------------------------------
3. SEC Use Only............................................................................
----------------------------------------------------------------------------------------------------------------------
4. Source of Funds (See Instructions)..........OO..........................................
----------------------------------------------------------------------------------------------------------------------
5. Check if Disclosure or Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)..... [ ]
----------------------------------------------------------------------------------------------------------------------
6. Citizenship or Place of Organization........United States...............................
----------------------------------------------------------------------------------------------------------------------
7. Sole Voting Power 1,320,305
Number of
Shares
Beneficially 8. Shared Voting Power 0
Owned by
Each
Reporting 9. Sole Dispositive Power 1,320,305
Person
With 10. Shared Dispositive Power 0
----------------------------------------------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person 1,302,305
----------------------------------------------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions).... [ ]
----------------------------------------------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 9.2%
----------------------------------------------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
Pegasus Fund, L.P. PN
----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
----------------------------------------------------------------------------------------------------------------------
1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
Pegasus Management, LLC
Tax I.D. No. 62-1604883
----------------------------------------------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a)........................................................................................... [X]
(b)........................................................................................... [ ]
----------------------------------------------------------------------------------------------------------------------
3. SEC Use Only............................................................................
----------------------------------------------------------------------------------------------------------------------
4. Source of Funds (See Instructions)..........AF..........................................
----------------------------------------------------------------------------------------------------------------------
5. Check if Disclosure or Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e).....[ ]
----------------------------------------------------------------------------------------------------------------------
6. Citizenship or Place of Organization........United States...............................
----------------------------------------------------------------------------------------------------------------------
7. Sole Voting Power 0
Number of
Shares
Beneficially 8. Shared Voting Power 1,302,305
Owned by
Each
Reporting 9. Sole Dispositive Power 0
Person
With 10. Shared Dispositive Power 1,302,305
----------------------------------------------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person 1,302,305
----------------------------------------------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions).... [ ]
----------------------------------------------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 9.2%
----------------------------------------------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
Pegasus Management, LLC OO
----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 6
ITEM 1. SECURITY AND ISSUER
This statement on Schedule 13D relates to the common stock, par value $.01 per
share of netGuru, Inc., a Delaware corporation (the "Company"), whose principal
and executive office is located at 22700 Savi Ranch, Yorba Linda, CA.
ITEM 2. IDENTITY AND BACKGROUND
This statement on Schedule 13D is being filed by John J. Pepin ("Pepin") whose
address is 1817 Riverdale, Germantown, TN 38138. Pepin is a professor of
marketing for the University of Memphis, 3696 Southern Avenue, Memphis, TN
38111. Pepin is a citizen of the United States. In the last five (5) years Pepin
has not been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
This statement on Schedule 13D is being filed by Jonathan Page ("Page") whose
address is 4402 Tuckahoe Road, Memphis, TN 38117. Page is self-employed. Page is
a citizen of the United States. In the last five (5) years Page has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
This statement on Schedule 13D is being filed by the Pegasus Funds, L.P., a
Tennessee limited partnership ("Partnership"), whose address is 1817 Riverdale,
Germantown, TN 38138. The Partnership invests primarily in publicly traded
equity securities of U.S. companies. In the last five (5) years, the Partnership
has not been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
This statement on Schedule 13D is being filed by the Pegasus Management, LLC, a
Tennessee limited liability company ("LLC"), whose address is 1817 Riverdale,
Germantown, TN 38138. The LLC is the general partner of the Partnership. In the
last five (5) years, the LLC has not been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The Partnership used an aggregate of approximately $6,710,481 to purchase
securities reported as beneficially owned in Item 5 below. All of the securities
were purchased through a margin account established for the benefit of the
Partnership. All purchases of Company securities by the Partnership were open
market transactions.
<PAGE> 7
Additionally, Pepin used an aggregate of approximately $228,374 to purchase
securities reported as beneficially owned by him in Item 5 below. Pepin used
$99,869 of personal funds to purchase securities of the Company and $128,505 was
borrowed on a margin account to purchase additional securities of the Company.
All purchases of Company securities by Pepin were open market transactions.
