<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Amendment No. 1
Under the Securities Exchange Act of 1934
(Amendment No. ______)*
Data Systems & Software Inc.
----------------------------
(Name of Issuer)
Common Stock, $0.01 par value
------------------------------
(Title of Class of Securities)
237887104
--------------
(CUSIP Number)
Mr. Yacov Kaufman
200 Route 17, Mahwah, New Jersey 07430
-------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 8, 1997
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(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. [ ]
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 65 pages
PAGE
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CUSIP No.: 237887104 13D Page 2 of 65 Pages
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1. Name of reporting person: Cummer/Moyers Holdings, Inc.
IRS Identification No. of above person: 75-2354593
2. Check the appropriate box if a member (a) [X]
of a group (b) [ ]
3. SEC use only ________________________
4. Source of funds: WC
5. Check box if disclosure of legal proceedings is required
pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or place of organization: Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. Sole voting power: 0
8. Shared voting power: 207,000 shares
9. Sole dispositive power: 0
10. Shared dispositive power: 389,800 shares
11. Aggregate amount beneficially owned by each reporting person:
389,800 shares
12. Check box if the aggregate amount in Row (11) excludes certain
shares: [ ]
13. Percent of class represented by amount in Row (11): 5.29%
14. Type of reporting person: CO
PAGE
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CUSIP No.: 237887104 13D Page 3 of 65 Pages
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1. Name of reporting person: Cummer/Moyers Capital Advisors, Inc.
IRS Identification No. of above person: 75-2681494
2. Check the appropriate box if a member (a) [X]
of a group (b) [ ]
3. SEC use only ________________________
4. Source of funds: WC
5. Check box if disclosure of legal proceedings is required
pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or place of organization: Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. Sole voting power: 0
8. Shared voting power: 0
9. Sole dispositive power: 0
10. Shared dispositive power: 182,800 shares
11. Aggregate amount beneficially owned by each reporting person:
182,800 shares
12. Check box if the aggregate amount in Row (11) excludes certain
shares: [X]
13. Percent of class represented by amount in Row (11): 2.48%
14. Type of reporting person: IA
PAGE
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CUSIP No.: 237887104 13D Page 4 of 65 Pages
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1. Name of reporting person: Cummer/Moyers Capital Partners, Inc.
IRS Identification No. of above person: 75-2551678
2. Check the appropriate box if a member (a) [X]
of a group (b) [ ]
3. SEC use only ________________________
4. Source of funds: WC
5. Check box if disclosure of legal proceedings is required
pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or place of organization: Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. Sole voting power: 0
8. Shared voting power: 207,000 shares
9. Sole dispositive power: 0
10. Shared dispositive power: 207,000 shares
11. Aggregate amount beneficially owned by each reporting person:
207,000 shares
12. Check box if the aggregate amount in Row (11) excludes certain
shares: [X]
13. Percent of class represented by amount in Row (11): 2.81%
14. Type of reporting person: CO
PAGE
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CUSIP No.: 237887104 13D Page 5 of 65 Pages
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1. Name of reporting person: Jeffrey A. Cummer
IRS Identification No. of above person:
2. Check the appropriate box if a member (a) [X]
of a group (b) [ ]
3. SEC use only ________________________
4. Source of funds: PF
5. Check box if disclosure of legal proceedings is required
pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or place of organization: United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. Sole voting power: 1,800 shares
8. Shared voting power: 217,000 shares
9. Sole dispositive power: 1,800 shares
10. Shared dispositive power: 399,800 shares
11. Aggregate amount beneficially owned by each reporting person:
401,600 shares
12. Check box if the aggregate amount in Row (11) excludes certain
shares: [X]
13. Percent of class represented by amount in Row (11): 5.45%
14. Type of reporting person: IN
PAGE
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CUSIP No.: 237887104 13D Page 6 of 65 Pages
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1. Name of reporting person: Dwayne A. Moyers
IRS Identification No. of above person:
2. Check the appropriate box if a member (a) [X]
of a group (b) [ ]
3. SEC use only ________________________
4. Source of funds: PF
5. Check box if disclosure of legal proceedings is required
pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or place of organization: United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. Sole voting power: 11,600 shares
8. Shared voting power: 217,000 shares
9. Sole dispositive power: 11,600 shares
10. Shared dispositive power: 399,800 shares
11. Aggregate amount beneficially owned by each reporting person:
411,400 shares
12. Check box if the aggregate amount in Row (11) excludes certain
shares: [X]
13. Percent of class represented by amount in Row (11): 5.58%
14. Type of reporting person: IN
PAGE
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CUSIP No.: 237887104 13D Page 7 of 65 Pages
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1. Name of reporting person: Cummer/Moyers Holdings, Inc. Profit
Sharing Plan
IRS Identification No. of above person: 75-2625318
2. Check the appropriate box if a member (a) [X]
of a group (b) [ ]
3. SEC use only ________________________
4. Source of funds: PF
5. Check box if disclosure of legal proceedings is required
pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or place of organization: Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. Sole voting power: 10,000 shares
8. Shared voting power: 0
9. Sole dispositive power: 10,000 shares
10. Shared dispositive power: 0
11. Aggregate amount beneficially owned by each reporting person:
10,000 shares
12. Check box if the aggregate amount in Row (11) excludes certain
shares: [ ]
13. Percent of class represented by amount in Row (11): 0.14%
14. Type of reporting person: EP
PAGE
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DATA SYSTEMS & SOFTWARE INC.
SCHEDULE 13D
ITEM 1. Security and Issuer
The class of securities to which this statement relates is the
common stock, par value $0.01 per share (the "Common Stock"), of
Data Systems & Software Inc., a Delaware corporation (the "Issu-
er"), which has its principal executive offices located at 200
Route 17, Mahwah, New Jersey 07430.
ITEM 2. Identity and Background
This statement is being filed by the following beneficial
owners of 413,200 shares of Common Stock (approximately 5.61%) of
the total number of shares of Common Stock outstanding as of
October 31, 1997 (collectively referred to as the "Reporting
Persons"):
Cummer/Moyers Holdings, Inc. ("Holdings") is a holding
company incorporated on November 30, 1990 under the laws
of the state of Texas and is principally engaged,
through its wholly-owned subsidiary, Cummer/Moyers
Securities, Inc., in the securities business. Holdings,
through its other subsidiaries, also provides investment
advisory and other financial services to its clients.
The address of its principal business is 3417 Hulen
Street, Fort Worth, Texas 76107.
Cummer/Moyers Capital Partners, Inc. ("Capital
Partners") is a Texas corporation which serves as the
corporate general partner of Investors Strategic
Partners I, Ltd., a Texas limited partnership which
operates as an investment limited partnership, investing
primarily in equity securities (the "Partnership"). As
the corporate general partner of the Partnership,
Capital Partners provides management services to the
Partnership and in this capacity is responsible for
investment decisions, portfolio management, and trading
activities. Capital Partners is a wholly-owned
subsidiary of Holdings. The address of its principal
business is 3417 Hulen Street, Fort Worth, Texas 76107.
Cummer/Moyers Capital Advisors, Inc. ("Advisors") is a
Texas corporation which is engaged in the business of
providing investment advisory services. Advisors is an
investment advisor registered with the Securities and
Exchange Commission and is also a wholly-owned
subsidiary of Capital Partners. The address of its
principal business is 3417 Hulen Street, Fort Worth,
Texas 76107.
Jeffrey A. Cummer ("Mr. Cummer"), whose business address
is 3417 Hulen Street, Fort Worth, Texas 76107, serves as
the President and a Director of Holdings and its subsid-
iaries Cummer/Moyers Securities, Inc. ("Securities"),
Capital Partners and Advisors. Mr. Cummer is also a
general partner of Capital Partners. Mr. Cummer is a
United States citizen.
Page 8 of 65 pages
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Dwayne A. Moyers ("Mr. Moyers"), whose business address
is 3417 Hulen Street, Fort Worth, Texas 76107, serves as
the Vice President, Secretary, Treasurer and a Director
of Holdings and its subsidiaries Securities, Capital
Partners and Advisors. Mr. Moyers is also a general
partner of Capital Partners. Mr. Moyers is a United
States citizen.
The Cummer/Moyers Holdings Inc. Profit Sharing Plan (the
"Plan") is the profit sharing plan established for the
benefit of the employees of Holdings and its subsidiar-
ies. Mr. Cummer and Mr. Moyers serve as trustees of the
Plan.
During the past five years, the Reporting Persons (Holdings,
Capital Partners, Advisors, Mr. Cummer, Mr. Moyers and the Plan)
have 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 were or are subject
to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activity subject to, federal or
state securities laws or finding any violations with respect to
such laws.
The affiliate of the Reporting Persons is as follows:
Securities is a Texas corporation which is engaged in
the securities brokerage business, and is a wholly-owned
subsidiary of Holdings. Securities is registered as a
broker/dealer with the Securities and Exchange
Commission and the National Association of Securities
Dealers, Inc. Mr. Cummer and Mr. Moyers are the
officers and directors of Securities. The address of
its principal business is 3417 Hulen Street, Fort Worth,
Texas 76107.
During the past five years, Securities 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
activity subject to, federal or state securities laws or finding
any violations with respect to such laws.
Attached hereto as Schedule 1 and incorporated by reference
herein is a table setting forth each of the Reporting Persons, together
with their respective addresses and beneficial ownership of the Common Stock.
Page 9 of 65 pages
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Pursuant to Rule 13d-4 of the Securities Exchange Act of 1934,
each Reporting Person hereby expressly declares that the filing of
this statement is not an admission that such Reporting Person is
the beneficial owner of any shares of Common Stock other than those
listed on Schedule 1 as being beneficially owned by such Reporting
Person. The Reporting Persons disclaim beneficial ownership of
85,470 shares of Common Stock of the Issuer held as non-discretion-
ary client accounts at Securities.
ITEM 3. Source and Amount of Funds or Other Consideration
Prior to July 1997, Mr. Cummer served as a registered princi-
pal and branch manager of Investment Management and Research, Inc.
("IMR") and Mr. Moyers served as a registered representative of
IMR. IMR is a wholly-owned subsidiary of Raymond James Financial,
Inc., a Florida based holding company which offers a wide range of
financial services to individual, corporate, governmental and
institutional clients through its various subsidiaries. In these
capacities Mr. Cummer and Mr. Moyers acquired approximately 176,750
shares of Common Stock on behalf of discretionary client accounts
held by IMR. The source of funds used by Mr. Cummer and Mr. Moyers
to acquire the 176,750 shares of Common Stock are funds contributed
into the discretionary accounts by the account holders. Following
the formation of Advisors and Securities by Holdings and the
termination of Mr. Cummer's and Mr. Moyers' relationship with IMR
in July 1997, these account holders transferred their discretionary
client accounts to Securities and established an investment
advisory relationship with Advisors. Advisors also purchased
additional shares of Common Stock on behalf of various discretion-
ary client accounts established at Securities. The 182,800 shares
were acquired since December 1995 at prices ranging from $4.875 to
$8.50 per share.
The source of funds used by Capital Partners to acquire
207,000 shares of Common Stock on behalf of the Partnership are the
capital contributions made by the limited partners to the Partner-
ship. Capital Partners purchased the 207,000 shares in numerous
separate transactions from December 29, 1995 to December 2, 1997 at
prices ranging from $4.7375 to $8.75 per share.
The source of funds used by Mr. Cummer to acquire 1,800 shares
of Common Stock was Mr. Cummer's personal funds. Mr. Cummer
purchased the 1,800 shares in a single transaction on November 25,
1997 at a price of $5.125 per share for a total amount of $9,225.
The source of funds used by Mr. Moyers to acquire 11,600
shares of Common Stock on behalf of the Dwayne A. Moyers IRA was
Mr. Moyers' personal funds. Mr. Moyers, as the custodian of his
IRA, purchased the 11,600 shares in eight separate transactions
from December 28, 1995 to July 7, 1997 at prices ranging from
$4.8661 to $7.50 per share for a total amount of approximately
$68,844.
Page 10 of 65 pages
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The source of funds used by the Plan to acquire 10,000 shares
of Common Stock was the contributions to the Plan made by the
employees of Holdings and its subsidiaries. The Plan purchased the
10,000 shares in eight separate transactions from March 15, 1996 to
June 13, 1997 at prices ranging from $5.00 to $6.625 per share for
a total amount of approximately $55,876.
ITEM 4. Purpose of Transaction
On August 12, 1997, the Reporting Persons acquired more than
five percent (5%) of the issued and outstanding shares of Common
Stock of the Issuer. The original purpose of the acquisition of
the Common Stock of the Issuer by the Reporting Persons was for
investment purposes. The Reporting Persons are currently consider-
ing either acquiring additional shares of Common Stock of the
Issuer up to a specified level (not yet determined) or affiliating
with other existing shareholders of the Issuer for the express
purpose of bringing about certain fundamental corporate changes in
the Issuer in order to increase shareholder value. Such fundamen-
tal corporate changes may involve a change in the membership of the
Board of Directors of the Issuer or in its management. Dwayne A.
Moyers intends to initiate discussions with other shareholder
groups to attain these goals.
ITEM 5. Interest in Securities of the Issuer
The Reporting Persons beneficially own 413,200 shares of the
class of securities identified in Item 1 which is 5.61% of such
class of securities. The information contained in Schedule 1
hereto regarding the aggregate number and percentage of the class
of securities identified in Item 1 beneficially owned by each
Reporting Person is incorporated herein by reference.
The Issuer reported on its Form 10-Q for the quarter ending
September 30, 1997 that it had 7,369,178 shares of Common Stock
outstanding as of October 31, 1997. None of the Reporting Persons
nor their affiliates have any options or warrants to purchase
shares of Common Stock of the Issuer.
