<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES AND EXCHANGE ACT OF 1934
(AMENDMENT NO. 1 )*
---------
Prudential Realty Trust
- -------------------------------------------------------------------------------
(Name of Issuer)
Income Shares of Beneficial Interest
- -------------------------------------------------------------------------------
(Title of Class of Securities)
74435P-10-4
- -------------------------------------------------------------------------------
(CUSIP Number)
Marc C. Krantz, Kohrman Jackson & Krantz, 1375 East 9th Street, Cleveland, Ohio
44114, 216-736-7204
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
April 11, 1995
- -------------------------------------------------------------------------------
(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 which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) 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 1 of 19 Pages
<PAGE> 2
SCHEDULE 13D
<TABLE>
CUSIP NO. 74435P-10-4 PAGE 2 OF 19 PAGES
<S> <C>
- -----------------------------------------------------------------------------------------------------------
| 1 | NAME OF REPORTING PERSON |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | |
| | TURKEY VULTURE FUND XIII, LTD. |
|-----|---------------------------------------------------------------------------------------------------|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ x ] |
| | ---- |
| | (b) [ ] |
| | ---- |
|-----|---------------------------------------------------------------------------------------------------|
| 3 | SEC USE ONLY |
| | |
|-----|---------------------------------------------------------------------------------------------------|
| 4 | SOURCE OF FUNDS* |
| | |
| | WC, 00 |
| | |
| | |
|-----|---------------------------------------------------------------------------------------------------|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT |
| | TO ITEMS 2(d) OR 2(e) [ ] |
| | ---- |
| | |
| | |
|-----|---------------------------------------------------------------------------------------------------|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | |
| | OHIO |
|-------------------------------|-------|-----------------------------------------------------------------|
| NUMBER OF | 7 | SOLE VOTING POWER |
| | | |
| SHARES | | 1,011,900 |
| |-------|-----------------------------------------------------------------|
| BENEFICIALLY | 8 | SHARED VOTING POWER |
| | | |
| OWNED BY | | |
| |-------|-----------------------------------------------------------------|
| EACH | 9 | SOLE DISPOSITIVE POWER |
| | | |
| REPORTING | | 1,011,900 |
| | | |
| PERSON |-------|-----------------------------------------------------------------|
| | 10 | SHARED DISPOSITIVE POWER |
| WITH | | |
| | | |
|-------------------------------|-------|-----------------------------------------------------------------|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | |
| | 1,011,900 |
|-----|---------------------------------------------------------------------------------------------------|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN |
| | SHARES* [ ] |
| | ---- |
|-----|---------------------------------------------------------------------------------------------------|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | |
| | 9.1% |
|-----|---------------------------------------------------------------------------------------------------|
| 14 | TYPE OF REPORTING PERSON* |
| | |
| | OO |
- -----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
CUSIP No. 74435P-10-4
This Amendment No. 1 to Schedule 13D Statement is filed on behalf of
TURKEY VULTURE FUND XIII, LTD., an Ohio limited liability company (the "Fund"),
for the purpose of reporting (1) the acquisition by it of 435,800 income shares
of beneficial interest, $0.01 par value (the "Income Stock"), of Prudential
Realty Trust, a Massachusetts business trust ("Prudential"), in four
transactions on April 11 and 12, 1995, and (2) the filing of two lawsuits by
Richard M. Osborne, the sole managing member of the Fund ("RMO"), against
Prudential and its trustees.
Item 3. Source and Amount of Funds or Other Consideration.
--------------------------------------------------
The Income Stock reported herein as having been acquired by the Fund
was acquired for an aggregate purchase price of approximately $2.0 million,
$200,000 of which was from working capital of the Fund and $1.8 million
of which was in the form of margin debt from Smith Barney, Inc. ("Smith
Barney"). Interest on the margin debt is charged in accordance with Smith
Barney's policy. Interest charges, if not paid, are added to the debit balance
for the next interest period. Smith Barney has a lien on the Income Stock
reported herein as having been acquired by the Fund. Smith Barney may impose
margin requirements more stringent than those required by law or exchange
regulations. A copy of the agreement setting forth the terms of the margin
debt is attached hereto as Exhibit 7.1.
Item 4. Purpose of Transaction.