Page used an aggregate of approximately $208,980 to purchase securities reported
as beneficially owned by him in Item 5 below. Page used $41,980 of personal
funds to purchase securities of the Company and $167,000 was borrowed on a
margin account to purchase additional securities of the Company. All purchases
of Company securities by Page were open market transactions.
ITEM 4. PURPOSE OF TRANSACTION
All reporting persons listed in Item 2 have acquired the common stock of the
Company for investment purposes only.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) As of November 15, 2000, the Partnership's aggregate beneficial
ownership of common stock of the Company was 1,302,305 shares, or 9.2%
of the number of shares outstanding. The LLC's aggregate beneficial
ownership was 1,302,305 shares, or 9.2% of the shares outstanding.
Pepin's aggregate beneficial ownership of common stock of the Company
was 1,405,805, or 9.9% of the shares outstanding. Page's aggregate
beneficial ownership of common stock of the Company was 1,388,805,
or 9.8% of the shares outstanding.
(b) The Partnership has the sole voting and disposition power with respect
to 1,302,305 shares of the Company. As managing partner of the
Partnership, the LLC has voting and disposition power over the
1,302,305 shares on behalf of the Partnership. Pepin and Page each own
50% of the LLC and Pepin is the Chief Manager of the LLC, and, as
such, both Pepin and Page have the power to direct the LLC to vote or
dispose of the 1,302,305 shares on behalf of the Partnership.
Additionally, Pepin has the sole power to vote and dispose of 130,500
shares of the Company. Page has the sole power to vote and dispose of
86,500 shares of the Company.
(c) None.
(d) The Partnership entered into a securities account margin agreement
with J.C. Bradford & Co. ("Bradford") in 1995. In 1999, Bradford was
acquired by Paine Webber, Inc. ("PaineWebber"). Per the terms of the
margin agreement, PaineWebber, as successor to Bradford, has the power
to liquidate any securities held for the benefit of the Partnership,
should the Partnership fail to meet minimum account maintenance
requirements. As of November 15, 2000, the Partnership was unable to
meet its minimum maintenance requirements and PaineWebber thus has the
power to dispose of shares of the Company held for the benefit of the
Partnership.
Additionally, Page maintained a securities account margin agreement
with Bradford, and then with PaineWebber as successor, that allowed
PaineWebber to liquidate any securities held for the benefit of Page,
should Page fail to meet minimum account maintenance requirements. At
November 15, 2000, Page was unable to meet his minimum maintenance
requirements and PaineWebber thus has the power to dispose of shares
of the Company held for the benefit of Page.
<PAGE> 8
Finally, Pepin maintained a securities account margin agreement with
Bradford, and then with PaineWebber as successor, that allowed
PaineWebber to liquidate any securities held for the benefit of Pepin,
should Pepin fail to meet minimum account maintenance requirements.
(e) Not applicable.
<PAGE> 9
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
The LLC is the sole general partner of the Partnership, and, as such, has the
power to vote or direct the vote of the shares on behalf of the Partnership.
Pepin and Page each own 50% of the LLC and Pepin is the Chief Manager of the
LLC, and, as such, both Pepin and Page have the power to direct the LLC to vote
or dispose of the share on behalf of the Partnership.
The Partnership entered into a securities account margin agreement with Bradford
in 1995. In 1999, Bradford was acquired by PaineWebber. Per the terms of the
margin agreement, PaineWebber, as successor to Bradford, has the power to
liquidate any securities held for the benefit of the Partnership, should the
Partnership fail to meet minimum account maintenance requirements. As of
November 15, 2000, the Partnership was unable to meet its minimum maintenance
requirements and PaineWebber thus has the power to dispose of shares of the
Company held for the benefit of the Partnership.
Additionally, Page maintained a securities account margin agreement with
Bradford, and then with PaineWebber as successor, that allowed PaineWebber to
liquidate any securities held for the benefit of Page, should Page fail to meet
minimum account maintenance requirements. At November 15, 2000, Page was unable
to meet his minimum maintenance requirements and PaineWebber thus has the power
to dispose of shares of the Company held for the benefit of Page.