The information contained in Schedule 1 hereto regarding the
power to vote or dispose of securities identified in Item 1
beneficially owned by the Reporting Persons is incorporated herein
by reference. All shares of Common Stock owned by a Reporting
Person who is an individual is subject to such Reporting Person's
sole power to vote and dispose of such shares of Common Stock. All
voting and disposition decisions concerning shares of Common Stock
owned by a Reporting Person that is a corporation will be made by
the majority vote of the Board of Directors of such Reporting
Person, except as provided below:
Page 11 of 65 pages
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Advisors has dispositive power but not voting power over
182,800 shares of Common Stock. These shares are held
in discretionary accounts and voting control over these
shares has been retained by the discretionary account
holders who have contracted with Advisors for investment
advisory services. However, as the investment advisor
with respect to the 182,800 shares held in such discre-
tionary accounts, Advisors will be able to advise the
account holders with respect to the voting of such
shares. Advisors, however, has no existing arrangements
or understanding, whether oral or written, with such
account holders with respect to the voting of such
shares. Copies of the form of contracts for advisory
services entered into by Advisors and the discretionary
account holders are attached as Exhibits B-1, B-2 and
B-3.
The management and control of the Partnership is vested
exclusively in Capital Partners, Mr. Cummer and Mr.
Moyers as the general partners of the Partnership. In
such capacities Capital Partners, Mr. Cummer and Mr.
Moyers have voting and dispositive power over all
securities acquired by the Partnership. A copy of the
Investors Strategic Partners I, Ltd. Limited Partnership
Agreement is attached hereto as Exhibit C and by reference
made a part hereof.
All voting and disposition decisions concerning shares of
Common Stock owned by the Plan will be made by the trustees of the
Plan, Mr. Cummer and Mr. Moyers.
None of the Reporting Persons effected any transactions in
shares of Common Stock of the Issuer within the sixty (60) days
prior to the date of the event requiring the filing of this
statement, except for:
6,050 shares acquired by Advisors on the open market at prices
ranging from $5.00 to $6.50 per share from October 14, 1997 to
November 7, 1997:
10-14-97 bought 750 shares at $6.50
10-22-97 bought 3,000 shares at $6.25
11-03-97 bought 600 shares at $5.00
11-03-97 bought 1,000 shares at $5.00
11-07-97 bought 700 shares at $5.75
57,000 shares acquired by Capital Partners on the open market at
prices ranging from $4.875 to $5.3125 per share in six transactions
from October 15, 1997 to December 2, 1997:
10-15-97 bought 5,000 shares at $5.25
11-03-97 bought 25,000 shares at $5.00
11-12-97 bought 7,000 shares at $5.3125
11-12-97 bought 10,000 shares at $4.7375
11-27-97 bought 3,000 shares at $4.875
12-02-97 bought 7,000 shares at $4.875
Page 12 of 65 pages
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25,000 shares sold by Capital Partners on the open market at $5.375
per share in two transactions on November 6, 1997:
11-06-97 sold 10,000 shares at $5.375
11-06-97 sold 15,000 shares at $5.375
1,800 shares acquired by Mr. Cummer on the open market at $5.125
per share on November 25, 1997.
300 shares sold by Mr. Moyers on the open market at $4.6875 per
share on November 14, 1997.
The Reporting Persons know of no other person who has a right
to receive or the power to direct receipt of dividends or proceeds
from the sale of the securities of the Issuer that are the subject
of this Schedule 13D.
The Reporting Persons have not ceased to be subject to the
reporting requirements of Schedule 13D during the period of this
statement.
ITEM 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer
Except as set forth below, there are no contracts, arrange-
ments, understandings or relationships among the Reporting Persons
or between any of the Reporting Persons and any other person with
respect to any securities of the Issuer.
Advisors has entered into agreements with Securities and its
customers regarding the provision of discretionary investment
advisory services on behalf of such customers. Pursuant to such
agreements Advisors has the sole investment authority with regard
to assets in such customer accounts, while voting control has been
retained by the holders of such accounts. See Exhibits B-1, B-2
and B-3.
Capital Partners serves as the corporate general partner of
the Partnership, and Mr. Cummer and Mr. Moyers serve as the
individual general partners of the Partnership. In these capaci-
ties, Capital Partners, Mr. Cummer and Mr. Moyers have the sole and
exclusive right to buy and sell securities on behalf of the
Partnership and to vote same. Capital Partners', Mr. Cummer's and
Mr. Moyers' authority is set forth in the Limited Partnership
Agreement. See Exhibit C.
Page 13 of 65 pages
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ITEM 7. Material to be Filed as Exhibits
Except as set forth below, there are no exhibits required to
be filed as part of this Schedule 13D.
Exhibit A Joint Acquisition Statement
Exhibit B-1 Cummer/Moyers Capital Advisors
Cummer/Moyers Securities
Platinum Account
Exhibit B-2 Cummer/Moyers Capital Advisors, Inc.
Cummer/Moyers Securities
Managed Account Service Agreement
Exhibit B-3 Cummer/Moyers Capital Advisors
Cummer/Moyers Securities
Managed Investment Program Agreement
Exhibit C Investors Strategic Partners I, Ltd. Limited
Partnership Agreement
Page 14 of 65 pages
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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.
CUMMER/MOYERS HOLDINGS, INC.
Dated: February 10, 1998 /s/ Jeffrey A. Cummer
---------------------
Jeffrey A. Cummer, President
Dated: February 10, 1998 /s/ Dwayne A. Moyers
--------------------
Dwayne A. Moyers, Vice President,
Secretary and Treasurer
CUMMER/MOYERS CAPITAL ADVISORS, INC.
Dated: February 10, 1998 /s/ Jeffrey A. Cummer
---------------------
Jeffrey A. Cummer, President
Dated: February 10, 1998 /s/ Dwayne A. Moyers
--------------------
Dwayne A. Moyers, Vice President,
Secretary and Treasurer
CUMMER/MOYERS CAPITAL PARTNERS, INC.
Dated: February 10, 1998 /s/ Jeffrey A. Cummer
---------------------
Jeffrey A. Cummer, President
Dated: February 10, 1998 /s/ Dwayne A. Moyers
--------------------
Dwayne A. Moyers, Vice President,
Secretary and Treasurer
Dated: February 10, 1998 /s/ Jeffrey A. Cummer
---------------------
Jeffrey A. Cummer
Dated: February 10, 1998 /s/ Dwayne A. Moyers
--------------------
Dwayne A. Moyers
CUMMER/MOYERS HOLDINGS, INC. PROFIT
SHARING PLAN
Dated: February 10, 1998 /s/ Jeffrey A. Cummer
---------------------
Jeffrey A. Cummer, Trustee
Dated: February 10, 1998 /s/ Dwayne A. Moyers
--------------------
Dwayne A. Moyers, Trustee
Page 15 of 65 pages
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EXHIBIT INDEX
Exhibit Document
- ------- --------
A Joint Acquisition Statement
B-1 Cummer/Moyers Capital Advisors
Cummer/Moyers Securities
Platinum Account
B-2 Cummer/Moyers Capital Advisors, Inc.
Cummer/Moyers Securities
Managed Account Service Agreement
B-3 Cummer/Moyers Capital Advisors
Cummer/Moyers Securities
Managed Investment Program Agreement
C Investors Strategic Partners I, Ltd.
Limited Partnership Agreement
Page 16 of 65 pages
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Schedule 1
Reporting Persons and Beneficial Ownership
<TABLE>
<CAPTION>
Address of
Principal Principal Amount
Name of Business Office Business or Beneficially Percent
Reporting Person or Residence Occupation Owned of Class
- --------------------- -------------------- ---------- ------------ --------
<S> <C> <C> <C> <C>
Cummer/Moyers Holdings, 3417 Hulen Street
Inc. Fort Worth, TX 76107 (1) 389,800 (2) 5.29%
Cummer/Moyers Capital 3417 Hulen Street
Advisors, Inc. Fort Worth, TX 76107 (3) 182,800 (4) 2.48%
Cummer/Moyers Capital 3417 Hulen Street
Partners, Inc. Fort Worth, TX 76107 (5) 207,000 (6) 2.81%
Jeffrey A. Cummer 3417 Hulen Street
Fort Worth, TX 76107 (7) 401,600 (8) 5.45%
Dwayne A. Moyers 3417 Hulen Street
Fort Worth, TX 76107 (9) 411,400 (10) 5.58%
Cummer/Moyers Holdings, 3417 Hulen Street
Inc. Profit Sharing Plan Fort Worth, TX 76107 (11) 10,000 (12) 0.14%
</TABLE>
<TABLE>
<CAPTION>
Number of Shares as
to Which Such Person Has
-----------------------------------------------------------
Sole Power Shared Sole Power Shared Power
to Vote or Power to to Dispose to Dispose
Name of to Direct Vote or to or to Direct or to Direct
Reporting Person Vote Direct Vote Disposition Disposition
- ---------------------- ---------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Cummer/Moyers Holdings,
Inc. 0 207,000 0 389,800
Cummer/Moyers Capital
Advisors, Inc. 0 0 0 182,800
Cummer/Moyers Capital
Partners, Inc. 0 207,000 0 207,000
Jeffrey A. Cummer 1,800 217,000 1,800 399,800
Dwayne A. Moyers 11,600 217,000 11,600 399,800
Cummer/Moyers Holdings,
Inc. Profit Sharing Plan 10,000 0 10,000 0
</TABLE>
1 Cummer/Moyers Holdings, Inc. ("Holdings") is principally engaged,
through its wholly-owned subsidiary, Cummer/Moyers Securities, Inc.
("Securities"), in the securities business, and through its other
subsidiaries also provides investment advisory and other financial
services to its clients.
2 Includes 182,800 shares held in discretionary accounts of clients of
Securities, regarding which Cummer/Moyers Capital Advisors, Inc.
("Advisors") has shared dispositive powers; and 207,000 shares owned
by Investors Strategic Partners I, Ltd., a Texas limited partnership
(the "Partnership"), which operates as an investment limited
partnership, investing primarily in equity securities, over which
Cummer/Moyers Capital Partners, Inc. ("Partners"), Jeffrey A. Cummer
and Dwayne A. Moyers have shared voting and dispositive powers as the
general partners of the Partnership. As the sole shareholder of
Advisors and Partners, Holdings is deemed to have shared voting
and/or dispositive powers regarding the shares over which its
subsidiaries exercise such powers.
3 Cummer/Moyers Capital Advisors, Inc. is engaged in the business of
providing investment advisory services.
4 Represents 182,800 shares held in discretionary accounts of clients
of Securities, regarding which Advisors has shared dispositive
powers. Voting control over these shares has been retained by the
discretionary account holders who have contracted with Advisors for
investment advisory services.
5 Cummer/Moyers Capital Partners, Inc. serves as the corporate general
partner of the Partnership.
6 Represents 207,000 shares owned by the Partnership, over which
Partners, Mr. Cummer and Mr. Moyers have shared voting and
dispositive powers as the general partners of the Partnership.
Page 17 of 65 pages
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7 Jeffrey A. Cummer serves as the President and a Director of
Cummer/Moyers Holdings, Inc. and its subsidiaries Cummer/Moyers
Securities, Inc., Cummer/Moyers Capital Partners, Inc. and
Cummer/Moyers Capital Advisors, Inc.
8 Includes 1,800 shares owned of record over which Mr. Cummer has sole
voting and dispositive powers; 182,800 shares held in discretionary
accounts of clients of Securities regarding which Advisors has shared
dispositive powers and regarding which Mr. Cummer has shared
dispositive powers as a director and officer of Advisors; 207,000
shares owned by the Partnership regarding which Mr. Cummer has
shared voting and dispositive powers as a director and officer of
Partners, the corporate general partner of the Partnership, and as
an individual general partner of the Partnership; and 10,000 shares
held by the Cummer/Moyers Holdings, Inc. Profit Sharing Plan (the
"Plan") regarding which Mr. Cummer has shared voting and dispositive
powers as a trustee of the Plan.
9 Dwayne A. Moyers serves as the Vice President, Secretary, Treasurer
and a Director of Cummer/Moyers Holdings, Inc. and its subsidiaries
Cummer/Moyers Securities, Inc., Cummer/Moyers Capital Partners, Inc.
and Cummer/Moyers Capital Advisors, Inc.
10 Includes 11,600 shares owned by the IRA for Dwayne A. Moyers
regarding which Mr. Moyers has sole voting and dispositive powers;
182,800 shares held in discretionary accounts of clients of Securities
regarding which Advisors has shared dispositive powers and regarding
which Mr. Moyers has shared dispositive powers as a director and
officer of Advisors; 207,000 shares owned by the Partnership regarding
which Mr. Moyers has shared voting and dispositive powers as a
director and officer of Partners, the corporate general partner of
the Partnership, and as an individual general partner of the
Partnership; and 10,000 shares held by the Plan regarding which
Mr. Moyers has shared voting and dispositive powers as a trustee of
the Plan.
11 The Cummer/Moyers Holdings Inc. Profit Sharing Plan is the profit
sharing plan established for the benefit of the employees of
Cummer/Moyers Holdings, Inc. and its subsidiaries.
12 Represents 10,000 shares owned by employees of Cummer/Moyers Holdings,
Inc. and its subsidiaries over which the Plan has sole voting and
dispositive powers.
Page 18 of 65 pages
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EXHIBIT A
JOINT ACQUISITION STATEMENT
The undersigned each hereby acknowledge that the statement on
Schedule 13D to which this Joint Acquisition Statement is attached is
filed on behalf of each of the undersigned.
CUMMER/MOYERS HOLDINGS, INC.
Dated: February 10, 1998 /s/ Jeffrey A. Cummer
---------------------
Jeffrey A. Cummer, President
Dated: February 10, 1998 /s/ Dwayne A. Moyers
--------------------
Dwayne A. Moyers, Vice President,
Secretary and Treasurer
CUMMER/MOYERS CAPITAL ADVISORS, INC.
Dated: February 10, 1998 /s/ Jeffrey A. Cummer
---------------------
Jeffrey A. Cummer, President
Dated: February 10, 1998 /s/ Dwayne A. Moyers
--------------------
Dwayne A. Moyers, Vice President,
Secretary and Treasurer
CUMMER/MOYERS CAPITAL PARTNERS, INC.