-----------------------
As previously reported by RMO in Amendment No. 6 to Schedule 13D
Statement filed on February 23, 1995, RMO and OsAir, Inc., a company of which
RMO is President and Chairman ("OsAir"), retained Kemper Securities, Inc. to
act as their exclusive financial advisor in connection with negotiations with
Prudential. Also, as previously reported, RMO met with representatives of
Prudential on December 21, 1994, February 21, 1995 and March 16, 1995 to
discuss the investment and the available alternatives.
As previously reported by RMO in Amendment No. 7 to Schedule 13D
Statement filed on April 7, 1995 ("Amendment No. 7"), RMO has proposed to the
trustees of Prudential that Prudential be merged into a new entity formed by
RMO with a single class of common stock. In addition, RMO has proposed that
experienced professional management be retained to manage Prudential on an
ongoing basis and, in connection with this proposal, RMO has guaranteed that
management expenses will be reduced by at least 50%, i.e., $400,000. A copy of
the letter setting forth RMO's proposals is attached as Exhibit 7.1 to
Amendment No. 7, and a copy of the letter setting forth the response of
Prudential is attached as Exhibit 7.2 to Amendment No. 7.
To date, no agreement has been reached by RMO or OsAir with
Prudential. Rather, the trustees and their representatives have indicated that
they are not interested in RMO's proposals and that they are not inclined to
bring his proposals to a vote of the shareholders. The trustees have
specifically rejected RMO's oral proposal that the parties enter into a
standstill agreement
Page 3 of 19 Pages
<PAGE> 4
CUSIP No. 74435P-10-4
whereby the trustees would agree to refrain from disposing of any of
Prudential's trust property while the trustees evaluated RMO's proposal.
RMO proposed the standstill agreement because of the trustees'
indication that they intend to liquidate Prudential at the earliest available
date. According to the terms of Prudential's Declaration of Trust, it was
intended that the trustees would "hold [Prudential's] investments in interests
in Real Property for a period of approximately 10-1/2 years after the effective
date of the Registration Statement and, after that time, the Trustees would
dispose of any remaining assets of [Prudential] in an orderly fashion within a
period of approximately 18 months in order to achieve a complete liquidation of
[Prudential] by the end of the quarter in which the twelfth anniversary after
the effective date of the Registration Statement shall fall." RMO believes
that the Registration Statement became effective on or about August 26, 1985.
However, the Declaration of Trust does not provide for the automatic
liquidation of Prudential. It goes on to expressly provide that
[Prudential's] existence and the maximum holding period for its
investments may be extended beyond such twelve year period only if (a)
(i) at any time after December 31, 1994, a majority of the Trustees
. . . affirmatively determines that such extension would be in the best
interests of the [shareholders of Prudential], taking into
consideration the then prevailing conditions in the relevant real
estate markets, and recommends to the [shareholders of Prudential] a
single specified extension of the aforesaid twelve year period (not to
exceed two years) and (ii) the holders of a majority of each class of
the Shares then outstanding and entitled to vote thereon approve such
extension or (b) [Prudential] is a party to any judicial . . .
proceeding . . . with respect to [Prudential], which in the Trustees'
reasonable judgment makes impracticable a final distribution in
liquidation to the [shareholders of Prudential].
On April 5, 1995, RMO commenced an action in the Probate Court
Department of the Trial Court of the Commonwealth of Massachusetts captioned
RICHARD M. OSBORNE V. PRUDENTIAL REALTY TRUST, AND JEFFREY L. DANKER, THOMAS F.
MURRAY, JOSEPH M. SELZER, RICHARD J. BOYLE, FRANCIS L. BRYANT, AS TRUSTEES OF
PRUDENTIAL REALTY TRUST (Suffolk No. 95-E-0016) (the "Removal Action"). The
complaint alleges, among other matters, that the trustees are in direct
conflict with Prudential's shareholders, and by charging excessively high fees
and attempting to liquidate the Trust's assets, have engaged in and are
continuing to engage in a pattern of conduct designed to waste Prudential's
assets while at the same time enriching the Trustees. The complaint seeks
immediate removal of the trustees.
On April 14, 1995, RMO commenced a second action in the Superior Court
Department of the Trial Court of the Commonwealth of Massachusetts captioned
RICHARD M. OSBORNE, ET AL. V. PRUDENTIAL REALTY TRUST, AND JEFFREY L. DANKER,
THOMAS F. MURRAY, JOSEPH M. SELZER, RICHARD J. BOYLE, FRANCIS L. BRYANT, AS
TRUSTEES OF PRUDENTIAL REALTY TRUST (Civ. Act. No. 95-2095A).
