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BEAR STEARNS BEAR, STEARNS SECURITIES CORP.
ONE METROTECH CENTER NORTH
BROOKLYN, NEW YORK 11201-3800
(212) 272-1000
CUSTOMER AGREEMENT
PLEASE READ CAREFULLY, SIGN AND RETURN
This agreement ("Agreement") sets forth the terms and
conditions under which Bear, Stearns Securities Corp., Bear, Stearns & Co. Inc.,
and their successors, and assigns (collectively "Bear Stearns") will transact
business with you including but not limited to the maintenance of your
account(s). If these accounts are cash accounts and you have fully paid for all
securities therein, the provisions of paragraphs 16 and 17 shall not bind you
unless you enter into a margin transaction.
1. APPLICABLE LAW AND REGULATIONS. All transactions shall be
subject to all applicable law and the rules and regulations of all federal,
state and self-regulatory agencies, including, but not limited to, the Board of
Governors of the Federal Reserve System and the constitution, rules and customs
of the exchange or market (and clearing house) where executed.
2. SECURITY INTEREST AND LIEN. As security for the payment of
all of your obligations and liabilities to Bear Stearns, Bear Stearns shall have
a continuing security interest in all property in which you have an interest
held by or through Bear Stearns or its affiliates, including, but not limited
to, securities, commodity futures contracts, commercial paper, monies and any
after-acquired property. In addition, in order to satisfy any such outstanding
liabilities or obligations, Bear Stearns may, at any time and without prior
notice to you, use, apply or transfer any such securities or property
interchangeably. In the event of a breach or default under this Agreement, Bear
Stearns shall have all rights and remedies available to a secured creditor under
any applicable law in addition the rights and remedies provided herein.
3. DEPOSITS ON TRANSACTIONS. Whenever Bear Sterns, in its sole
discretion, considers it necessary for its protection, it may require you to
deposit cash or collateral immediately in your account(s) prior to any
applicable settlement date in order to assure due performance of your open
contractual commitments.
4. BREACH, BANKRUPTCY OR DEFAULT. Any breach of this Agreement
or the filing of a petition or other proceeding in bankruptcy, insolvency, or
for the appointment of a receiver by or against you, the levy of an attachment
against your account(s) with Bear Stearns, or your death, mental incompetence or
dissolution, or any other grounds for insecurity, as determined by Bear Stearns
in its sole discretion, shall constitute, at Bear Stearns' election, a default
by you under all agreements Bear Stearns may then have with you, whether
heretofore or hereafter entered into. In the event of default, Bear Stearns
reserves the right to sell, without prior notice to you, any and all property in
which you have an interest, held by or through Bear Stearns or any of its
affiliates, to buy any or all property which may have been sold
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short, to cancel any or all outstanding transactions and/or to purchase or sell
any other securities or property to offset market risk, and to offset any
indebtedness you may have (either individually or jointly with others), after
which you shall be liable to Bear Stearns for any remaining deficiency, loss,
costs or expenses sustained by Bear Stearns in connection therewith. Such
purchases and/or sales may be effected publicly or privately without notice or
advertisement in such manner as Bear Stearns may in its sole discretion
determine. At any such sale or purchase, Bear Stearns may purchase or sell the
property free of any right of redemption. In addition, Bear Stearns shall have
the right to set off and apply any amount owing from Bear Stearns or any of its
affiliates to you against any indebtedness in your accounts, whether matured or
unmatured.
5. FEES AND CHARGES. You understand that Bear Stearns may
charge commissions and other fees for execution, custody or any other service
furnished to you, and you agree to pay such commissions and fees at Bear
Stearns' then prevailing rates. You understand further that such commissions and
fees may be changed from time to time, upon thirty days' prior written notice to
you, and you agree to be bound thereby.
6. TRANSACTION REPORTS AND ACCOUNT STATEMENTS. Reports of the
execution or orders and statements of your account(s) shall be conclusive if not
objected to in writing within five days in the case of reports of execution, and
ten days in the case of account statements, after such documents have been
transmitted to you by mail or otherwise.
7. DEBIT BALANCES/TRUTH-IN-LENDING. You hereby acknowledge
receipts of Bear Stearns' Truth-in-Lending disclosure statement. You understand
that interest will be charged on any debit balances in your account(s), in
accordance with the methods described in such statement or in any amendment or
revision thereto which may be provided to you. Any debit balance which is not
paid at the close of an interest period will be added to the opening balance for
the next interest period.