Dated: February 10, 1998 /s/ Jeffrey A. Cummer
---------------------
Jeffrey A. Cummer, President
Dated: February 10, 1998 /s/ Dwayne A. Moyers
--------------------
Dwayne A. Moyers, Vice President,
Secretary and Treasurer
Dated: February 10, 1998 /s/ Jeffrey A. Cummer
---------------------
Jeffrey A. Cummer
Dated: February 10, 1998 /s/ Dwayne A. Moyers
--------------------
Dwayne A. Moyers
CUMMER/MOYERS HOLDINGS, INC. PROFIT
SHARING PLAN
Dated: February 10, 1998 /s/ Jeffrey A. Cummer
---------------------
Jeffrey A. Cummer, Trustee
Dated: February 10, 1998 /s/ Dwayne A. Moyers
--------------------
Dwayne A. Moyers, Trustee
Page 19 of 65 pages
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EXHIBIT B-1
Cummer/Moyers Capital Advisors
Cummer/Moyers Securities
Platinum Account
PAGE
<PAGE>
Cummer/Moyers Securities
Cummer/Moyers Capital Advisors
Managed Service Agreement
Platinum Account
Client Name(s):____________________________ ____________________________
Investment Adviser (Manager)
Address: __________________________________
__________________________________
__________________________________
BY Signing below, the above named party (hereinafter referred to as
"Client") and upon opening the account, Cummer Moyers Capital Advisors
Inc., a registered investment adviser (hereinafter referred to as
"CMCA"), and Cummer/Moyers Securities (hereinafter referred to as
"CMS"), a registered broker/dealer, enter into this agreement.
The Parties Hereto Agree As Follows:
1. Appointment of Investment Manager - Client hereby appoints
Cummer/Moyers Capital Advisors Inc., (hereinafter referred to as
"Manager"), as Client's Investment Manager.
2. Execution Of Services - "CMS" is hereby appointed by Client as sole
and exclusive broker with respect to the referenced account for the
execution of purchase and sale transactions. In the execution of
said transactions, "CMS" may act as agent (including agency cross
transactions with other clients) or as principal on nondiscretionary
transactions.
3. Duties of CMCA - "CMCA" will provide Client, upon acceptance of
Clients account, discretionary investment advisory services
including portfolio reviews and recommendations. Other than the
exceptions listed below, investments which will be included in the
asset value of Client's account for the purpose of calculating the
fee compensation to "CMCA" for advisory services are hereinafter
referred to as PLATINUM "Fee Investments". These Investments
include open-end mutual funds offered with no sales commissions or
load, publicly traded closed-end mutual funds, common and preferred
stocks, American Depository Receipts, options contracts (requires
special approval), real estate investment trusts, corporate bonds,
U.S. Government and Government agency bonds, mortgage backed and
municipal bonds, and any other investment that may, from time to
time, be designated as a Fee Investment.
Manager shall assume all investment duties with respect to assets
held in the Managed Platinum Account and shall have sole investment
authority with respect to such assets. Manager shall invest and
reinvest the assets of the Client to achieve the investment objective
designated by Client. The Manager may take any action or nonaction as
it deems appropriate, with or without consent or authority from the
Client, and may exercise its discretion and invest such assets exactly
as fully and freely as the Client might do as owner, except that the
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Manager is not authorized to withdraw any monies or securities from the
account regardless of the length of time they have been held. The
Manager shall further be free to make investment changes regardless of
the resulting rate of portfolio turnover, when it, in its sole
discretion, shall determine that such changes will promote the
investment objective of the account. Other Investments may be bought or
sold by Client in a PLATINUM account but will be defined as PLATINUM
"Fee Exempt Investments." These investments include new or secondary
securities offerings including brokered certificates of deposit. Should
Client buy any of these securities, Client will pay a commission which
is defined by the terms of the offering as stated in a prospectus for
the security. Said investments will be exempt from inclusion in the
asset value of Client's account subject to "CMCA's" fee for a period of
twelve (12) months from date of purchase in Client's PLATINUM account.
After a twelve (12) month period from the date of purchase, Fee Exempt
Investments will revert to Fee Investments.
"CMCA" will also provide various administrative services which include
determining the fair market value of assets held in Client's PLATINUM
account at least quarterly and producing a portfolio performance report
for Client detailing account assets, account transactions, receipt and
disbursement of funds, interest and dividends received and account gain
or loss by security as well as for the total account. Assets
transferred in the PLATINUM account for administrative services only
will be charged the following annual administrative fee in place of the
normal PLATINUM Fee Investment schedule listed on Schedule A: 0.15% on
the first $200,000 of assets, 0.10% on the next $300,000 and .05% on
assets above $500,000 in total account value.
4. Investment Policy - Client shall designate the investment objective
of the Managed PLATINUM Account. Any changes to the investment
objective shall be provided to Manager in writing.
5 . Securities Custody - At no additional charge, "CMS" shall facilitate
the maintenance of custody of securities positions for the
referenced account through a clearing agent of their choice,
including holding securities in nominee name and crediting interest
and dividends received on said securities to Client's account.
6. Securities Brokerage Remuneration - Client agrees to pay "CMS" for
transaction execution and clearing services based upon a flat fee
per transaction based on the type security involved. No commissions
will be charged by "CMS" on agency trades or markups or markdowns on
principal transactions in PLATINUM Fee Investments. Commissions
will be charged on any investments which are PLATINUM Fee Exempt
Investments, with the exception of the sale of any securities
originally purchased as new or secondary security offerings.
- -------------------------------------------------------------------------------
Schedule of Charges for Execution and Clearing of Transactions
in PLATINUM Fee Investments
Security Type Processing Fee
- ------------- --------------
Stocks: Listed and OTC $30.00
Closed End Mutual Funds $30.00
Mutual Funds* $30.00
Preferred Stocks $50.00
Option Contracts $50.00
Bonds: Government, Corporate, $50.00
Municipal & Mortgage Backed
- -------------------------------------------------------------------------------
-2-
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*Special Exception: The transaction processing charges will be waived by
"CMS" on transactions executed in Client's PLATINUM account in selected
open-end mutual funds which have agreed to compensate "CMS" for
distribution and administrative services through payment of a fee. (See:
"Other Compensation to CMS".) Client will be allowed up to eight (8)
transactions in these mutual funds per twelve (12) month period without
a transaction charge. Purchases of $10,000 or more are exempt from
transaction charges and do not count toward the eight (8) transactions
per twelve (12) month period. Transactions in excess of this stated
limit will be subject to transaction charges on a retroactive basis.
Manager will notify Client of those mutual funds which qualify under
this exception.
IN addition to the foregoing transaction charge, Client will incur a
charge in the amount of $5.00 per transaction for handling and postage
charges. Client may also incur charges for the account services
provided by "CMS" or its clearing agent, not directly related to the
execution an clearing of transactions including, but not limited to, IRA
custodial fees, safekeeping fees, interest charges on margin loans, and
fees for legal or courtesy transfers of securities.
Client understands charges are not commissions but are charged solely to
defray the expenses incurred in facilitating the execution and clearing
of Client's portfolio transactions. In certain circumstances the actual
expense incurred by "CMS" for any given transaction may be less than or
greater than the stipulated charge paid by Client pursuant to this
schedule.
7. CMCA Remuneration - Client will compensate "CMCA" for investment
advisory services on an annual fee basis at the rate set forth in
Schedule A attached hereto. The fee will be payable quarterly in
advance. The initial fee payable to "CMS" will be the prorated
amount due for the initial calendar quarter from the inception of
Client's account. The initial quarterly fee will be calculated
based upon the total asset value of Client's account at inception.
The initial quarterly payment will become due in full on the date
the account is accepted and will be based on the account asset value
as of that date.
Subsequent quarterly fees will be calculated based upon the market value
of Client's PLATINUM Fee Investments on the last business day of the
previous calendar quarter and will become due the following business
day. No fee adjustments will made because of withdrawals made by Client
during the period. Cash or money market investments will be included in
the open-end mutual fund section for billing purposes. Cash or money
market investments which exceed 20% of the total market value of
Client's account at the time of billing will not be included in the
value of Client's account, for fee purposes, making such monies exempt
from "CMCA" fee after initial billing.
"CMS" is hereby authorized to deduct from Client's account any fee owned
to "CMS" pursuant to the terms of this Agreement. All fees paid to
"CMS" will be reported to Client on the quarterly portfolio reports
which will be produced by "CMS" and supplied to Client by "CMS".
8. Limitation of Responsibility - "CMCA" or "CMS" is authorized to
follow the instructions of Client in every respect concerning
Client's account. Client hereby agrees to indemnify and hold "CMS"
and "CMCA", their officers, directors, agents, employees and
affiliates harmless from all loss, costs (including attorneys'
fees), indebtedness and liabilities arising from actions directed by
Client. However, nothing herein shall in any way constitute a
waiver or limitation of any right the client may have under Federal
or State securities laws.
In no event will "CMCA" or "CMS" be obligated to execute any
transaction that it believes would violate any federal or state law,
rule or regulation, or any rule or regulation of any regulatory
body.
-3-
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9. Reports - "CMCA", "CMS", or their clearing agent shall transmit to
the Client the following reports: (1) Trade confirmations reflecting
all transactions in securities; (2) Statements itemizing all
transactions in cash and securities, and all deposits and
withdrawals of principal and income, submitted at least quarterly;
(3) Statements of securities in custody listing securities held in
the account, submitted at least quarterly; and (4) Portfolio
performance reports prepared and submitted on a quarterly basis
summarizing all activity in Client's account, gain or loss
information and advisory fees paid.
10. Verification of Reports - The Client will verify all portfolio
performance reports prepared by "CMCA and "CMS" and will acknowledge
the correctness of said reports upon request. The Client shall
immediately notify "CMS" of any discrepancy in such reports.
11. Expenses and Liabilities - The Client herby agrees to be responsible
for all fees and expenses incurred by "CMS" and "CMCA" in connection
herewith and to indemnify and hold harmless "CMS" and "CMS's"
nominee from all taxes, expenses (including attorneys' fees) or
charges incurred by or assessed against "CMS" or "CMS's" Nominee on
connection with this Agreement.
12. Assignment, Termination and Responsibility - This Agreement may not
be assigned without the written consent of Client and "CMCA" and
"CMS". The initial term of this Agreement shall be for a period of
one (1) year and shall automatically renew thereafter for successive
periods of one (1) year each until terminated by "CMS" or Client.
"CMS" or Client may terminate this Agreement at any time by
providing written notice of such election to the other party. This
Agreement will terminate automatically upon receipt by "CMS" of
legal notice of the death of the Client. Termination of this
Agreement will not affect any liability or responsibility with
regard to transactions for the Client's account initiated prior to
or after such termination, and the Client agrees to be responsible
for any commissions, fees or expenses prior to or after such
termination.
In the even of termination of this Agreement, CMCA will provide for
a refund of the unearned portion of the fee for that quarter.
Transaction processing charges paid to "CMS" are not subject to
refund in the even of termination of this Agreement because they
will be incurred at the time a service is performed. All fees due
under this Agreement at termination will be deducted from Client's
account before assets are delivered from the account.
13. Authority to Contract - If the Client is not an individual (i.e., a
corporation, partnership, trust or retirement plan), the party
executing on behalf of the Client (hereinafter referred to as the
"Authorized Person") represents that he or she is fully authorized
to execute this Agreement with "CMCA" and to act on behalf of the
Client in connection with the services to be provided to the Client
by "CMCA" under this Agreement. The Client and the Authorized
Person agree to provide "CMCA" upon the request of "CMCA" or "CMS"
any and all additional documentation and agreements necessary to
establish the authority of the Authorized Person to act on behalf of
the Client.
14. Modification or Amendment - "CMCA" or "CMS" may modify or amend this
Agreement, the fee schedule or nature of the services to be provided
hereunder by providing Client with thirty (30) days' advance written
notice of such change, modification or amendment.
-4-
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<PAGE>
15. Conflicts of Interest - Client acknowledges that "CMCA" is an
registered investment advisory firm. The firm is affiliated with
Cummer/Moyers Securities Inc. The individual principals of "CMCA"
are also principals with Cummer/Moyers Securities Inc.
16. Other Compensation To CMS - Certain of the open-end mutual funds
which may be acquired in Client's PLATINUM account may, in addition
to assessing management fees, internally assess a distribution fee
pursuant to section 12(b)1 of the Investment Company Act of 1940 as
amended, or an administrative or service fee. "CMS" may be eligible
or may subsequently become eligible to share in such fees which
generally equal 0.25%, or exceed this amount, each year of the
mutual fund account balance. Such fees are included in the
calculation of operating expenses of a mutual fund and the existence
of such fees is disclose in the prospectus for each mutual fund.
Additionally, Client understands that no-load funds may generally be
transacted directly with the sponsoring fund organization with no
transaction fee.
Client should be aware that all mutual funds incur expenses for
portfolio management services and fund administrative services.
These expenses may ranger from 1.25% to 2.0% of asset value for a
domestic equity fund and from 2.0% to 2.5% for an international or
global equity fund. Internal expenses of bond funds tend to be
lower than for equity funds. The advisory fee charged pursuant to
this Agreement will be in addition to mutual fund internal expenses.
17. Proxies - Client understands and agrees that Client retains the
right to vote all proxies solicited for the securities held in
Client's account. "CMS" will not take any action with respect to
the voting of proxies on behalf of Client. If requested, Manager
will provide advice as to the voting of specific issues.
18. Entire Agreement - This Agreement and any Schedules attached hereto
represent the entire Agreement between "CMS", "CMCA" and Client
regarding fees and services set forth herein and may not be
modified, amended or changed except with the written consent of both
"CMS" and "CMCA". This Agreement shall be construed in conjunction
with and be subject to the express terms and conditions of the
separate brokerage account Client Agreement between Client and
"CMS". In the event of any conflicts, the terms of this Agreement
shall be controlling.
19. Governing Law - This Agreement shall be governed by the laws of the
State of Texas.
20. Severability - The parties hereby agree that if any term, provision,
duty, obligation or undertaking herein contained held to be
unenforceable or in conflict with applicable state law, the validity
of the remaining portions shall not be affected, and the rights and
obligations of the parties shall be construed and enforced as if
such invalid or unenforceable provision was not contained herein.
16. Receipt of CMS's Disclosure Document - The effective date of this
agreement shall be the date evidenced by a Cummer/Moyers Capital
Advisors, Inc Officer's signature. By signing this agreement,
Client acknowledges receipt from advisor of this SEC Disclosure Form
ADV Part II. This form is attached and a part of this agreement.