Page 4 of 19 Pages
<PAGE> 5
CUSIP No. 74435P-10-4
The complaint reiterates certain allegations set forth in the Removal Action
and further alleges, among other matters, that the trustees intend to favor the
interests of the holders of Income Stock over the holders of the capital shares
of beneficial interest, $0.01 par value (the "Capital Stock"), of Prudential.
According to the Form 10-K, dated March 29, 1995, filed by Prudential with the
Securities and Exchange Commission,
The holders of the Income [Stock] are entitled, in general, to all
Distributable Cash of [Prudential] (as defined in the Declaration of
Trust) and, at or prior to the termination of [Prudential], to
redemption of such shares up to the stated value of $8.00 per share
plus accrued and unpaid dividends. The holders of the Capital [Stock]
are entitled to all other shareholder distributions which will, in
general, include capital gains, if any, of [Prudential].
However, the complaint alleges that nowhere in Prudential's Declaration of
Trust or its Prospectus, dated August 22, 1985, does it state that redemption
of the Income Stock shall be made prior to the payment of capital gains to
holders of Capital Stock. On the contrary, the offering documents specify that
the payment of capital gains is distinct from distributions and dividends, and
shall be paid immediately upon the disposition of any of Prudential's assets,
if any such capital gain is realized.
The complaint seeks unspecified damages for the alleged breach of
fiduciary duty by the trustees, and that those damages be trebled or at least
doubled. In addition, the complaint seeks a declaratory judgment with respect
to the trustees' obligations to distribute capital gains to the holders of
Capital Stock or Income Stock.
RMO, along with the Fund, is considering whether to call a special
meeting of the holders of the Income Stock and the Capital Stock or seek the
consent of such holders, without a meeting, to remove and/or replace the
trustees of Prudential and take such other steps as may be necessary to delay
the liquidation of Prudential and/or otherwise implement the proposals made by
RMO to Prudential.
RMO would prefer to reach agreement with Prudential regarding his
proposals, and, in particular, delay any plans for immediate liquidation.
However, there is no assurance that RMO and Prudential will be able to reach
any agreement.
The Fund and RMO may continue to purchase additional Income Stock
and/or Capital Stock. The Fund and RMO are aware that because Prudential is a
real estate investment trust ("REIT") the Internal Revenue Code of 1986, as
amended (the "Code"), and Prudential's declaration of trust may govern the
acquisition of additional stock by the Fund and RMO. In particular, the Code
provides that to qualify as a REIT an entity must (i) throughout each taxable
year have at least 100 shareholders and (ii) during the last half of each
taxable year have not more than 50% in value of the outstanding shares of the
entity owned, directly or indirectly, by
Page 5 of 19 Pages
<PAGE> 6
CUSIP No. 74435P-10-4
five or fewer individuals. The declaration of trust of Prudential provides
that any purported transfer of shares that would result in the disqualification
of the Trust as a REIT is deemed null and void. In the event that the Fund and
RMO determine to make additional purchases of Income Stock or Capital Stock,
they will continue to review such provisions of the Code and declaration of
trust.
Item 5. Interest in Securities of the Issuer.
-------------------------------------
(a) According to the most recently available filing with
the Securities and Exchange Commission by Prudential, there are 11,135,000
shares of Income Stock outstanding. The Fund beneficially owns 1,011,900
shares of Income Stock, or approximately 9.1% of the outstanding Income Stock.
As reported on his Amendment No. 8 to Schedule 13D Statement being filed
concurrently herewith, RMO beneficially owns 2,048,800 shares of Capital Stock,
representing approximately 18.4% of the outstanding Capital Stock. RMO is the
sole managing member of the Fund. Under Section 13d(3) of the Securities
Exchange Act of 1934, as amended, RMO and the Fund may be deemed members of a
group.
(b) The Fund, and RMO as sole managing member thereof,
has sole power to vote, or to direct the voting of, and the sole power to
dispose or to direct the disposition of, the 1,011,900 shares of Income Stock
owned by the Fund.