8. CLEARANCE ACCOUNTS. Bear, Stearns Securities Corp. carries
your account(s) as clearing agent for your broker. Unless Bear, Stearns
Securities Corp. receives from you prior written notice to the contrary, Bear,
Stearns Securities Corp. may accept from such other broker, without any inquiry
or investigation: (a) orders for the purchase or sale of securities and other
property in your account(s) on margin or otherwise and (b) any other
instructions concerning your account(s) or the property therein. You understand
and agree that Bear Stearns shall have no responsibility or liability to you for
any acts or omissions of such broker, its officers, employees or agents. You
agree that your broker and its employees are third-party beneficiaries of this
Agreement, and that the terms and conditions hereof, including the arbitration
provision, shall be applicable to all matters between or among any of you, your
broker and its employees, and Bear Stearns and its employees.
9. COSTS OF COLLECTION. You hereby authorize Bear Stearns to
charge you for any reasonable direct or indirect costs of collection including,
but not limited to, attorneys' fees, court costs and other expenses.
10. IMPARTIAL LOTTERY ALLOCATION. You agree that, in the event
Bear Stearns holds on your behalf bonds or preferred stocks in street name or
bearer form which
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are callable in part, you will participate in the impartial lottery allocation
system of the called securities in accordance with the rules of the New York
Stock Exchange, Inc. or any other appropriate self-regulatory organization. When
any such call if favorable, no allocation will be made to any account(s) in
which Bear Stearns has actual knowledge that its officers, directors or
employees have any financial interest until all other customers are satisfied on
an impartial lottery basis.
11. WAIVER; ASSIGNMENT AND NOTICES. Neither Bear Stearns'
failure to insist at any time upon strict compliance with this Agreement or with
any of the terms hereof nor any continued course of such conduct on its part
shall constitute or be considered a waiver by Bear Stearns of any of its rights
or privileges hereunder. Any assignment of your rights and obligations hereunder
or interest in any property held by or through Bear Stearns without obtaining
the prior written consent of an authorized representative of Bear Stearns shall
be null and void. Notices or other communications, including margin calls,
delivered or mailed to the address provided by you, shall, until Bear Stearns
has received notice in writing of a different address, be deemed to have been
personally delivered to you.
12. FREE CREDIT BALANCES. You hereby direct Bear Stearns to
use any free credit balance awaiting investment or reinvestment in your
account(s) in accordance with all applicable rules and regulations and to pay
interest thereon at such rate or rates and under such conditions as are
established from time to time by Bear Stearns for such accounts(s) and for the
amounts of cash so used.
13. RESTRICTIONS ON ACCOUNT. You understand that Bear Stearns,
in its sole discretion, may restrict or prohibit trading of securities or other
property in your account(s).
14. CREDIT INFORMATION AND INVESTIGATION. You authorize Bear
Stearns and your broker, in their discretion, to make and obtain reports
concerning your credit standing and business conduct. You may make a written
request within a reasonable period of time for a description of the nature and
scope of the reports made or obtained by Bear Stearns.
15. SHORT AND LONG SALES. In placing any sell order for a
short account, you will designate the order as such and hereby authorize Bear
Stearns to mark the order as being "short." In placing any sell order for a long
account, you will designate the order as such and hereby authorize Bear Stearns
to mark the order as being "long." The designation of a sell order as being for
a long account shall constitute a representation that you own the security with
respect to which the order has been placed, that such security may be sold
without restriction in the open market and that, if Bear Stearns does not have
the security in its possession at the time you place the order, you shall
deliver the security by settlement date in good deliverable form or pay to Bear
Stearns any losses or expenses incurred as a result of your failure to make
delivery.
16. MARGIN ACCOUNTS. You hereby agree to deposit and maintain
such margin in your account(s) as Bear Stearns may in its sole discretion
require, and you agree to pay forthwith on demand any debit balance owing with
respect to any of your margin account(s). Upon your failure to pay, or at any
time Bear Stearns, in its discretion, deems necessary for its
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protection, whether with or without prior demand, call or notice, Bear Stearns
shall be entitled to exercise all rights and remedies provided in paragraphs 2
and 4 above. No demands, calls, tenders or notices that Bear Stearns may have
made or given in the past in any one or more instances shall invalidate your
waiver of the requirement to make or give the same in the future. Unless you
advise Bear Stearns to the contrary, you represent that you are not an affiliate
(as defined in Rule 144(a)(1) under the Securities Act of 1933) of the issuer of
any security held in your account(s).