Advisor annually shall deliver or offer to deliver to Client,
without charge, a current version of this written disclosure
statement. Client shall have the right to terminate this agreement,
without penalty, at any time within five (5) business days after the
effective date of this agreement.
-5-
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Thereafter, either party may terminate this agreement upon thirty
(30) days written notice to the other party by certified or
registered mail to the address set forth in the contract. In the
event this Agreement is terminated, and the Client has advanced any
fees which have not been earned, as of the effective date of
termination, such unearned fees shall be refunded to the Client.
I have been provided with the Cummer/Moyers Capital Advisors, Inc ADV
Part II as currently filed with the Securities & Exchange Commission.
_______________ _______________
(Client Initial) (Spouse Initial)
Agreed to and accepted this _______ day of ____________, 19_____
________________________ _______________________________
Client Signature Client Signature (Joint Account)
-6-
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Schedule A
PLATINUM Account Agreement
Adviser Fee Schedule
PLATINUM Fee Investments (All Fee Based Securities).
Account Value Quarterly Fee Annualized Fee
- ------------- ------------- --------------
First $100,000 0.4375% 1.750%
Next $100,000 0.375% 1.500%
Next $300,000 0.3125% 1.250%
Amounts over $500,000 0.1875% 0.750%
*The minimum account value of Fee Investments is $50,000
Advisory fees will be charged quarterly in advance. The initial fee
under the Fee Schedule is calculated from the date of inception to the
end of this initial calendar quarter under the terms of this Client
Agreement. Subsequent fees will be determined for calendar quarter
periods and shall be calculated on the basis of the market value of
PLATINUM Fee Investments held for the account of the Client on the last
day of the previous quarter. Such fees shall become due and payable the
first business day following the last day of each quarter. Advisory
fees are inclusive of administrative. fees associated with Client's
PLATINUM account.
There will be no refund of advisory fees previously paid with respect to
withdrawals of cash and/or securities. In the event of cancellation of
this Agreement, fees previously paid will be refunded on a prorated
basis to the date written notice of such cancellation is received by the
non-cancelling party.
_______________ Client Initial
_______________ Client Initial
PAGE
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EXHIBIT B-2
Cummer/Moyers Capital Advisors, Inc.
Cummer/Moyers Securities
MANAGED ACCOUNT
SERVICE AGREEMENT
PAGE
<PAGE>
Cummer/Moyers Capital Advisors, Inc.
Cummer/Moyers Securities Inc.
Managed Account
Discretionary Client Agreement
Client Name(s): _________________________________
Address: ______________________ ________________________________________
______________________ Investment Adviser (Manager)
______________________ FBO Cummer/Moyers Capital Advisors, Inc.
This agreement is by and between the above named party (hereinafter referred
to as "Client"), Cummer/Moyers Capitol Advisors, Inc., a registered
investment adviser and (hereinafter referred to as "CMCA"), and Cummer/Moyers
Securities, Inc. (hereinafter know as "CMS", registered Broker Dealer).
THE PARTIES HERETO AGREE AS FOLLOWS:
1. Appointment of Investment Manager - Client hereby appoints
Cummer/Moyers Capital Advisors, Inc. (CMCA) an investment adviser
(hereinafter referred to as "Manager"), as Client's Investment
Manager.
2. Execution Services - Cummer/Moyers Securities, Inc. (CMS) is hereby
appointed by Client as sole and exclusive broker with respect to
the referenced account for the execution of purchase and sale
transactions. In the execution of said transactions, CMS or its
clearing agent may act as agent (including agency cross
transactions with other Clients) or as principal on non-
discretionary transactions.
3. Duties of CMCA - CMCA will provide Client, upon acceptance of
Client's account, discretionary investment advisory services
including portfolio reviews and recommendations with respect to
various investments which will be included in the asset value of
the clients account, for the purpose of calculating the fee
compensation to CMCA for advisory purposes.
Manager shall assume all investment duties with respect to assets
held in the Managed Account and shall have sole investment
authority with respect to such assets. Manager shall invest and
reinvest the assets of the Managed Account in such stocks, bonds or
other property of any kind as it deems in the best interest of the
Client to achieve the investment objective designated by Client.
The Manager may take any action or non-action as it deems
appropriate, with or without other consent or authority from the
Client, and may exercise its discretion and invest such assets
exactly as fully and freely as the Client might do as owner, except
that the Manager is not authorized to withdraw any monies or
securities from the account regardless of the length of time they
have been held. The Manager shall further be free to make
investment changes regardless of the resulting rate of portfolio
turnover, when it, in its sole discretion, shall determine that
such changes will promote the investment objective of the account.
If the security or property held in such account is accompanied by
voting rights, then Manager shall exercise such voting rights in
the manner it deems appropriate provided Client determines not to
exercise such voting rights.
CMCA will also provide various administrative services which
include determining the fair market value of assets held in
Client's account at least quarterly and producing a portfolio
performance report for Client detailing account assets, account
transactions, receipt and disbursement of funds, interest and
dividends received and account gain or loss by security as well as
for the total account.
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4. Investment Policy - Client shall designate the investment objective
of the Managed Account. Any changes to the investment objective
shall be provided to Manager in writing.
5. Securities Custody - At no additional charge, CMS shall facilitate
the maintenance of custody of securities positions for the
referenced account through its' choice of clearing firm, including
holding securities in nominee name and crediting interest and
dividends received on said securities to Client's account.
6. Securities Brokerage Remuneration - Client agrees to pay CMS for
transaction execution and clearing services based upon a standard
commission schedule published by Cummer/Moyers Securities Inc.
7. CMCA Remuneration - Client will compensate CMCA for investment
advisory services on an annual fee basis at the rate set forth in
Schedule A attached hereto. The fee will be payable quarterly in
advance. The initial fee payable to CMCA will be the prorated
amount due for the initial calendar quarter from the inception of
Client's account. The initial quarterly fee will be calculated
based upon the total asset value of Client's account at inception.
The initial quarterly payment will become due in full on the date
the account is accepted and will be based on the account asset
value as of that date.
Subsequent quarterly fees will be calculated based upon the market
value of Client's Fee Investments on the last business day of the
previous calendar quarter and will become due the following
business day. No fee adjustments will be made because of
withdrawals made by Client during the period.
CMCA is hereby authorized to deduct from Client's account any fee
owed to CMCA pursuant to the terms of this Agreement. All fees paid
to CMCA will be reported to Client on the quarterly portfolio
reports which will be produced by CMCA and supplied to Client by
CMCA.
8. Limitation of Responsibility - CMCA is authorized to follow the
instructions of Client in every respect concerning Client's
account. Client hereby agrees to indemnify and hold CMCA and CMS,
their officers, directors, agents, employees and affiliates
harmless from all loss, cost (including attorneys' fees),
indebtedness and liabilities arising from actions directed by
Client.
In no event will CMCA or CMS be obligated to execute any
transaction that it believes would violate any federal or state
law, rule or regulation, or any rule or regulation of any
regulatory body. However, nothing herein shall in any way
constitute a waiver or limitation of any right the client may have
under Federal or State securities laws.
9. Reports - CMS or CMCA, or its clearing agent shall transmit to the
Client the following reports: (1) Trade confirmations reflecting
all transactions in securities; (2) Statements itemizing all
transactions in cash and securities, and all deposits and
withdrawals of principal and income, submitted at least quarterly;
(3) Statements of securities in custody listing securities held in
the account, submitted at least quarterly; (4) Portfolio
performance reports prepared and submitted on a quarterly basis
summarizing all activity Client's account, gain or loss information
and advisory fees paid.
10. Verification of Reports - The Client will verify all portfolio
performance reports prepared by CMCA and CMS and will acknowledge
the correctness of said reports upon request. The Client shall
immediately notify CMCA of any discrepancy in such reports.
Failure to notify CMS or CMCA shall operate as conclusive proof of
acceptance.
11. Expenses and Liabilities - The Client hereby agrees to be
responsible for all fees and expenses incurred by CMCA in
connection herewith and to indemnify and hold harmless CMCA and
CMS's nominee from all taxes, expenses (including attorneys' fees)
or charges incurred by or assessed against CMCA or CMS's nominee in
connection with this Agreement.
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12. Assignment, Termination and Responsibility - This Agreement may
not be assigned without the written consent of Client and CMCA.
The initial term of this Agreement shall be for a period of one (1)
year and shall automatically renew thereafter the successive
periods of one (1) year each until terminated by CMCA or Client.
CMCA or Client may terminate this Agreement at any time by
providing written notice of such election to the other party. This
Agreement will terminate automatically upon receipt by CMCA of
legal notice of the death of the Client. Termination of this
Agreement will not affect any liability or responsibility with
regard to transactions for the Client's account initiated prior to
or after such termination, and the Client agrees to be responsible
for any commissions, fees or expenses prior to or after such
termination.
In the event of termination of this Agreement, CMCA will refund to
Client the prorated portion of the fee for the quarter of
termination. Transaction processing charges paid to CMS are not
subject to refund in the event of termination of this Agreement
because they will be incurred at the time a service is performed.
All fees due under this Agreement at termination will be deducted
from Client's account before assets are delivered from the account.
13. Authority to Contract - If the Client is not an individual
(i.e., a corporation, partnership, trust or retirement plan), the
party executing on behalf of the Client (hereinafter referred to as
the "Authorized Person") represents that he or she is fully
authorized to execute this Agreement with CMCA and to act on behalf
of the Client in connection with the services to be provided to the
Client by CMCA under this Agreement. The Client and the Authorized
Person agree to provide to CMCA upon the request of CMCA any and
all additional documentation and agreements necessary to establish
the authority of the Authorized Person to act on behalf of the
Client.
14. Modification or Amendment - CMCA or CMS may modify or amend
this Agreement, the fee schedule or nature of the services to be
provided hereunder by providing Client with thirty (30) days
advance written notice of such change, modification or amendment.
15. Conflicts of Interest - Client acknowledges that Manager is an
investment advisor and will receive compensation in the form of all
advisory fees paid to CMCA pursuant to this Agreement. Further,
Manager is affiliated with CMS. In said capacity the Manager may
provide securities brokerage services through CMS which involve
securities not transacted in Client's account pursuant to the terms
and conditions of this Agreement. Such securities transactions may
result in a commission to be paid to CMS and, if so, the affiliated
financial advisor will receive a portion of said commission.
16. Other Compensation to CMS - Certain of the open-end mutual
funds which may be acquired in Client's account may, in addition to
assessing management fees, internally assess a distribution fee
pursuant to section 12(b)1 of the Investment Company Act of 1940 as
amended, or an administrative or service fee. CMS may be eligible
or may subsequently become eligible to share in such fees which
generally equal 0.25%, or exceed this amount, each year of the
mutual fund account balance. Such fees are included in the
calculation of operating expenses of a mutual fund and the
existence of such fees is disclosed in the prospectus for each
mutual fund. Additionally, Client understands that no-load funds
may generally be transacted directly with the sponsoring fund
organization with no transaction fee.
Client should be aware that all mutual funds incur expenses for
portfolio management services and fund administrative services.
These expenses may range from 1.25% to 2.0% of asset value for a
domestic equity fund and from 2.0% to 2.5% for an international or
global equity fund. Internal expenses of bond funds tend to be
lower than for equity funds. The advisory fee charged pursuant to
this Agreement will be in addition to mutual fund internal
expenses.
17. Proxies - Client understands and agrees that Client retains the
right to vote all proxies solicited for the securities held in
Client's account. The Manager will not take any action with
respect to the voting of proxies on the behalf of Client. If
requested, Manager will provide advice as to the voting of specific
issues.
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18. Entire Agreement - This Agreement and any Schedules attached
hereto represent the entire Agreement between CMS, CMCA and Client
regarding fees and services set forth herein and may not be
modified, amended or changed except with the written consent of
CMCA. This Agreement shall be construed in conjunction with and be
subject to the express terms and conditions of the separate
brokerage account Client Agreement between Client and CMS. In the
event of any conflicts, the terms of this Agreement shall be
controlling.
19. Governing Law - This Agreement shall be governed by the laws of
the State of Texas.
20. Severability - The parties hereby agree that if any term,
provision, duty, obligation or undertaking herein contained is held
to be unenforceable or in conflict with applicable state law, the
validity of the remaining portions shall not be affected, and the
rights and obligations of the parties shall be construed and
enforced as if such invalid or unenforceable provision was not
contained herein.
16. Receipt of CMCA's Disclosure Document - Client hereby
acknowledges receipt of CMCA's Form ADV Part II as required under
Rule 204-3 of the Investment Adviser's Act of 1940.
Notwithstanding anything to the contrary herein, Client Shall have
the right to terminate this Agreement without penalty within five
business days of Client's execution of this Agreement.
SIGNATURES:
Agreed to and accepted this _____ day of ____________, 19___.
___________________________ __________________________
Client Signature Client Signature (Joint Account)
__________________________________________________
Principal/Other of Cummer/Moyers Capital Advisors, Inc.
__________________________________________________
Principal/Other of Cummer/Moyers Securities, Inc.
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Schedule A
C/M Capital Advisors, Inc.
Managed Account Agreement
Advisor Fee Disclosure
Administration & Portfolio Reporting Fee (All Assets)
Assets Below 500,000 .20%
Assets Over 500,000 .15%
Breakpoints are incremental; thus the fee as a percentage of
market value decreases as market value increases.
The following charges apply only to the "No-Load" Mutual Fund
Portion of the account, - Those funds where no commissions or
12-B1 fees are paid by the fund to the advisor.
"No-Load" Fund Value Annualized Fee
------------------- --------------
$25,000 - $100,000 1%
$100,001 - $500,000 .75%
$500,001 - $1,000,000 .50%
Over 1,000,000 .25%
Advisory fees will be charged quarterly in advance. Fees will be
determined for quarter periods and shall be calculated on the
basis of the average market value of invesments held for the
account of the Client during the quarter. "No-Load" fund fees
are based upon end of the quarter values. Such fees shall become
due and payable the first business day following the last day of
each quarter.