(c) During the past sixty days and in addition to the
transactions reported on the Schedule 13D filed by the Fund on January 17,
1995, the Fund has purchased the Income Stock in open market transactions as
set forth below:
<TABLE>
Date Number of Shares Approximate Per Share Price
------------------------ ---------------- ---------------------------
<S> <C> <C>
April 11, 1995 120,000 $4.38
April 11, 1995 10,800 $4.38
April 12, 1995 205,000 $4.38
April 12, 1995 100,000 $4.38
</TABLE>
Although the foregoing transactions took place on the open market, the
Fund and RMO have reason to believe that the shares were sold by Lowe
Brockenbrough Tierney & Tattersall Inc., Richmond, VA.
Item 7. Material to be Filed as Exhibits.
---------------------------------
Exhibit 7.1 -- Client Agreement between Smith
Barney Inc. and the Fund
Page 6 of 19 Pages
<PAGE> 7
CUSIP No. 74435P-10-4
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.
Turkey Vulture Fund XIII, Ltd.
Dated: April 18, 1995 /s/ Richard M. Osborne
-----------------------------
Richard M. Osborne
Managing Member
Page 7 of 19 Pages
<PAGE> 1
EXHIBIT INDEX
Exhibit 7.1 -- Client Agreement between Smith Barney Inc. and the
Fund
<PAGE> 2
SMITH BARNEY
CLIENT AGREEMENT
Account Number 224-43061-1-0-005
Before you sign this Agreement, please read it carefully. Instructions for the
completion of this Agreement are contained in the accompanying booklet entitled
"Important New Account Information." After you have completed and signed this
Agreement, please return it in the enclosed postage-paid envelope. Note:
Signatures are MANDATORY in either Sections A and C OR Section B and C.
Account Title Turkey Vulture Fund XIII Ltd
Street Address 7001 Center Street
City Mentor
State Ohio
ZIP Code 44060
In consideration of Smith Barney Inc. accepting an account for me, (us), I
(we), hereby acknowledge that I (we) have read, understand and agree to the
terms of this Agreement contained in the sections numbered 1 through 11. If
this is a margin account, I (we) further acknowledge that I (we) have read,
understand and agree to the terms of this Agreement contained in the sections
numbered 15 through 17. If this is a joint account, we further acknowledge
that we have read, understand and agree to the terms of this Agreement
contained in the sections numbered 12 through 14. Note: Texas residents with
joint accounts must also execute a Texas Joint Account Supplement agreement
(form 3882).
A. Cash Accounts.
I (we) acknowledge that I (we) have received a copy of this Agreement which
contains a pre-dispute arbitration clause at section 6.
If this is a joint account, all parties must sign.
Account Owner's Signature /s/ Richard M. Osborne
B. Margin Accounts.
By signing this Agreement, I (we) acknowledge that my (our) securities may be
loaned to you or loaned out to others. I (We) acknowledge that I (we) have
received a copy of this Agreement which contains a pre-dispute arbitration
clause at section 5.
If this is a joint account, all parties must sign.
Account Owner's Signature /s/ Richard M. Osborne
C. Tax Certification (See Instructions on the last page of this form).
Under penalties of perjury, I certify that the number shown below is my correct
taxpayer identification number or if not, then the number I have entered below
is my correct tax
<PAGE> 3
identification number, and that I am not subject to backup withholding because:
(a) I have not been notified by the Internal Revenue Service (IRS) that I am
subject to backup withholding as a result of a failure to report all interest
or dividends, or (b) the IRS has notified me that I am no longer subject to
backup withholding (see below), or, (c) I am exempt from backup withholding
(see below). Note: you must cross out (b) above if you are currently subject
to backup withholding because of underreporting interest or dividends on your
tax return. For those exempt from backup withholding, write the word "EXEMPT"
here:
The Social Security Number or Tax Identification Number on Smith Barney's
records is: 341786314
The Social Security Number or Tax Identification Number shown to the left is
incorrect. The CORRECT number is:
Note for joint accounts: The Social Security Number of this account is the
number of the client whose name appears first in the account title. Do not
enter the number of any other account owner.
Account Owner's Signature /s/ Richard M. Osborne
D. Name Disclosure.
Please indicate your choice as to the release or withholding of your name,
address and securities positions to issuing corporations.
[X] NO, I do not want
[ ] YES, I do want
My name, address and securities positions disclosed to any companies, upon
their request, in which I own securities that we are being held for me at Smith
Barney Inc.