17. CONSENT TO LOAN OR PLEDGE OF SECURITIES. Within the limits
of applicable law and regulations, you hereby authorize Bear Stearns to lend
either to itself or to others any securities held by Bear Stearns in your
account(s), together with all attendant rights of ownership, and to use all such
property as collateral for its general loans. Any such property, together with
all attendant rights of ownership, may be pledged, repledged, hypothecated, or
rehypothecated either separately or in common with other such property for any
amounts due to Bear Stearns thereon or for a greater sum, and Bear Stearns shall
have no obligation to retain a like amount of similar property in its possession
and control.
18. LEGALLY BINDING. You hereby agree that this Agreement and
all the terms hereof shall be binding upon you and your estate, heirs,
executors, administrators, personal representatives, successors and assigns. You
agree that all purchases and sales shall be for your account(s) in accordance
with your oral or written instructions. You hereby waive any and all defenses
that any such instruction was not in writing as may be required by the Statute
of Frauds or any other similar law, rule or regulation.
19. AMENDMENT; ENTIRE AGREEMENT. You agree that Bear Stearns
may modify the terms of this Agreement at any time upon prior written notice. By
continuing to accept services from Bear Stearns, you will have indicated your
acceptance of any such modifications. If you do not accept such modifications,
you must notify Bear Stearns in writing; your account may then be terminated by
Bear Stearns, after which you will remain liable to Bear Stearns for all
remaining liabilities or obligations. Otherwise, this Agreement may not be
waived or modified absent a written instrument signed by an authorized
representative of Bear Stearns. Except as set forth above, this Agreement
represents the entire agreement and understanding between you and Bear Stearns
concerning the subject matter hereof.
20. NEW YORK LAW TO GOVERN. THIS AGREEMENT SHALL BE DEEMED TO
HAVE BEEN MADE IN THE STATE OF NEW YORK AND SHALL BE CONSTRUED, AND THE RIGHTS
AND LIABILITIES OF THE PARTIES DETERMINED, IN ACCORDANCE WITH THE LAW OF THE
STATE OF NEW YORK.
21. ARBITRATION.
. 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
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OR TO SEEK MODIFICATION OF RULINGS BY THE ARBITRATORS IS STRICTLY LIMITED.
. THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A
MINORITY OF ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY.
. NO PERSON SHALL BRING A PUTATIVE OR CERTIFIED CLASS
ACTION TO ARBITRATION, NOR SEEK TO ENFORCE ANY PRE-DISPUTE ARBITRATION AGREEMENT
AGAINST ANY PERSON WHO HAS INITIATED IN COURT A PUTATIVE CLASS ACTION OR WHO IS
A MEMBER OF A PUTATIVE CLASS WHO HAS NOT OPTED OUT OF THE CLASS WITH RESPECT TO
ANY CLAIMS ENCOMPASSED BY THE PUTATIVE CLASS ACTION UNTIL:
(i) THE CLASS CERTIFICATION IS DENIED;
(ii) THE CLASS IS DECERTIFIED; OR
(iii) THE CUSTOMER IS EXCLUDED FROM THE CLASS BY THE COURT, SUCH FORBEARANCE TO
ENFORCE AN AGREEMENT TO ARBITRATE SHALL NOT CONSTITUTE A WAIVER OF ANY RIGHTS
UNDER THIS AGREEMENT EXCEPT TO THE EXTENT STATED HEREIN.