In the event of cancellation of this agreement, fees earned since
the time of the most recent billing period will be deducted from
Client's account subject to the terms and conditions of this
Client Agreement
__________________ Client Initial
__________________ Client Initial
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EXHIBIT B-3
Cummer/Moyers Capital Advisors
Cummer/Moyers Securities
Managed Investment Program Agreement
PAGE
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Cummer/Moyers Capital Advisors Inc.
Cummer/Moyers Securities Inc.
Managed Investment Program Agreement
The agreement is between Cummer/Moyers Capital Advisors Inc. ("CMCA"),
Hereinafter refereed to as Investment Manager; Cummer/Moyers
Securities Inc., ("CMS"); and ____________________ ("Client").
The Parties Hereto Agree As Follows:
1. Appointment. Client appoints "CMCA" as the investment manager of
those assets designated to be held in a Managed Investment Program
Account.
2. Establishment of Accounts. Investment Manager shall establish
such accounts in the name of the Client as are necessary to
account for the assets and any additions, income, receipts and
disbursements in connection therewith.
(A) Execution Services. Client instructs Investment Manager to direct
the Managed Investment Program Account execution services to
"CMS". Investment Manager shall instruct "CMS" to forward to
Client copies of all brokerage confirmations promptly after
execution of transactions. The Investment Manager does not accept
Managed Investment Program Accounts where the Managed Investment
Program Account is not maintained at "CMS". The only recourse for
a client who wishes to utilize another Securities Broker, for
whatever reason, is to terminate the relationship with the
Investment Manager.
3. Duties of Investment Manager.
(A) Managed Investment Program Account. Investment Manager shall
assume all investment duties with respect to assets held in the
Managed Investment Program Account and shall invest and reinvest
the assets of the Managed Investment Program Account in such
stocks, bonds or other property of any kind as it deems in the
best interest of the Client to achieve the investment objective
designated by Client on Client Information Form. The Investment
Manager may take any action or nonaction as it deems appropriate,
with or without other consent or authority from the Client, and
may exercise its discretion and invest such assets exactly as
fully and freely as the Client might do as owner, except that the
Investment Manager is not authorizes to withdraw any monies or
securities in the portfolio of the account regardless of the
length of time they have been held. The Investment Manager shall
further be free to make investment changes regardless of the
resulting rate of portfolio turnover, when it, in its sole
discretion, shall determine that such changes will promote the
investment objective of the account. If the security of property
held in such account is accompanied by voting rights, then
Investment Manager shall exercise such voting rights in the manner
it deems appropriate provided Client determines not to exercise
such voting rights.
(B) Valuation of Account. Investment Manager shall determine the fair
market value of assets held in the Managed Investment Program
Account at least quarterly.
(C) Disbursement of Account. Client may advise Investment Manager
that Client intends to withdraw monies from the Managed Investment
Program Account on a regular basis as designated on the Client
Information Form. If Client elects to withdraw monies at any
other time, Client Agrees to provide written notice to Investment
Manager pursuant to Paragraph 12.
4. Investment Policy. Client shall designate on Client Information
Form the investment objective of the Managed Investment Program
Account. If Client wishes to change investment objective, Client
agrees to provide written instructions to Investment Manager
pursuant to paragraph 12.
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5. Term of Agreement and Termination. This agreement shall be valid
for one (1) year from the effective date and will be automatically
renewed annually for one (1) year terms. However, either party
may terminate this Agreement at any time by giving written notice
pursuant to Paragraph 12. Upon termination, Investment Manager
will liquidate the account unless Client provides written
instructions to the contrary. Investment Manager agrees to use
its best effort to liquidate the Managed Investment Program
Account upon receipt of proper written notice on the business day
of receipt provided that the notice is received prior to 12 noon.
If notice is received after 12 noon, Investment Manager agrees to
use its best effort to liquidate the Managed Investment Program
Account by end of the following business day. Termination of this
agreement shall not effect any liability resulting from sales or
exchanges initiated prior to written notice of such revocation.
Upon termination, Client shall receive a refund of the portion of
the prepaid management fee which is not utilized. Investment
Manager will not accept instructions to terminate this agreement
unless such instructions are provided in writing by Client.
6. Assignment. No assignment of this Agreement may be made by any
party except with the written consent of the other party.
7. Fees. Investment Manager shall be paid such compensation for its
services as designated on Schedule A, attached hereto. Until
paid, the fees and expenses of Investment Manager shall constitute
a lien upon the assets of the Managed Investment Program Account.
"CMS" shall be paid such compensation for its services designated
on Schedule B attached hereto.
8. Arbitration Agreement.
* Arbitration is final and binding on the parties
* The parties are waiving their rights 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 or rulings by the arbitrators is
strictly limited.
* The panel or arbitrators will typically include a minority
or arbitrators who were or are affiliated with the
securities industry.
The Client agrees that all controversies which may arise between
Client and Investment Manager concerning any transaction or the
construction, performance or breach of this or any other agreement
between Client and Investment Manager, whether entered into prior to,
on, or subsequent to the date hereof, shall be determined by
arbitration. Any arbitration shall be before either the New York
Stock Exchange, Inc., the National Association of Securities Dealers,
Inc., American Stock Exchange, Inc., or where appropriate, the Chicago
Board Options Exchange, Inc., as the Client may elect. If the Client
fails to make this election within five days of receipt of a written
request from Investment Manager to make such election, then Client
authorizes Investment Manager to make this election. The award of the
arbitrators, or of the majority of them, shall be the final judgment
upon the award rendered may be entered in any court, state or federal,
having jurisdiction. The Client specifically agrees that at least one
of the arbitrators must be knowledgeable of financial planning
concepts and the financial process.
9. Liability of Investment Manager. Investment Manager shall not
have any liability to Client for any loss incurred in connection
with recommendations or investments made or other action(s) taken
on behalf of Client due to errors of judgment or by reason of
Investment Manager's advice including action taken or omitted
subsequent to Client's death or termination of the Agreement, but
prior to receipt by Investment Manager of written notice thereof,
and including action taken or omitted prior to a written notice of
termination. However, Investment Manager shall not be excluded
from liability for losses occasioned by reason of its respective
willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of its reckless disregard
of obligations and duties hereunder. However, nothing herein
shall in any way constitute a waiver or limitation of any right
the client may have under Federal or State securities laws.
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10. Representation by Client. Client represents that the terms hereof
do not violate any obligation by which Client is bound, whether
arising by contract, operation of law or otherwise, and that, if
required, (I) this contract has been duly authorized by
appropriate action and is binding upon Client in accordance with
its terms, and (II) Client will deliver to Investment Manager such
evidence of such authority as it may reasonably require, whether
by way of a certified resolution, trust agreement, or otherwise.
A Trustee or other fiduciary entering into this agreement
represents that the proposed investment objective designated by
Client on Client Information Form is within the scope of the
investments and policies authorized by the governing instrument.
The Trustee also agrees to advise Investment Manager in writing of
the funding policy of the trust and shall specify the anticipated
liquidity needs of the Trust for disbursements.
11. Indemnification Of Investment Manager. Client hereby agrees to
indemnify and hold and save harmless Investment Manager from any
and all costs, loss, damage, expense, charge, claim or liability,
including, without limitation, attorneys' fees, asserted against
Investment Manager or imposed upon or insured by Investment
Manager as a direct or indirect result of any claim asserted by
any person concerning matters with regard to which the Investment
Manager has acted in good faith or in reliance upon the written or
verbal direction of Client; upon the written or verbal direction
of any person whom Investment Manager has reason to believe is
acting with the permission of the Client, or in reliance upon the
direction of a court which the Investment Manager believes to be
of competent jurisdiction. Investment Manager shall not be liable
for any act or omission of any other person with respect to funds
held by any person or entity other than Investment Manager.
However, nothing herein shall in any way constitute a waiver or
limitation of any right the client may have under Federal or State
securities laws.
12. Notice. All written notices required hereunder shall be deemed
effective when received by Affiliated Investment Advisor at its
office at the address shown on the Client Information Form or by
Client at the address shown on Client Information Form. Each
party shall be entitled to presume the correctness of such
addresses until notified in writing to the contrary. Receipt of a
telegram or facsimile transmission by either party will constitute
receipt of proper written notice hereunder. Client agrees to
indemnify and hold harmless Investment Manager against claim,
loss, expenses or damages, including reasonable fees of
investigation and counsel, in connection with any action taken by
Investment Manager upon receipt of a telegram or facsimile
transmission in Client's name.
13. Governing Law. This Agreement shall be construed and interpreted
in accordance with the State laws of Texas. This Agreement is
also intended to conform to the requirements of the Employee
Retirement Income Security Act of 1974 when applicable and shall
in all events be construed and interpreted in accordance
therewith.
14. Servability. It is understood by the parties hereto that if any
term, provision, duty, obligation or undertaking herein contained
is held by the court to be unenforceable or illegal or in conflict
with the applicable state law, the validity of the remaining
portions shall not be affected, and the rights and obligations of
the parties shall be construed and enforced as if such invalid or
unenforceable provision was not contained herein.
15. Disclosure. By execution of the Agreement, Client acknowledges
that Investment Manager has informed Client of the following:
(A) "CMCA" is an Investment Adviser registered with the Securities and
Exchange Commission ("SEC"). "CMCA" is affiliated with Cummer
Moyers Securities Inc., a registered Broker/Dealer.
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Effective Date, Receipt of Disclosure Statement, Right of Termination
The effective date of this agreement shall be the date evidenced by a
Cummer/Moyers Capital Advisors, Inc Officer's signature. By signing
this agreement, Client acknowledges receipt from advisor of this SEC
Disclosure Form ADV Part II. This form is attached and a part of this
agreement. Advisor annually shall deliver or offer to deliver to
Client, without charge, a current version of this written disclosure
statement. Client shall have the right to terminate this agreement,
without penalty, at any time within five (5) business days after the
effective date of this agreement.
Thereafter, either party may terminate this agreement upon thirty (30)
days written notice to the other party by certified or registered mail
to the address set forth in the contract. In the event this Agreement
is terminated, and the Client has advanced any fees which have not
been earned, as of the effective date of termination, such unearned
fees shall be refunded to the Client.
I have been provided with the Cummer/Moyers Capital Advisors, Inc ADV
Part II as currently filed with the Securities & Exchange Commission.
_______________ _______________
(Client Initial) (Spouse Initial)
Signatures:
The effective date of this Agreement shall be the date of its
acceptance by Investment Manager.
Accepted And Agreed To By Client this _____ day of__________, 1997.
_________________________ By:_________________________
Witness Client
_________________________ ________________________
Witness Client
_________________________
Witness
_________________________
Witness
Accepted And Agreed To by Investment Manager this _____ day of
__________, 1997.
By:______________________________
(Authorized Officer)
Cummer/Moyers Capital Advisors
______________________________
(Authorized Officer)
Cummer/Moyers Securities Inc.
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SCHEDULE A
MANAGEMENT FEE SCHEDULE
CMCA ACCOUNTS
Fees are incremental
Minimum Client Initial
Portfolio Administration Fee Schedule Account Size One
Growth Objective $ 50,000 __________
First $1,000,000 is billed at .20% __________
Next $4,000,000 is billed at .10%
Next $5,000,000 is billed at .05%
Greater than $10,000,000 negotiable
Total Return Income (Balanced) $100,000 __________
First $1,000,000 is billed at .20% __________
Next $4,000,000 is billed at .10%
Next $5,000,000 is billed at.05%
Greater than $10,000,000 negotiable
Fixed Income - Securities Only $200,000 __________
First $1,000,000 is billed at .20% __________
Next $4,000,000 is billed at .10%
Next $5,000,000 is billed at .05%
Greater than $ 10,000,000 negotiable
Types of Aggregated Accounts:
* Individually owned accounts
* Individual
* His/Her spouse
* Their children under age 21
* Individual Retirement Accounts (IRA's)
* Self-directed accounts under employee benefit plan ("ERISA plan")
* ERISA plan accounts in which individual is sole participant
For purposes of determining CMCA's management fee, CMCA managed
accounts, will be combined among certain classes of accounts to
determine if a lower management fee will apply.
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SCHEDULE B
BROKERAGE SCHEDULE
MANAGED INVESTMENT PROGRAM
Account Name:__________________________________________
In connection with the Managed Account Service Agreement between
Client and CMCA & CMS dated _______________, Client intend to incur
sales commissions for the Investment Management Account(s) as
follows: (initial ONE of the options below)
_____ Option 1. Sales commissions, at the rate negotiated between
Client and brokerage firm or registered representative, are charged
to the account as transactions occur. The registered representative
receives a portion of sales commissions.
_____ Option 2. Asset-based Brokerage Fee: Under this arrangement,
CMS receives an annual amount as the total annual brokerage fee, and
the registered representative receives a portion of this charge as
his or her compensation. The asset-based charge is negotiated
between Client and his brokerage firm or registered representative.
It is calculated as a percentage of assets under management. The fee
is paid quarterly in advance. When the account is opened, the
brokerage fee is billed for the remainder of the current billing
period, based on the initial contribution. Thereafter, the fee is
paid quarterly in advance, is based on the account asset value on the
last business day of the previous calendar quarter, and becomes due
the following business day.
Fees are incremental
Growth Fixed Income - Securities Only
----------------------------------- -----------------------------------
First $200,000 is billed at 1.55% First $500,000 is billed at 1.05%
Next $300,000 is billed at 1.05% Next $500,000 is billed at 0.80%
Next $500,000 is billed at .75% Next $1,000,000 is billed at 0.70%
Next $1,000,000 is billed at 0.55% Next $8,000,000 is billed at 0.60%
Next $8,000,000 is billed at 0.35% Greater than $10,000,000 negotiable
Greater than $10,000,000 negotiable
Total Return Income (Balanced)
-----------------------------------
First $200,000 is billed at 1.55%
Next $300,000 is billed at 1.05%
Next $500,000 is billed at .75%
Next $1,000,000 is billed at 0.55%
Next $8,000,000 is billed at 0.35%
Greater than $10,000,000 negotiable
Management fees will be deducted from the account. When the account
is opened, the management fee is billed for the remainder of the
current billing period and is based on the initial contribution.
Thereafter, the quarterly fee is paid in advance; it will be based on
the account asset value on the last business day of the calendar
quarter just ended; and will become due the following business day.