E. Money Market Fund Agreement.
Available cash in your account will automatically be invested or "swept" into
the money market fund of your choice. If you do not elect to have the
automatic money market fund sweep, please check the "NO" box below. If you
wish to change your choice of money market fund, please contact your Financial
Consultant.
Note to Wisconsin residents: You must indicate below specifically whether or
not you wish to have a money market sweep for your account.
[ ] NO, I do not want cash balances in my account to be automatically spent
into a money market fund
[X] YES, I would like the cash balances in my account to be
<PAGE> 4
automatically swept into the fund of my choice
F. Tenancy In Common. DO NOT Complete This Section If You Wish To
Establish A Joint Account With Rights of Survivorship. In the event of the
death of either or any of the undersigned, the interest in the account as of
the close of business on the date of the death of the decedent, or on the
following business day if the date of death is not a business day shall be as
follows: Note: Texas residents with joint account must also execute a Texas
Joint Account Supplement agreement (form 3882).
In consideration of your opening one or more accounts for me ("we", "us" and
"our", are each substituted for "I", "me" and "my", respectively, in the case
of multiple account holders, corporations and other entities), and your
agreeing to act as broker/dealer for me for the extension of credit and in the
purchase or sale of securities, commodities, options and other property, it is
agreed in respect to any and all accounts, whether upon margin or otherwise,
which I now have or may at any future time have with Smith Barney Inc. or your
successors (hereinafter referred to as "you" or "your", or "SB"), that;
1. All transactions entered into under this Agreement shall be subject to any
applicable constitution, rules, regulations, customs and usages of the exchange
or market and its clearinghouse, if any, where such transactions are executed
by SB or its agents and to all applicable laws, rules and regulations of
governmental authorities and self-regulatory agencies. Such reference to the
"constitution, rules, regulations, customs and usages of the exchange" shall in
no way be construed to create a cause of action arising from any violation of
such constitution, rules, regulations, customs and usages. If any provision is
enacted that would be inconsistent with any of the provisions of this
Agreement, the provision so affected shall be deemed modified or superseded by
the enactment, but the remaining provisions of this Agreement shall remain in
effect. Except as herein provided, no provision of this Agreement may be
waived, altered, modified or amended unless the same is in writing and signed
by an authorized official of SB.
2. I agree that all property of mine, whether owned individually, jointly or
in the name of another, which at any time may be in your possession or control
for any purpose, including safekeeping, shall be subject to a continuing
security interest, lien and right of set-off for the discharge of all of my
indebtedness and other obligations to SB, and will be held by SB as security
for the payment of any of my indebtedness or obligations to SB. In enforcing
your security interest, you shall have the discretion to determine which
property is to be sold and the order in which it is to be sold and shall have
all the rights and remedies available to a secured party under the
<PAGE> 5
New York Uniform Commercial Code. Without your prior written consent, I will
not cause or allow any of the collateral held in my account(s), whether now
consent, I will not cause or allow any of the collateral held in my account(s),
whether now owned or hereafter acquired, to be or become subject to any liens,
security interests, mortgages or encumbrances of any nature other than your
security interest.
Without limiting the generality of the foregoing, I hereby authorize SB to
automatically liquidate any money market funds available in my account(s) from
time to time to cover any of my indebtedness or obligations to SB including
non-trade related debts. You are further authorized to liquidate any other
property held in my account(s) to satisfy any such indebtedness or obligations
whenever in your discretion you consider it necessary for your protection.
"Property" as used anywhere in this Agreement shall include, but not be limited
to, securities of all kinds, money, certificates of deposit, bankers'
acceptances, commercial paper, options, commodities, and contracts for the
future delivery of commodities or relating to commodities or securities, and
the distributions, proceeds, products and accessions of any of the above.
3. In case of the sale of any security, commodity, or other property at my
direction and the inability of SB to deliver the same to the purchaser by
reason of my failure to supply them to SB, I authorize SB to borrow any
security, commodity, or other property necessary to make delivery thereof, and
I hereby agree to be responsible for any loss which SB may sustain thereby and
any premiums, interest or other costs which SB may be required to pay as a
result of such borrowing, and for any loss or cost which SB may sustain by
reason of its inability to borrow the security, commodity, or other property
sold.