Finally, Pepin maintained a securities account margin agreement with Bradford,
and then with PaineWebber as successor, that allowed PaineWebber to liquidate
any securities held for the benefit of Pepin, should Pepin fail to meet minimum
account maintenance requirements.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
1. Items relating to the borrowing of funds to finance the acquisitions as
described in Item 3.
(a) Form of securities account margin agreement between the Partnership and
Bradford, Page and Bradford and Pepin and Bradford.
<PAGE> 10
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
November 30, 2000
--------------------------------------------------------------------------------
Date
/s/ John Pepin
--------------------------------------------------------------------------------
Signature
John Pepin
--------------------------------------------------------------------------------
Name/Title
November 30, 2000
--------------------------------------------------------------------------------
Date
/s/ Jonathan Page
--------------------------------------------------------------------------------
Signature
Jonathan Page
--------------------------------------------------------------------------------
Name/Title
November 30, 2000
--------------------------------------------------------------------------------
Date
Pegasus Fund, L.P.
--------------------------------------------------------------------------------
Name/Title
By: Pegasus Management, LLC, its General Partner
By: /s/ John Pepin
--------------------------------------------------------------------------------
John Pepin, Chief Manager
November 30, 2000
--------------------------------------------------------------------------------
Date
Pegasus Management, LLC
--------------------------------------------------------------------------------
Name/Title
By: /s/ John Pepin
--------------------------------------------------------------------------------
John Pepin, Chief Manager
<PAGE> 11
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of the filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statement: provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name and any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT
CONSTITUTE FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
<PAGE> 12
"EXHIBIT A"
SECURITIES ACCOUNT MARGIN AGREEMENT
CONSENT TO LOAN OF SECURITIES
In consideration of the acceptance by J. C. Bradford & Co. ("Bradford")
of the account(s) in which I have an interest, alone or with others, which I
have opened or open in the future with Bradford for the purchase and sale of
securities or commodities I agree as follows:
1. RULES AND REGULATIONS
All transactions for my account shall be subject to the then applicable
constitution, rules, regulations, customs and usages of the exchange or market
and its clearing house, if any, where executed by Bradford or its agents; and,
where applicable, the Securities Exchange Act of 1934, as amended; the Commodity
Exchange Act, as amended; the rules and regulations of the Securities and
Exchange Commission, the Board of Governors of the Federal Reserve System and
the Commodity Futures Trading Commission.
2. WAIVER
I agree that no provision of this Agreement shall be waived, altered,
modified or amended unless committed to in writing and signed by a partner of
Bradford. No waiver of any provision of this Agreement shall be deemed a waiver
of any other provision, nor a continuing waiver of the provision(s) so waived.
3. SEVERABILITY
If any provision of this Agreement is held to be invalid, void or
unenforceable by reason of any law, rule, administrative order or judicial
decision, that determination shall not affect the validity of the remaining
provisions of this Agreement.
4. SECURITY INTEREST
All monies, securities, commodities or contracts relating thereto and
all other property in any account in which I have an interest (held either
individually, jointly or otherwise) or which may at any time be in Bradford's
possession for any purpose, including safekeeping, shall be subject to a general
lien for the discharge of all obligations I may have to Bradford, however and
whenever arising. All securities and other property shall be held by Bradford as
security for the payment of all such obligations or indebtedness in any account
in which I have an interest.
5. LOAN OR PLEDGE OF SECURITIES
All monies, securities and commodities or contracts relating thereto
and all other property which Bradford may at any time be carrying for me or in
which I may have an interest, may from time to time and without notice be
carried in Bradford's general loans and may be pledged, repledged, hypothecated
or rehypothecated, separately or in common with other securities or any property
for the sum due Bradford thereon or for a greater sum without retaining in
Bradford's possession and control for delivery a like amount of similar
securities or commodities. Subject
<PAGE> 13
to applicable law, Bradford, without notice to me, may apply and/or transfer
any or all monies, securities, commodities or contracts relating thereto and all
other property interchangeably between accounts or to accounts in which I have
an interest or which are guaranteed by me (except regulated commodity accounts).