Client hereby authorizes Custodian to deduct the annual management
fee from Client's account. Client understands he will receive an
invoice showing the amount of the fee, the value of the assets on
which the fee was based, and the specific manner in which the
investment management fee was calculated.
Pursuant to the provision of Section 11a2-2(T) of the Securities
Exchange Act of 1934, certain transactions effected by CMS for
certain Clients on a national or regional securities exchange must be
executed through a floor broker unaffiliated with CMS. Client
specifically consents, in the absence of contrary instructions, to
CMS's acting as broker (other than as floor broker) and being
compensated for brokerage for the Manage Account when permitted by
applicable law.
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EXHIBIT C
STRATEGIC PARTNERS I, LTD.
LIMITED PARTNERSHIP AGREEMENT
PAGE
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TABLE OF CONTENTS
Page
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ARTICLE I - ORGANIZATION
1.01. Formation 1
1.02. Partnership Name 1
1.03. Partnership Office 1
1.04. Term of the Partnership 1
1.05. Objects and Purposes 1
1.06. Partners 2
1.07. Special Limited Partner 2
1.08. Liability of Partners 2
ARTICLE II - DEFINITIONS
2.01. Additional Capital Contribution 3
2.02. Capital Account 3
2.03. Capital Contributions 3
2.04. Closing Capital Balance 3
2.05. Code 3
2.06. ERISA 3
2.07. Fiscal Year 3
2.08. General Partners 3
2.09. Hot Issues Account 3
2.10. Interest Equivalent Amount 3
2.11. Limited Partner and Limited Partners 3
2.12. Limited Partnership Act 3
2.13. Loss Recovery Account 3
2.14. Management Fee 3
2.15. NASD 3
2.16. NASDAQ 3
2.17. NASD Interpretation 3
2.18. Net Asset Value 3
2.19. Net Losses 4
2.20. Net Operating Losses 4
2.21. Net Operating Profits 4
2.22. Net Profits 4
2.23. Opening Capital Balance 4
2.24. Partnership Interests 4
2.25. Partnership 4
2.26. Representative 4
2.27. Securities 4
2.28. Securities Gains 4
2.29. Securities Losses 4
2.30. Special Limited Partner 5
2.31. Tax Matters Partner 5
2.32. Valuation Period 5
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ARTICLE III - THE GENERAL PARTNERS
3.01. Management 5
3.02. Authority of General Partners 5
3.03. Partnership Offices, Employees and Expenses 6
3.04. Reliance by Third Parties 6
3.05. Other Activities and Competition 6
3.06. Exculpation 7
3.07. Indemnification 7
3.08. Payments of Costs and Expenses 7
3.09. Management Fee 8
3.10. Admission of Additional General Partners 8
ARTICLE IV - CAPITAL ACCOUNTS; ALLOCATIONS; DISTRIBUTIONS
4.01. Capital Contributions 8
4.02. Additional Contributions 8
4.03. Capital Account 9
4.04. Allocation of Net Profits and Net Losses 9
4.05. Valuation of Assets 11
4.06. Determination by General Partners of Certain Matters 12
4.07. Distributions Generally 12
ARTICLE V - ALLOCATION OF PROFITS AND LOSSES
FOR FEDERAL INCOME TAX PURPOSES
5.01. Allocation of Federal Income Tax Items 12
5.02. Allocation of Net Investment Income or Loss 12
5.03. Allocations of Net Recognized Securities
Gains or Losses 12
5.04. Limitations on Allocations 13
ARTICLE VI - WITHDRAWALS
6.01. Withdrawal by Limited Partners 13
6.02. Withdrawal by General Partners 14
6.03. Withdrawal on Certain Conditions 14
6.04. Payment to Withdrawing Partner 14
6.05. Mandatory Withdrawal of Partners 14
ARTICLE VII - ASSIGNMENT OF LIMITED PARTNER'S INTEREST
7.01. Assignment 15
7.02. Void Assignment 15
7.03. Substituted Limited Partner 15
7.04. Effect of Assignment 15
7.05. Effect to Death, Etc. 15
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ARTICLE VIII - BOOKS AND RECORDS
8.01. Fiscal Year 16
8.02. Retention 16
8.03. Financial Reports 16
8.04. Tax Matters Partner 16
8.05. Tax Elections 17
ARTICLE IX - TERMINATION
9.01. Termination 17
9.02. Resignation of General Partners 17
9.03. Interest of Bankrupt General Partner 17
9.04. Procedure 18
ARTICLE X - POWER OF ATTORNEY
10.01. Power of Attorney 18
10.02. Irrevocable 18
ARTICLE XI - MEETINGS AND VOTING
11.01. Meetings of Partners 19
11.02. Limited Partner Voting; Action Taken Without a Meeting 19
ARTICLE XII - MISCELLANEOUS
12.01. Amendments to Partnership Agreement 19
12.02. Notices 20
12.03. Entire Agreement 20
12.04. Severability 20
12.05. Captions and Gender 20
12.06. Law Governing 20
12.07. Successors and Assigns 20
12.08. Additional Instruments 20
12.09. Protection of Partnership Assets 20
12.10. Ratification of Prior Acts 20
12.11. Execution in Counterparts 21
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STRATEGIC PARTNERS I, LTD.
LIMITED PARTNERSHIP AGREEMENT
_______________
Pursuant to the Texas Revised
Limited Partnership Act
_______________
AGREEMENT, made as of the _____ day of ____________, 1995,
by and among Cummer Moyers Capital Partners, Inc., a Texas
corporation (the "Corporate General Partner") and Jeff Cummer and
Dwayne Moyers as individuals (the "Individual General Partners")
(the Corporate General Partner and the Individual General
Partners are hereinafter collectively referred to as the "General
Partners") and each and all of those persons, personally or by
attorney-in-fact, having executed in counterpart this Agreement
as limited partners or as a special limited partner (the "Limited
Partners", individually, a "Limited Partner") (the Limited
Partners and the General Partners being hereinafter sometimes
called collectively, the "Partners").
WITNESSETH:
-----------
WHEREAS, the parties hereto desire to form a limited
partnership (the "Partnership") in accordance with the provisions
of the Texas Revised Limited Partnership Act for the purposes and
upon the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the contributions to the
Partnership as hereinafter set forth and in consideration of
these presents, the parties hereto agree as follows:
ARTICLE I
ORGANIZATION
------------
1.01. Formation. The parties hereby create and form a
limited partnership pursuant to the Texas Revised Limited
Partnership Act (the "Limited Partnership Act").
1.02. Partnership Name. The business of the Partnership
shall be conducted under the name "Strategic Partners I, Ltd."
1.03. Partnership Office. The principal office of the
Partnership in the State of Texas shall be at 3801 Hulen, Suite
203, Fort Worth, Texas 76107, or at such other location as the
General Partners may hereafter designate by notice to the Limited
Partners.
1.04. Term of the Partnership. The Partnership shall
continue until December 31, 2015, unless sooner terminated in
accordance with the provisions of this Agreement.
1.05. Objects and Purposes. the primary objects and
purposes of the Partnership are:
(a) to invest and trade, on a long position or a short
position, on margin or otherwise in capital stock, subscriptions,
warrants, bonds, notes, debentures, convertible securities,
American depositary receipts and shares, rights, puts, calls and
other options (including both options written by the Partnership
and by others) relating thereto and all other types and kinds of
securities of companies in the United States or in foreign
securities markets, and in stock index and other futures
contracts relating to securities and options on such contracts
(all such items being called herein "Securities");
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(b) to engage in such other lawful Securities transactions
as the General Partners may from time to time determine;
(c) to possess, transfer or otherwise deal in, and to
exercise all rights, powers, privileges and other incidents of
ownership or possession with respect to, Securities and other
property and funds held or owned by the Partnership with the
objectives of the preservation, protection, improvement or
enhancement in value thereof;
(d) to lend any of its properties or funds, with or without
security;
(e) to have and maintain one or more offices within or
without the State of Texas and incur such expenses as may be
necessary or advisable in connection with the maintenance of such
office or offices and the conduct of the business of the
Partnership;
(f) to open, conduct and close accounts, including margin
and discretionary accounts, with brokers and/or dealers, and to
pay the commissions, fees and other charges applicable to
transactions in all such accounts; and
(g) to enter into, make and perform all contracts,
agreements and undertakings, pay all costs and expenses and
engage in all activities and transactions as may be necessary or
advisable to the carrying out of the foregoing objects and
purposes.
1.06. Partners. The names of all of the Partners, their
addresses, and the amounts of their respective contributions to
the Partnership (herein called "Capital Contributions") are set
forth on Schedule 1 annexed hereto. Such Schedule is part of
this Agreement and is on file at the offices of the Partnership
and available for inspection by any Partner during usual business
hours upon reasonable notice in writing to the General Partners.
1.07. Special Limited Partner. Investment Management &
Research, Inc. shall have the right upon its execution of this
Agreement and acceptance thereof by the General Partners, to be
designated a "Special Limited Partner" of the Partnership and
shall be deemed a Limited Partner with the same rights,
interests, duties and limitations in the Partnership as other
Limited Partners except that it shall not be subject to the re-
allocation of Net Profits to the General Partners set forth in
Section 4.04(d) hereof.
1.08. Liability of Partners. No Limited Partner shall
be personally liable for the repayment and discharge of any debts
and obligations of the Partnership in excess of the amount of his
Capital Contribution, except that, to the extent required by law,
a Limited Partner may be obligated to return in whole or in part
any portion of his Capital Contribution previously received by
him for the discharge of Partnership liabilities to all creditors
who extended credit or whose claims arose prior to such return.
Except to the extent provided in the immediately preceding
sentence, no Limited Partner shall have any liability for the
debts and obligations of the Partnership or be obligated or
required to make additional contributions to the Partnership,
other than in accordance with Section 4.02 hereof. To the extent
provided by law, the General Partners shall have unlimited
liability for the repayment and discharge of all debts and
obligations of the Partnership which remain unsatisfied from
Partnership assets but shall not be individually liable for the
repayment of Capital Contributions.
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ARTICLE II
DEFINITIONS
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For purposes of this Agreement, unless the context otherwise
requires, the following terms shall have the following respective
meanings:
2.01. "Additional Capital Contribution" is defined in Section 4.02.
2.02. "Capital Account" is defined in Section 4.03.
2.03. "Capital Contributions" is defined in Section 1.06.
2.04. "Closing Capital Balance" of a Partner for a
Valuation Period shall be the amount of such Partner's Opening
Capital Balance for such Valuation Period, increased (or
decreased) by the Net Profits preliminary allocated (or the Net
Losses allocated) to the Partner pursuant to Section 4.04(a)
hereof for such Valuation Period, decreased (or increased in the
case of the General Partners) by any Net Profits allocated to the
General Partners pursuant to Section 4.04(d) hereof as of the end
of such Valuation Period, and decreased by the amount of any
distributions to such Partner in accordance with Section 4.07
hereof during such Valuation Period.
2.05. "Code" is defined in Section 5.03(c).
2.06. "ERISA" is defined in Section 3.07.
2.07. "Fiscal Year" is defined in Section 8.01.
2.08. "General Partners" are defined in the Preamble.
2.09. "Hot Issues Account" is defined in Section 4.04(g).
2.10. "Interest Equivalent Amount" is defined in Section 4.04.(g).
2.11. "Limited Partner" and "Limited Partners" is
defined in the Preamble.
2.12. "Limited Partnership Act" is defined in Section 1.01.
2.13. "Loss Recovery Account" is defined in Section 4.04(b).
2.14. "Management Fee" is defined in Section 3.09.
2.15. "NASD" is defined in Section 4.04(g).
2.16. "NASDAQ" is defined in Section 4.05(b).
2.17. "NASD Interpretation" is defined in Section 4.04(g).
2.18. "Net Asset Value" for a Valuation Period shall
mean the excess, if any, of the value of the assets of the
Partnership as determined pursuant to Section 4.05 hereof on the
last day of such Valuation Period over the amount of liabilities
of the Partnership at such time.
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2.19. "Net Losses" for a Valuation Period shall mean the
excess, if any, of the sum of (i) Securities Losses, if any, and
(ii) Net Operating Losses, if any, over the sum of (iii)
Securities Gains, if any, and (iv) Net Operating Profits, if any,
for such Valuation Period.
2.20. "Net Operating Losses" for a Valuation Period
shall mean the excess, if any, of the expenses (including the
Management Fee referred to in Section 3.09 hereof) incurred
during such Valuation Period by the Partnership (other than
expenses incurred in the sale or purchase of Securities) over the
aggregate income earned during such Valuation Period by the
Partnership from all sources whatsoever (other than from the sale
or purchase of Securities).
2.21. "Net Operating Profits" for a Valuation Period
shall mean the excess, if any, of the aggregate income earned
during such Valuation Period by the Partnership from all sources
whatsoever (other than from the sale or purchase of Securities)
over all expenses (including the Management Fee) incurred during
such Valuation Period by the Partnership (other than expenses
incurred in the sale or purchase of Securities).
2.22. "Net Profits" for a Valuation Period shall mean
the excess, if any, of the sum of (i) Securities Gains, if any,
and (ii) Net Operating Profits, if any, over, (iii) Securities
Losses, if any, and (iv) Net Operating Losses, if any, for such
Valuation Period.
2.23. "Opening Capital Balance" of a Partner for a
Valuation Period (other than the Valuation Period beginning on
the date as of which such Partner makes his original Capital
Contribution, for which Valuation Period such Partner's Opening
Capital Balance shall be the amount equal to such Partner's
original Capital Contribution) shall be the amount equal to such
Partner's Closing Capital Balance for the next preceding
Valuation Period, increased by any Additional Capital
Contributions made pursuant to Section 4.02 hereof as of the
beginning of such Valuation Period, and decreased by the amount
of such Partner's capital withdrawals made pursuant to Section
6.01 hereof as of the end of the next preceding Valuation Period
(even if the amount of the capital withdrawal is paid after the
beginning of such Valuation Period).
2.24. "Partnership Interests" are defined in Section 4.01.
2.25. "Partnership" is defined in the Whereas clause.
2.26. "Representative" is defined in Section 7.05.
2.27. "Securities" is defined in Section 1.05(a).