You may charge my account(s) with such usual and customary charges as you may
determine to cover your services and facilities, including, but not limited to,
custody and transaction fees. I will promptly pay SB any deficiency that might
arise in my account(s). I understand and agree that a finance charge may be
charged on any debit balance in any cash account I have with SB in accordance
with the SB policy described in the accompanying literature regarding new
accounts. You may transfer excess funds between any of my accounts (including
commodity accounts) for any reason not in conflict with the Commodity Exchange
Act or any other applicable law. If any transactions are effected on an
exchange in which a foreign currency is used, any profit or loss as a result of
a fluctuation in the exchange rate will be charged or credited to my
account(s).
<PAGE> 6
4. Communications may be sent to the mailing address on file with you, or at
such other address as I may hereafter give in writing, and all communications
so sent, whether by mail, telegraph, messenger or otherwise, shall be deemed
given to me personally, whether actually received or not. Transactions entered
into for my account(s) shall be confirmed in writing to me where required by
applicable law or regulation. In addition, SB shall provide me with periodic
statements reflecting activity in such account(s). I agree the transactions
reflected on such confirmations and statements shall be conclusively deemed
accurate as stated unless I notify SB in writing within three (3) days and ten
(10) days of receipt, respectively, that the information contained in such
confirmation or statement is inaccurate. Such notice must be sent by me to SB
by telegram or letter directed to the attention of the Branch Office Manager of
the office servicing the account. Failure to so notify SB shall also preclude
me from asserting at any later date that such transaction was unauthorized.
I authorize you at your discretion to obtain reports and to provide information
to others concerning my credit standing and my business conduct. You may ask
credit reporting agencies for consumer reports of my credit history. Upon my
request you will inform me whether you have obtained any such consumer reports
and if you have, you will inform me of the name and address of the consumer
reporting agency that furnished the reports to you.
5. I hereby represent that I am of the age of majority. Unless I advise you
to the contrary, in writing, and provide you with a letter of approval from my
employer, where required, I represent that I am not an employee of any
exchange, or of any corporation of which any exchange owns a majority of the
capital stock, or of a member of any exchange, or of a member firm or member
corporation registered on any exchange, or of any corporation, firm or
individual engaged in the business of dealing, either as a broker or as
principal, in securities, bills of exchange, acceptances or other forms of
commercial paper. I further represent that no one except those signing this
agreement has an interest in my account.
If my account has been introduced to you and is carried by you only as a
clearing broker, I agree that you are not responsible for the conduct of the
introducing broker and your only responsibilities to me relate to the
execution, clearing and bookkeeping of transactions in my accounts.
6. 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
<PAGE> 7
different from court proceedings.
The arbitrators' award is not required to include factual findings or legal
reasoning, and any party's right to appeal or to seek modification of rulings
by the arbitrators is strictly limited.
The panel of arbitrators will typically include a minority of arbitrators who
were or are affiliated with the securities industry.
I agree that all claims or controversies, whether such claims or controversies
arose prior, on or subsequent to the date hereof, between me and SB and/or any
of its present or former officers, directors, or employees concerning or
arising from (i) any account maintained by me with SB individually or jointly
with others in any capacity; (ii) any transaction involving SB or any
predecessor firms by merger, acquisition or other business combination and me,
whether or not such transaction occurred in such account or accounts; or (iii)
the construction, performance or breach of this or any other agreement between
us, any duty arising from the business of SB or otherwise, shall be determined
by arbitration before, and only before, any self-regulatory organization or
exchange of which SB is a member. I may elect which of these arbitration
forums shall hear the matter by sending a registered letter or telegram
addressed to Smith Barney Inc. at 388 Greenwich Street, New York, N.Y. 10013-
2396, Attn: Law Department. If I fail to make such election before the
expiration of five (5) days after receipt of a written request from SB to make
such election, SB shall have the right to choose the forum.
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 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.
The foregoing agreement to arbitrate does not entitle me to obtain arbitration
of claims that would be barred by the relevant statutes of limitations if such
claims were brought in a court of competent jurisdiction. If, at the time that
a demand for arbitration is made or an election or notice of intention to
arbitrate is served, the claims sought to be arbitrated would have been barred
by the relevant statute of limitations or other time bar, any party to this
Agreement may assert the limitations
<PAGE> 8
as a bar to the arbitration by applying to any court of competent jurisdiction,
and I expressly agree that any issues relating to the application of a statute
of limitations or other time bar, are referable to such court. The failure to
assert such bar by application to a court, however, shall not preclude its
assertion before the arbitrators.