Bradford is hereby specifically authorized to transfer to your cash account on
settlement day any excess funds available in any of your other accounts,
including but not limited to any free balances in any margin account, sufficient
to make full payment of cash purchases. I agree that any debit occurring in any
of my accounts may be transferred at Bradford's option to my margin account. I
hereby authorize Bradford, from time to time, to lend, separately or together
with property of others, to itself or others, any property it may be carrying
for me on margin. This authorization shall apply to all accounts for me.
6. INTEREST CHARGES
Debit balances in my accounts shall be charged interest or service
charges in accordance with Bradford's policies and at prevailing rates
determined by Bradford.
7. LIQUIDATION
I understand that, notwithstanding a general policy of giving customers
notice of a margin deficiency, Bradford is not obligated to request additional
margin from me in the event my account falls below minimum maintenance
requirements. More importantly, there may be circumstances where Bradford will
liquidate securities and/or other property in the account without notice to me
to ensure that minimum maintenance requirements are satisfied. Bradford shall
have the right in accordance with its general policies regarding margin
maintenance requirements to require additional collateral or the liquidation of
any securities and other property whenever in its discretion it considers it
necessary for its protection, including in the event of, but not limited to: My
failure to promptly meet any call for additional collateral; the filing of a
petition in bankruptcy by or against me; the appointment of a receiver is filed
by or against me; an attachment is levied against any account in which I have an
interest or; my death. In such event, Bradford is authorized to sell any and all
securities and other property in any account of mine, whether carried
individually or jointly with others, to buy all securities or other property
which may be short in such account(s), to cancel any open orders and to close
any or all outstanding contracts, all without demand for margin or additional
margin, other notice of sale or purchase, or other notice of advertisement each
of which is expressly waived by me. Any such sales or purchases may be made at
Bradford's discretion on any exchange or other market where such business is
usually transacted or at public auction or private sale, and Bradford may be the
purchaser for its own account. It is understood a prior demand, or call, or
prior notice of the time and place of such sale or purchase shall not be
considered a waiver of Bradford's right to sell or buy without demand or notice
as herein provided.
8. MARGIN
I will at all times maintain positions and margins in my accounts as
Bradford, in its discretion, may from time to time require and will pay on
demand any debit balance owing with respect to such accounts.
2
<PAGE> 14
9. GOVERNING LAW
This agreement shall be governed by the laws of the State of New York,
and shall inure to Bradford's successors and assigns, and shall be binding on
me, my heirs, executors, administrators and assigns.
10. ARBITRATION DISCLOSURES
- ARBITRATION IS FINAL AND BINDING ON THE PARTIES.
- THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT,
INCLUDING THE RIGHT TO JURY TRIAL.
- PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN AND DIFFERENT
FROM COURT PROCEEDINGS.
- THE ARBITRATORS' AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR
LEGAL REASONING AND ANY PARTY'S RIGHT TO APPEAL OR TO SEEK MODIFICATION
OF RULINGS BY THE ARBITRATOR IS STRICTLY LIMITED.
- THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF
ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY.