2.28. "Securities Gains" for a Valuation Period shall
mean the excess, if any, of the aggregate realized and unrealized
increase during such Valuation Period in the value of Securities
of the Partnership as determined pursuant to Section 4.05 hereof
over the aggregate realized and unrealized decrease during such
Valuation Period by the Partnership in the value of Securities of
the Partnership as determined pursuant to Section 4.05 hereof.
2.29. "Securities Losses" for a Valuation Period shall
mean the excess, if any, of the aggregate realized and unrealized
decrease during such Valuation Period in the value of Securities
of the Partnership as determined pursuant to Section 4.05 hereof
over the aggregate realized and unrealized increase during such
Valuation Period by the Partnership in the value of Securities of
the Partnership as determined pursuant to Section 4.05 hereof.
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2.30. "Special Limited Partner" is defined in Section 1.07.
2.31. "Tax Matters Partner" is defined in Section 8.04.
2.32. "Valuation Period" shall mean the Fiscal Year of
the Partnership or, if for any Fiscal Year of the Partnership any
contribution to the capital of the Partnership shall have been
made at any time other than the first day of such Fiscal Year or
any withdrawal from the capital of the Partnership shall have
been made at any time other than as of the last day of such
Fiscal Year, then (a) the period commencing on the first day of
such Fiscal Year and ending on the date of such withdrawal or the
day next preceding the date of any such contribution and (b) each
successive period in such Fiscal Year commencing on the date of
any such contribution or day following the date of such
withdrawal and ending on the earlier to occur of (i) the last day
of such Fiscal Year or (ii) the date of the next such withdrawal
or the day next preceding the date of the next succeeding
contribution to the capital of the Partnership during such Fiscal
Year.
ARTICLE III
THE GENERAL PARTNERS
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3.01. Management. The management and control of the
Partnership shall be vested exclusively in the General Partners
as well as all investment management and related responsibilities
with respect to the Partnership, as set forth in Section 3.02
below. The Limited Partners shall have no part in the management
of the Partnership and shall have no authority to act on behalf
of the Partnership in connection with any matter, except as
provided in Sections 9.01 and 12.01 hereof.
3.02. Authority of General Partners. The General
Partners shall have the power and authority by themselves on
behalf and in the name of the Partnership to carry out any and
all of the objects and purposes of the Partnership set forth in
Section 1.05 hereof, and to perform all acts and enter into and
perform all contracts and other undertakings which they may deem
necessary or advisable or incidental thereto, and to have and
possess the same rights and powers as any general partner in a
partnership formed under the laws of the State of Texas,
including without limitation, to:
(a) purchase, hold, sell, exchange, receive and otherwise
acquire and dispose of the Securities and other properties of the
Partnership;
(b) open, maintain and close accounts with securities
brokers;
(c) acquire and enter into any contract of insurance which
the General Partners deem necessary or appropriate for the
protection of the Partnership and the General Partners, for the
conservation of Partnership assets, or for any purpose convenient
or beneficial to the Partnership;
(d) open, maintain and close bank accounts and draw checks
or other orders for the payment of moneys;
(e) admit additional Partners, subject to their meeting any
and all standards imposed on Limited Partners;
(f) require a Limited Partner to withdraw all or any
portion of his Capital Account from the Partnership at any time
for any reason deemed by the General Partners in their sole
discretion to be in the best interests of the Partnership;
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(g) do any and all acts required of the Partnership and
exercise all rights of the Partnership with respect to its
interest in any corporation or other entity; and
(h) act for and on behalf of the Partnership in all matters
incidental to the foregoing.
3.03. Partnership Offices, Employees and Expenses. The
General Partners may (i) maintain for the conduct of Partnership
affairs one or more offices and in connection therewith rent or
acquire office space and do such other acts as may be necessary
or advisable in connection with the maintenance and
administration of such office or offices; (ii) select and engage
independent attorneys, accountants, securities brokers or such
other persons on such terms and for such compensation as they may
deem necessary or advisable; and (iii) incur such other expenses
on behalf of the Partnership as they may, in their discretion,
deem necessary or appropriate for the conduct of Partnership
affairs. Fees and expenses for an annual audit, for preparation
of tax returns, and for safekeeping of Securities shall be an
expense of the Partnership. In the sole discretion of the
General Partners, in order to reduce some of the Partnership's
expenses, the General Partners may reimburse the Partnership for
some of its operating expenses.
3.04. Reliance by Third Parties. A General Partner
shall have exclusive authority to bind the Partnership in making
contracts and incurring obligations in the name and on the credit
of the Partnership in the ordinary course of its power and
authority as herein provided; provided that, if a General Partner
should incur any obligation in the name or on the credit of the
Partnership contrary to this Article III, that General Partner
may be held separately or individually liable by the Partnership
for the entire amount of the obligation incurred. Nothing herein
contained shall impose any obligation on any brokerage firm,
transfer agent, registrar, bank, lessor, lessee, mortgagee,
grantee or other person or firm doing business with the
Partnership to inquire as to whether or not written approval of
the Limited Partners or assignees of Limited Partners has been
obtained, and any stock power, lease, mortgage, deed, contract or
other instrument executed by the General Partner as herein
authorized shall be valid, sufficient and binding.
3.05. Other Activities and Competition.
(a) The General Partners hereby agree to devote such of
time during normal business days and hours as in their discretion
shall be deemed necessary and sufficient for the management of
the affairs of the Partnership. Nothing contained in this
Section 3.05 shall preclude the General Partners from engaging,
presently or in the future, consistent with the foregoing, and
without accountability to the Partnership, in any other business
venture or ventures of any nature and description, whether as
brokers, advisers or otherwise, the management, financing,
syndication or development of other ventures similar to the
Partnership, or from acting as investment advisers to others,
trustees of any trust or general partners of another limited
partnership, nor shall the General Partners be precluded from
directly or indirectly purchasing, selling and holding Securities
for their own accounts or the accounts of such other businesses,
irrespective of whether any such Securities are purchased, sold
or held for the account of the Partnership.
(b) Neither the Partnership nor any of the other Partners
shall have any rights in or to other business ventures or the
income or profits derived from other activities by the General
Partners by virtue of this Agreement or from any transaction in
Securities effected by the General Partners for any account other
than that of the Partnership nor shall the General Partners be
under any obligation to first offer any investment opportunities
to the Partnership or to allocate investments (as between the
Partnership and the clients of the General Partners, or
otherwise) in any particular manner, other than as the General
Partners shall determine. The pursuit of such ventures by the
General Partners even if competitive with the business of the
Partnership, shall not be deemed wrongful or improper.
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3.06. Exculpation. The General Partners shall not be
liable to any other Partner or the Partnership for any loss
suffered by such Partner or the Partnership unless such loss is
caused by their gross negligence or willful misconduct. The
General Partners may consult with counsel and accountants in
respect of the Partnership's affairs and, in acting in accordance
with the advice or opinion of such counsel or accountants, the
General Partners shall not be liable for any loss suffered by the
Partnership provided that such counsel or accountants shall have
been selected with reasonable care and the advice was not induced
by gross negligence or willful misconduct on the part of the
General Partners. The General Partners shall not be liable for
errors in judgment or for any acts or omissions that do not
constitute gross negligence or willful misconduct.
3.07. Indemnification. The General Partners shall be
indemnified and held harmless by the Partnership from and against
any and all claims, demands, liabilities, costs, damages and
causes of action of any nature whatsoever (specifically including
costs of litigation and attorneys' fees), arising out of or
incidental to the General Partners' management of the
Partnership's affairs; provided that the General Partners shall
not be entitled to indemnification where the claim, demand,
liability, cost, damage or cause of action is based upon:
(a) a matter entirely unrelated to the General Partners'
management of the Partnership's affairs or a loan to or on behalf
of the Partnership;
(b) the fraud, bad faith, gross negligence, willful
misconduct or willful and material misrepresentation of the
General Partners otherwise entitled to indemnification;
(c) the material breach of this Agreement or willful or
grossly negligent breach of their fiduciary responsibilities to
the Limited Partners by the General Partners and the failure to
remedy, after notice, such breach.
Notwithstanding anything herein to the contrary, the General
Partners shall not be indemnified for liabilities arising under
federal and state securities laws unless (a) there has been a
successful adjudication on the merits of each count involving
securities law violations and the court approves indemnification
of the litigation costs, or (b) such claims have been dismissed
with prejudice on the merits by a court of competent jurisdiction
and the court approves indemnification of the litigation costs,
or (c) a court of competent jurisdiction approves a settlement of
the claims involved and finds that indemnification of the
settlement related costs should be made. Any indemnity under
this Section 3.07 shall be paid from, and only to the extent of,
Partnership assets, and no Partner shall have personal liability
on account thereof. In any claim for indemnification for federal
or state securities laws violations, the party seeking
indemnification shall place before the court the position of the
Securities and Exchange Commission and any other applicable
regulatory authority with respect to the issue of indemnification
for securities laws violations.
The Partnership shall not incur the cost of the portion
of any insurance which insures the General Partners against any
liability as to which the General Partners are herein prohibited
from being indemnified.
3.08. Payments of Costs and Expenses. The General
Partners will pay on behalf of the Partnership all business
expenses incurred in the organization of the Partnership. The
Partnership shall reimburse the General Partners for all such
expenses. In addition, the Partnership shall pay for all direct
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operating expenses of the Partnership, which include, but are not
limited to, insurance costs, accounting fees relating to the
Partnership's outside accountants, legal fees and expenses,
including, but not limited to, fees and expenses incurred in
connection with negotiating and entering into contracts and
defending the Partnership in any action or legal proceeding,
legal fees related to investment and all direct trading expenses,
expenses relating to short sales, brokerage commissions, clearing
and settlement charges, interest on loans and debit balances,
margin interest, broker service fees and other custodial
expenses.
3.09. Management Fee. The General Partners shall have
the right to receive a fee (the "Management Fee") of 0.0625%
(1/4% per annum) of the Net Asset Value of the Partnership at the
beginning of each fiscal quarter, for the purpose of compensating
the General Partners for their investment management and other
services that they provide to the Partnership. The Management
Fee shall be calculated on the first day of each fiscal quarter
and payable in advance. The Special Limited Partner shall
receive 10% of the Management Fee payable to the General
Partners, which percentage shall be deducted from the Management
Fee calculated to be payable to the General Partners. Such
amount shall be paid directly by the Partnership to the Special
Limited Partner and be deducted from the amount of the Management
Fee otherwise payable to the General Partners.
3.10. Admission of Additional General Partners. The
General Partners may from time to time, in their sole discretion,
admit one or more additional General Partners to the Partnership,
provided, however, that (i) except in the instance of the
adjudication of bankruptcy or insolvency, death, disability or
other inability of all of the General Partners to act, no such
additional General Partner shall have the authority of the
General Partners granted by this Article III, unless the
admission of such additional General Partner is approved by
Limited Partners holding not less than a majority in amount of
the outstanding Capital Accounts of the Limited Partners; and
(ii) in no event shall the admission of such additional General
Partner or additional General Partners increase the percentage
amounts of Net Profits allocated to the General Partners pursuant
to Section 4.04(d) hereof or the amount of the Management Fee
payable pursuant to Section 3.09 hereof.
ARTICLE IV
CAPITAL ACCOUNTS; ALLOCATIONS; DISTRIBUTIONS
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4.01. Capital Contributions. Each Partner shall make an
initial cash contribution to the capital of the Partnership in
the amount set forth opposite such Partner's name on Schedule 1
annexed hereto as his Capital Contribution. Such amount shall be
the original Capital Contribution. The original Capital
Contribution by a Limited Partner shall not be less than four
limited partnership interests (the "Partnership Interests") at
$25,000 per Partnership Interest or an aggregate of $100,000,
except to the extent the General Partners, in their sole
discretion, permit an original Capital Contribution in a lesser
amount. The General Partners reserve the right to limit the
Capital Contribution and Additional Capital Contribution of any
Limited Partner to below 10% of the Partnership's total Capital
Accounts. The General Partners shall maintain in their Capital
Account an aggregate amount at least equal to the lesser of (i)
1% of the total Capital Accounts of all Partners (including the
General Partners) or (ii) $100,000. The General Partners may
from time to time, in their sole discretion, admit additional
Limited Partners to the Partnership. All such additional Limited
Partners must meet the minimum original Capital Contribution
requirement described above.
4.02. Additional Contributions. A Partner may, with the
consent of the General Partners, make additional contributions to
the capital of the Partnership on the first day of any fiscal
quarter (January 1, April 1, July 1 and October 1) during the
term of the Partnership. The General Partners, in their sole
discretion, may also accept additional contributions to the
capital of the Partnership from Limited Partners on other dates.
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The amount contributed by any Partner pursuant to this Section
is called such Partner's "Additional Capital Contribution".
4.03. Capital Account. A capital account shall be
established for each Partner on the books of the Partnership (the
"Capital Account") and such account shall be adjusted as provided
for herein. A Partner's Capital Account shall be credited with
such Partner's original Capital Contribution, any Additional
Capital Contributions, and any Net Profits allocated to such
Partner pursuant to Section 4.04 hereof, and shall be debited
with any Net Losses allocated to such Partner pursuant to Section
4.04 hereof, the amount of any capital withdrawals pursuant to
Section 6.01 hereof and the amount of any distributions pursuant
to Section 4.07 hereof.
4.04. Allocation of Net Profits and Net Losses. For
each Fiscal Year, Net Profits or Net Losses (and Securities
Gains, Securities Losses, Net Operating Profits or Net Operating
Losses included therein) for each Valuation Period during the
Fiscal Year shall be allocated among the Partners (including the
General Partners) as follows:
(a) For each Valuation Period during the Fiscal Year, the
Net Profits or Net Losses for such Valuation Period shall be
allocated among the Partners (including the General Partners) in
proportion to their respective Opening Capital Balances for such
Valuation Period; provided, however, that any such allocation of
Net Profits to a Limited Partner shall be a preliminary
allocation subject to reduction pursuant to Section 4.04(d)
hereof.