YOU AGREE, AND BY MAINTAINING AN ACCOUNT FOR YOU BEAR STEARNS
AGREES, THAT CONTROVERSIES ARISING BETWEEN YOU AND BEAR STEARNS, ITS CONTROL
PERSONS, PREDECESSORS, SUBSIDIARIES AND AFFILIATES AND ALL RESPECTIVE
SUCCESSORS, ASSIGNS AND EMPLOYEES WHETHER ARISING PRIOR TO, ON OR SUBSEQUENT TO
THE DATE HEREOF, SHALL BE DETERMINED BY ARBITRATION. ANY ARBITRATION UNDER THIS
AGREEMENT SHALL BE HELD AT THE FACILITIES AND BEFORE AN ARBITRATION PANEL
APPOINTED BY THE NEW YORK STOCK EXCHANGE, INC., OR THE NATIONAL ASSOCIATION OF
SECURITIES DEALERS, INC. (AND ONLY BEFORE SUCH EXCHANGES OR ASSOCIATION). YOU
MAY ELECT ONE OF THE FOREGOING FORUMS FOR ARBITRATION, BUT IF YOU FAIL TO MAKE
SUCH ELECTION BY REGISTERED MAIL OR TELEGRAM ADDRESSED TO BEAR, STEARNS
SECURITIES CORP. 245 PARK AVENUE, NEW YORK, NEW YORK 10167, ATTENTION: CHIEF
LEGAL OFFICER (OR ANY OTHER ADDRESS OF WHICH YOU ARE ADVISED IN WRITING), BEFORE
THE EXPIRATION OF TEN DAYS AFTER RECEIPT OF A WRITTEN REQUEST FROM BEAR STEARNS
TO MAKE SUCH ELECTION, THEN BEAR STEARNS MAY MAKE SUCH ELECTION. FOR ANY
ARBITRATION SOLELY BETWEEN YOU AND A BROKER FOR WHICH BEAR STEARNS ACTS AS
CLEARING AGENT, SUCH REELECTION SHALL BE MADE BY REGISTERED MAIL TO SUCH BROKER
AT ITS PRINCIPAL PLACE OF BUSINESS. THE AWARD OF THE ARBITRATORS, OR OF THE
MAJORITY OF THEM SHALL BE FINAL, AND JUDGMENT UPON THE AWARD RENDERED MAY BE
ENTERED IN ANY COURT, STATE OR FEDERAL, HAVING JURISDICTION.
22. SEVERABILITY. If any provision herein is or should become
inconsistent with any present or future law, rule or regulation of any sovereign
government or regulatory body having jurisdiction over the subject matter of
this Agreement, such provision shall be deemed to be rescinded or modified in
accordance with any such law, rule or regulation. In all other respects, this
Agreement shall continue to remain in full force and effect.
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23. CAPACITY TO CONTRACT; CUSTOMER AFFILIATION. You represent
that you are of legal age and that, unless you have notified Bear Stearns to the
contrary, neither you nor any member of your immediate family is an employee of
any exchange or member thereof, the National Association of Securities Dealers,
Inc. or a member thereof, or of any corporation, firm or individual engaged in
the business of dealing, as broker or principal, in securities, options or
futures, or of any bank, trust company or insurance company.
24. EXTRAORDINARY EVENTS. Bear Stearns shall not be liable for
losses caused directly or indirectly by government restrictions, exchange or
market rulings, suspension of trading, war, strikes or other conditions beyond
its control.
25. HEADINGS. The headings of the provisions hereof are for
descriptive purposes only and shall not modify or qualify any of the rights or
obligations set forth in such provisions.
26. TELEPHONE CONVERSATIONS. For the protection of both you
and Bear Stearns, and as a tool to correct misunderstandings, you hereby
authorize Bear Stearns at Bear Stearns' discretion and without prior notice to
you, to monitor and/or record any or all telephone conversations between you,
Bear Stearns and any of Bear Stearns' employees or agents.
If this is a Joint Account, both parties must sign. Persons
signing on behalf of others should indicate the titles or capacities in which
they are signing. BY SIGNING THIS AGREEMENT YOU ACKNOWLEDGE THAT:
1. THE SECURITIES IN YOUR MARGIN ACCOUNT(S) AND ANY
SECURITIES FOR WHICH YOU HAVE NOT FULLY PAID, TOGETHER WITH ALL ATTENDANT
OWNERSHIP RIGHTS, MAY BE LOANED TO BEAR STEARNS OR LOANED OUT TO OTHERS; AND
2. YOU HAVE RECEIVED A COPY OF THIS AGREEMENT.
THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE AT
PARAGRAPH 21.
THIS AGREEMENT DATED AS OF December 21, 1994.
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Prime Group Limited Partnership 77 West Wacker Drive, Suite 3900
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(Typed or Printed Name)
/s/ Michael W. Reschke Chicago, IL 60601 Attn: Robert J. Rudnik
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(Signature)
Michael W. Reschke, Managing General Partner Account No.:
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(Typed or Printed Name)
-------------------------------------------- Date: December 21, 1994
(Signature) -----------------------------------------------------
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Accepted By: Date:
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(Bear, Stearns Securities Corp.)
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