7. The provisions of this Agreement shall be continuous, shall cover
individually and collectively all accounts which I may open or reopen with SB,
and shall inure to the benefit of SB's present organization, and any successor
organization or assigns. Should any term or provision of this Agreement be
deemed or held to be invalid or unenforceable, the remaining terms and
provisions shall continue in full force and effect. This Agreement, all the
terms herein, and all controversies described in Paragraph 6 shall be governed
and construed in accordance with the laws of the State of New York, including,
but not limited to, the law of New York regarding the permissible rates of
interest that may be charged and the law of New York regarding damages
recoverable in arbitration, without giving effect to principles of conflicts of
law. This choice of law clause shall not govern the choice of statues of
limitations applicable to claims and controversies described in Paragraph 6,
and the statute of limitations applicable to claims and controversies described
in Paragraph 6, and the statute of limitations applicable to any such claim or
controversy shall be that which would be applied by the federal district court
for the district in which I reside.
8. I understand that you may in your sole discretion prohibit or restrict
trading of securities or substitution of securities in any of my accounts. You
have the right to terminate any of my accounts (including multiple owner
accounts) at any time by notice to me. The provisions of this agreement shall
survive the termination of any account.
9. Your failure to insist at any time upon strict compliance with any term of
this Agreement, or any delay or failure on your part to exercise any power or
right given to you in this Agreement, or a continued course of such conduct on
your part shall at no time operate as a waiver of such power or right, nor
shall any single or partial exercise preclude any other further exercise. All
rights and remedies given to you in this Agreement are cumulative and not
exclusive of any other rights or remedies which you otherwise have.
10. I understand that SB shall not be liable for loss caused directly or
indirectly by government restrictions, exchange or market rulings, suspension
of trading, war, strikes or other conditions, commonly known as "acts of God,"
beyond SB's control.
<PAGE> 9
11. From time to time you may at your discretion, make loans to me for a
purpose other than purchasing, carrying or trading in securities ("Express
Credit Loans"). Express Credit Loans will be made in a nonsecurities credit
account ("Express Credit Account"). The minimum and maximum amount of any
particular loan may be established by you in your discretion regardless of the
amount of collateral delivered to you and you may change such minimum and
maximum amounts from time to time.
I agree not to use the proceeds of any Express Credit Loan to purchase, carry
or trade in securities, I also agree not to use Express Credit Loan proceeds
directly or indirectly to repay other debt that I incur for the purpose of
purchasing, carrying or trading in securities.
JOINT ACCOUNT AGREEMENT
PARAGRAPHS 12 THROUGH 14 APPLY ONLY TO JOINT ACCOUNT AGREEMENTS
12. If this is a joint account, in consideration of you and your successors
carrying a joint account on margin or otherwise for the undersigned, each of
use agrees to be jointly and severally liable for said account and to pay on
demand any debit balance of losses at any time due in this account. Any of us
has full power and authority to make purchases and sales, including short
sales, to withdraw monies and securities from, or to do anything less with
reference to our account, either individually or in our joint names, and you
and your successors are authorized and directed to act upon instructions
received from any of us and to accept payment and securities from any of us for
the credit of this account. Any and all notices, communications, or any
demands for margin sent to any of us shall be binding upon all, and may be
given by mail or other means of communication.
13. Each of us agrees to hold SB harmless from and indemnify SB against any
losses, causes of action, damages and expenses arising from or as the result of
SB following the instructions of either or any of us. SB, in its sole
discretion, may at any time suspend all activity in the joint account pending
instructions from a court of competent jurisdiction or require that
instructions pertaining to the joint account or the property therein be in
writing signed by both or all of us. SB shall be entitled to recover from the
account or from any of us prior to distribution of the funds or property
therein such costs as it may incur, including reasonable attorney's fees, as
the result of any dispute between or among us relating to or arising from the
account.
14. Each of us agrees that, in the event of the death of either or any of us,
the survivor or survivors shall immediately give you written notice thereof,
and you may, before or after receiving such notice, take such actions, require
such papers, inheritance or estate tax waivers, retain such portion of the
<PAGE> 10
account as you may deem advisable to protect you against any tax, liability,
penalty or loss under any present or future laws or otherwise. The estate of
either or any of us who shall have died shall be liable and each survivor shall
continue liable, jointly and severally, to you for any net debit balance or
loss in said account in any way resulting from the completion of transactions
initiated prior to the receipt by you of the written notice of the death of the
decedent, or incurred in the liquidation of the account or the adjustment of
the interests of the respective parties.