11. ARBITRATION
I AGREE, AND BY CARRYING AN ACCOUNT FOR ME, BRADFORD AGREES, THAT ALL
CONTROVERSIES WHICH MAY ARISE BETWEEN US CONCERNING ANY TRANSACTION OR THE
CONSTRUCTION, PERFORMANCE OR BREACH OF THIS OR ANY OTHER AGREEMENT BETWEEN US,
WHETHER ENTERED INTO PRIOR ON OR SUBSEQUENT TO THE DATE HEREOF, SHALL BE
DETERMINED BY ARBITRATION. ANY ARBITRATION UNDER THIS AGREEMENT SHALL BE
CONDUCTED PURSUANT TO THE FEDERAL ARBITRATION ACT AND THE LAWS OF THE STATE OF
NEW YORK. BEFORE THE AMERICAN ARBITRATION ASSOCIATION, OR BEFORE THE NEW YORK
STOCK EXCHANGE, INC. OR AN ARBITRATION FACILITY PROVIDED BY ANY OTHER EXCHANGE
OF WHICH BRADFORD IS A MEMBER, OR THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS, INC. AND IN ACCORDANCE WITH THE RULES OBTAINING OF THE SELECTED
ORGANIZATION, I MAY ELECT IN THE FIRST INSTANCE WHETHER ARBITRATION SHALL BE BY
THE AMERICAN ARBITRATION ASSOCIATION, OR BY AN EXCHANGE OR SELF-REGULATORY
ORGANIZATION OF WHICH THE BROKER IS A MEMBER. BUT IF I FAIL TO MAKE SUCH
ELECTION, BY REGISTERED LETTER OR TELEGRAM ADDRESSED TO BRADFORD AT ITS MAIN
OFFICE, BEFORE THE EXPIRATION OF FIVE DAYS AFTER RECEIPT OF A WRITTEN REQUEST
FROM BRADFORD TO MAKE SUCH ELECTION, THEN BRADFORD MAY MAKE SUCH ELECTION. THE
AWARD OF THE ARBITRATORS, OR OF THE MAJORITY OF THEM, SHALL BE FINAL, AND
3
<PAGE> 15
JUDGMENT UPON THE AWARD RENDERED MAY BE ENTERED IN ANY COURT, STATE OR FEDERAL,
HAVING JURISDICTION.
12. SALE ORDERS/DELIVERIES
I agree that when placing a sell order, all "short" sale orders shall
be designated as "short" and all "long" sale orders shall be designated as
"long." I represent that any sell order which I designate as "long" shall be for
securities then owed by me and if such securities are not then deliverable from
my account, that I will deliver them on or before settlement date. In the case
of the sale of any security, commodity or other property by Bradford at my
direction, Bradford's inability to deliver the same to the purchase by reason of
my failure to supply Bradford therewith, I authorize Bradford to borrow such
security, commodity or other property necessary to make delivery thereof and I
agree to be responsible for any loss which Bradford may sustain thereby and any
premiums which it may be required to pay thereon and for any additional loss
which it may sustain by reason of its inability to borrow the security,
commodity or other property sold on my behalf.
13. BROKER
I understand that in all transactions between me and Bradford, Bradford
shall be acting as broker for me, except when Bradford discloses to me that,
with respect to such transaction, it is acting as dealers for its account or as
broker for some other person.
14. COMMUNICATIONS
Confirmations of transactions and statements of my account shall be
conclusive if not objected to in writing to Bradford within 5 days and 10 days
respectively after transmitted to me by mail or otherwise. Communications may be
sent to me at the address shown on Bradford's records for my account or at such
other address as I may hereafter provide to Bradford in writing. All
communications sent, whether by mail, telegraph, messenger or otherwise will be
deemed given, whether actually received or not.
15. REPRESENTATIONS
I represent that I am of legal age, am not an employee or member of any
exchange or a member firm or any corporation of which any exchange owns a
majority interest or the NASD or of a bank, trust company, insurance company or
other employer engaged in the business of a broker-dealer and that I will
promptly notify Bradford if I become so employed. I further represent that,
unless otherwise disclosed to Bradford in writing, no one except myself has an
interest in the account or accounts maintained with Bradford in my name.
16. AGREEMENT CONTAINS ENTIRE UNDERSTANDING/AGREEMENT
This Agreement contains the entire understanding between myself and
Bradford concerning the subject matter of this Agreement. I may not assign the
rights and obligations hereunder without first obtaining the prior written
consent of Bradford.
4
<PAGE> 16
BY SIGNING THIS AGREEMENT I ACKNOWLEDGE THAT:
1. THE SECURITIES IN MY MARGIN ACCOUNT MAY BE LOANED TO BRADFORD OR LOANED
OUT TO OTHERS AND;
2. I HAVE RECEIVED A COPY OF THIS AGREEMENT; AND
3. THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE AT
PARAGRAPH 11.
--------------------------- --------------------------------
Date Customer Signature
--------------------------------
Customer Signature
5