If this account is a joint tenancy account with rights of survivorship, and not
a tenancy in common, in the event of the death of either or any of us, the
entire interest in the joint tenancy account shall be vested in the survivor or
survivors on the same terms and conditions as previously held, without in any
manner releasing the decedent's estate from the liability provided for herein.
If this account is a tenancy in common, in the event of the death of either or
any of us, the interests in the account shall be determined as specified on the
signature section of this Agreement and shall be held upon the same terms and
conditions as previously held, without in any manner releasing the decedent's
estate from the liability provided for herein.
SB will assume that our account is a joint account with right of survivorship
unless we elect a tenancy in common by completing Section F on Page 1 of this
Agreement
MARGIN AGREEMENT
PARAGRAPHS 15 THROUGH 17 APPLY ONLY TO MARGIN ACCOUNTS
15. You are hereby authorized, without notice to me, and without regard as to
whether or not you have in your possession or under your control at the time
thereof other property of the same kind and amount, to pledge, repledge,
hypothecate or rehypothecate my property or any part thereof, either separately
or together with other property of other clients, either for the amount due you
from me or for a greater sum.
16. I agree to pay ON DEMAND any balance owing with respect to any of my
accounts including interest and commissions and any costs of collection
(including attorneys' fees if incurred by you). I understand that you may
demand full payment of the balance due my account plus any interest charges
accrued thereon, at your sole option, at any time without cause and whether or
not such demand is made for your protection. I understand that all loans made
are not for any specific term or duration but are due and payable at your
discretion upon a demand for payment made to me. I agree that all payments
received from my account(s)
<PAGE> 11
including interest, dividends, premiums, principal or other payments may be
applied by you to any balances due in my account(s). If I maintain both a cash
and a margin account with you, you are authorized in your discretion to utilize
the equity in either type of account in satisfaction of any maintenance margin
requirement without the actual transference of funds or securities between such
accounts.
Whenever you deem it necessary or appropriate for your protection, you are
authorized in your sole discretion, to sell, assign, transfer and deliver all
or any part of my property which may be in your possession or control in any
manner you deem appropriate, make any necessary purchases to cover short sales
and/or any open commodity contract position and/or to cancel any outstanding
orders in order to close out the account. Without limiting the generality of
the foregoing, such sale, purchase or cancellation may be made, in your sole
discretion, on the exchange or other market where such business is then usually
transacted, at public auction or at private sale without advertising the same.
All of the above may be done without demand for margin or notice of purchase,
sale or cancellation to me. No demand for margin, or notice given to me of
intent to purchase or sell property or to cancel orders in my account, shall
impose on you any obligation to make such demand or provide such notice to me.
Any such notice or demand is hereby expressly waived, and no specific demand or
notice shall invalidate this waiver. After deducting all costs and expenses of
the purchase and/or sale and deliveries, including, but not limited to,
commissions and transfer and stamp taxes, you shall apply the residue of the
proceeds to the payment of any and all of my liabilities to you, and I shall
remain liable for an deficiency. Upon any such sale, you may purchase the
whole or any part thereof free from any right of redemption. In the event of
my death or incompetency, the authority given by this Paragraph shall continue
effective and shall be binding upon my personal representatives and heirs.
17. I will at all times maintain such margin for my account maintained by SB,
as SB may require from time to time, and any debit balances arising in such
account shall be charged interest in accordance with the SB policy described in
the accompanying literature regarding new accounts provided by you under Rule
10b-16 of the Securities Exchange Act of 1934, as amended from time to time. I
am aware that interest charges, if not paid, will be added to the debit balance
in my account for the next interest period. I am aware and agree that you may
impose, for my account(s), margin requirements more stringent than those
required by law or exchange regulations. I further understand and agree that
such margin requirements may be changed and modified by you from time to time
without prior notice to me. I further agree that any waiver by your or failure
to promptly
<PAGE> 12
enforce, as to my account or that of others, such margin requirements shall not
in any way prevent you from subsequently enforcing said margin requirements
with regard to my account.