(b) A cumulative unrecovered net loss account (the "Loss
Recovery Account") shall be maintained for each Limited Partner,
which shall be zero on his admission to the Partnership,
increased by the amount of any Net Profits preliminary allocated,
and decreased by the amount of any Net Losses allocated, to such
Limited Partner pursuant to Section 4.04(a) hereof, and adjusted
as provided in Sections 4.04(d), (e) and (f) hereof.
(c) If a Limited Partner's Loss Recovery Account as of the
end of the Fiscal Year (after adjustment for all Net Profits
preliminarily allocated and all Net Losses allocated to such
Limited Partner pursuant to Section 4.04(a) hereof for Valuation
Periods during such Fiscal Year) has a negative balance, then the
amount of Net Profits preliminarily allocated to the Limited
Partner pursuant to Section 4.04(a) hereof for Valuation Periods
during such Fiscal Year shall be the amount of Net Profits
allocated to the Limited Partner for such Fiscal Year.
(d) If the Loss Recovery Account of any Limited Partner as
of the end of the Fiscal Year (after adjustment for all Net
Profits preliminarily allocated and all Net Losses allocated to
such Limited Partner pursuant to Section 4.04(a) hereof for
Valuation Periods during such Fiscal Year) has a positive
balance, then (i) if the amount of Net Profits equals a rate of
return for the Limited Partner of 10% or more, then there shall
be allocated to the General Partners an amount of Net Profits
equal to 20% of the Limited Partner's Loss Recovery Account; (ii)
the amount of Net Profits preliminarily allocated to such Limited
Partner pursuant to Section 4.04(a) hereof for Valuation Periods
during such Fiscal Year, reduced by such amount of Net Profits so
allocated under clause (i) to the General Partners, shall be the
amount of Net Profits allocated to the Limited Partner for such
Fiscal Year; and (iii) the Limited Partner's Loss Recovery
Account shall be reduced to zero. Ten percent (10%) of the
General Partners' Partnership share payable to the General
Partners and calculated pursuant to subpart (i) above of this
Subparagraph 4.04(d) will be paid to the Special Limited Partner.
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(e) If a Limited Partner withdraws all (or a percentage) of
his Capital Account as of the end of a Fiscal Year, then the
Limited Partner's Loss Recovery Account (or such percentage
thereof) shall be eliminated.
(f) If a Limited Partner desires to withdraw all (or a
percentage) of his Capital Account other than as of the end of a
Fiscal Year, then (i) the provisions of Sections 4.04(c) and (d)
hereof shall apply to the Limited Partner as if the end of the
Valuation Period ending on the effective date of the withdrawal
were the end of a Fiscal Year (and, if only a percentage of the
Limited Partner's Capital Account is to be withdrawn, by taking
into account only that percentage of the Limited Partner's Loss
Recovery Account), and (ii) the Limited Partner's Loss Recovery
Account (or such percentage thereof) shall thereafter be
eliminated.
(g) Anything herein to the contrary notwithstanding, if the
Partnership purchases Securities that meet the definition of a
"hot issue" contained in Article III, Section 1 of the Rules of
Fair Practice of the National Association of Securities Dealers,
Inc. (the "NASD") and the NASD's Interpretation thereof, all as
amended from time to time (collectively, the "NASD
Interpretation"), the purchase will be made in accordance with
the following provisions intended to comply with the NASD
Interpretation: (i) any purchase of "hot issue" Securities made
in a particular Valuation Period will be made in a separate
brokerage account of the Partnership (the "Hot Issues Account");
(ii) only those Partners who do not come within the proscriptions
of the NASD Interpretation ("Unrestricted Partners") may have any
beneficial interest in the Hot Issues Account; (iii) each
Unrestricted Partner will have a beneficial interest in the Hot
Issues Account for any Valuation Period in the proportion that
(a) the Unrestricted Partner's Opening Capital Balance for the
Period bears to (b) the sum of the Opening Capital Balances of
all Unrestricted Partners for the Period; (iv) funds required to
make a particular purchase will be transferred to the Hot Issues
Account from the regular account of the Partnership; the hot
issue Securities will be purchased for the Hot Issues Account,
held in the Hot Issues Account and sold from the Hot Issues
Account or transferred to the Partnership's regular account at
fair market value as of the day of transfer as determined by the
General Partners, with the transfer being treated as a sale; if
the hot issue Securities are sold from the Hot Issues Account,
the proceeds of the sale will be transferred from the Hot Issues
Account to the regular account of the Partnership; and (v) as of
the last day of each Valuation Period in which particular
Securities were held in the Hot Issues Account: (a) an aggregate
amount (the "Interest Equivalent Amount") equal to interest at
the interest rate being paid by the Partnership from time to time
for borrowed funds during the period in that Valuation Period
that funds from the Partnership's regular account have been held
in or made available to the Hot Issues Account (or if no funds
are being borrowed during that period, the interest rate that the
General Partners determine would have been paid if funds had been
borrowed by the Partnership during the period) will be debited to
the Capital Accounts of the Unrestricted Partners in proportion
to their respective Opening Capital Balances for the Valuation
Period and the Interest Equivalent Amount will be credited to the
Capital Accounts of all the Partners in proportion to their
respective Opening Capital Balances for the Valuation Period and
(b) any Net Profit or Net Loss during the Valuation Period with
respect to the Hot Issues Account will be allocated to the
Capital Accounts of the Unrestricted Partners in proportion to
their respective Opening Capital Balances for the Valuation
Period (subject, however, but only in the event that the General
Partners are Unrestricted Partners, to the provisions of Section
4.04(d) hereof).
(h) Anything herein to the contrary notwithstanding, if any
judgment, settlement, distribution or other disposition of any
litigation, proceeding or other claim or controversy involving
the Partnership results in the recognition of any item of income,
gain, loss or deduction for a Valuation Period which is
substantially attributable to a matter or transaction occurring
during a prior Valuation Period, which item exceeds the greater
of $30,000 or one percent of the Opening Capital Balances of all
Partners for the current Valuation Period, such item shall be
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allocated among the Partners (including persons who have ceased
to be Partners) in proportion to their Opening Capital Balances
for such prior Valuation Period.
(i) The General Partners shall have the right, without the
consent of the Limited Partners, to amend from time to time, this
Section 4.04 so that (i) the percentage allocations to the
General Partners provided in paragraph (d) hereof conforms to any
applicable requirements at the time in effect of the Securities
and Exchange Commission or other regulatory authorities;
provided, however, that no such amendment shall increase such
allocation to more than 30% of the aggregate Net Profits
allocated to any Limited Partner's Capital Account; and (ii) the
provisions of paragraph (g) hereof conform to the requirements of
the NASD Interpretation at the time in effect.
4.05. Valuation of Assets. For purposes of determining
Securities Gains and Securities Losses, the assets of the
Partnership shall be valued as follows:
(a) Securities listed or admitted to trading on a national
securities exchange shall be valued at the last sale price on the
date of determination or, if no such price is reported for such
date, then at the last reported sale price within the five-day
period preceding such date; or, if no such price is reported for
such period, then at the representative "bid" price at the close
of business on the date of determination, or, if no such price is
reported for such date, then such price as reported for the last
business day prior to the date of determination; or, if neither
such last sale price or "bid" price is reported, then at such
price as the General Partners deem to be fair market value. Such
price shall be as reported on the composite tape of the New York
Stock Exchange or the American Stock Exchange, as applicable, or,
if neither is applicable, as reported by any other such exchange
on which such Securities are listed or traded, as the General
Partners may determine, in their absolute discretion.
(b) Securities traded in the over-the-counter market shall
be valued at the "last trade" price as reported by the National
Association of Securities Dealers Automated Quotation System
("NASDAQ") as of the date of determination or, if no such price
is reported for such date, then at the "last trade" price as so
reported within the five-day period preceding such date; or, if
no such price is reported for such period, then at the
representative "bid" price at the close of business on the date
of determination, as reported in NASDAQ (or, if not so reported,
then as reported by the National Quotation Bureau, Inc.); or, if
no such price is reported for such date, then at such price as so
reported for the last business day prior to the date of
determination; or, if neither such "last trade" price nor such
"bid" price is so reported, then at such price as the General
Partners deem to be fair market value.
(c) Securities held short by the Partnership shall be
valued in the manner provided in Section 4.05(a) or (b), as
applicable, except that the "asked" price shall be substituted
for the "bid" price when applicable. The value of Securities
held short by the Partnership shall be treated as a liability of
the Partnership and, together with the amount of any margin or
other loans on account thereof, shall be subtracted from the
Partnership's assets in determining asset value.
(d) Options for the purchase or sale of Securities shall be
valued as provided in Sections 4.05(a) or (b), as applicable.
Premiums from the sale of options written by the Partnership
shall be included in the assets of the Partnership and the market
value of such options shall be included as a liability of the
Partnership.
(e) Short-term money market instruments and bank deposits
shall be valued at cost (together with accrued and unpaid
interest) or market, depending on the type of investment, as the
General Partners shall deem appropriate.
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(f) The value or amount of any other assets (except
goodwill, which shall be given no value) and of liabilities of
the Partnership shall be as determined in good faith by the
General Partners, in the exercise of their absolute discretion.
The foregoing valuations may be modified by the General Partners,
in their sole discretion, if and to the extent that they shall
determine that such modifications are advisable in order to
reflect market or liquidity conditions or other factors affecting
value.
4.06. Determination by General Partners of Certain
Matters. All matters concerning the valuation of Securities, the
determinations of assets and liabilities, the allocation of Net
Profits and Net Losses among the Partners, the allocation of
related Partnership tax items among the Partners and all
accounting procedures not specifically and expressly provided for
by the terms of this Agreement, shall be determined by the
General Partners, whose determination, so long as made in good
faith, shall be final and conclusive as to all of the Partners.
4.07. Distributions Generally. The General Partners are
not required to make any distributions of Net Profits. Any Net
Profits of the Partnership may be distributed by the General
Partners on an annual basis and additional distributions may be
made during the Fiscal Year at the sole discretion of the General
Partners at such time or times as they shall determine, subject
to reinvestment of all or part of such profits or gains as
Additional Capital Contributions. All distributions hereunder
shall be made ratably to all Partners in accordance with their
relative Capital Accounts at the time of any such distribution.
The General Partners may set up such reserves as may be required
by the needs of the Partnership. If the Partnership should
distribute property other than cash pursuant to this Section 4.07
or Article VI, the Capital Accounts of the Partners shall be
adjusted as if such property were sold at its fair market value
and the cash proceeds of such sale were distributed.
ARTICLE V
ALLOCATION OF PROFITS AND LOSSES FOR
FEDERAL INCOME TAX PURPOSES
---------------------------
5.01. Allocation of Federal Income Tax Items. As of the
end of each Fiscal Year, the Partnership's taxable income or net
loss as determined for federal income tax purposes and all items
thereof shall be allocated among the Partners pursuant to the
following Sections of this Article V.
5.02. Allocation of Net Investment Income or Loss. The
Partnership's net investment income or loss (i.e., the
Partnership's taxable income or loss determined without regard to
gains and losses (whether capital or ordinary in nature) from the
disposition of Securities) for each Fiscal Year (and all items of
income, gain, loss and deduction contained therein) shall be
allocated as nearly as practicable among the Partners (including
those which have withdrawn during the year) in such manner as to
reflect equitably amounts of Net Operating Profits or Losses
allocated to each Partner for the Fiscal Year pursuant to Section
4.04 hereof. Notwithstanding the foregoing, all deductions
attributable to operating expenses which are funded by the
General Partners, if any, shall be allocated to the General
Partners.
5.03. Allocations of Net Recognized Securities Gains or
Losses.
(a) The Partnership's recognized gains and losses (whether
capital or ordinary in nature) from the disposition of Securities
for each Fiscal Year shall be allocated among the Partners
(including those which have withdrawn during the year) in such
manner as to reflect equitably amounts of Securities Gains or
Losses allocated to each Partner pursuant to Section 4.04 for the
current and prior Fiscal Years attributable to the Securities the
disposition of which gives rise to such recognized gains and
losses.
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(b) Notwithstanding Section 5.03(a) above, in the event a
Partner withdraws all or a portion of his Capital Account from
the Partnership during or as of the end of a Fiscal Year (and
such withdrawal is paid to the Partner in cash), the General
Partners in their sole discretion may make a special allocation
to said Partner of the Partnership's net recognized gains
(whether capital or ordinary in nature) from the disposition of
Securities for the Fiscal Year in such a manner as will reduce
the amount, if any, by which the amount withdrawn by said Partner
exceeds the Partner's federal income tax basis in his interest in
the Partnership before such allocation.
(c) All allocations under this Section 5.03 shall be made
pursuant to the principles of Section 704(c) of the Internal
Revenue Code of 1986, as amended (the "Code"), and in conformity
with Treasury Regulations ss.1.704-1(b)(2)(iv)(d) and (f) and
1.704-1(b)(4)(i) promulgated thereunder, or the successor
provisions to such Section and Regulations.
5.04. Limitations on Allocations. In no event shall
less than 1% or, if the aggregate Closing Capital Balances of all
Partners including the General Partners exceeds $50 million, then
1% divided by the ratio of such aggregate Closing Capital
Balances to $50 million, but in no event less than 0.2%) of the
Partnership's net investment income or loss and recognized gains
and losses from the disposition of Securities be allocated to the
General Partners. In the case of a Partner who has contributed
(or withdrawn) capital to (or from) the Partnership during the
Fiscal Year or who became (or ceased to be) a Partner by virtue
of assignment of a Capital Account pursuant to Section 7.01, the
allocation of federal income tax items to such Partner in respect
to such contribution (or withdrawal) or assigned Capital Account
shall not exceed the maximum allocation permitted under Section
706 of the Code to limit retroactive allocations.
ARTICLE VI
WITHDRAWALS
-----------
6.01. Withdrawal by Limited Partners. Subject to the
provisions of Section 1.08 hereof, any Limited Partner without
the consent of the General Partners, may withdraw the whole or
any part of the amount in his Capital Account on the first day of
any fiscal quarter (January 1, April 1, July 1 and October 1)
during the term of the Partnership. The General Partners, in
their sole discretion, may consent to withdrawals as of other
dates. The Limited Partner seeking a withdrawal pursuant to this
Section 6.01 must give written notice to the General Partners at
least sixty (60) days prior to the date as of which the
withdrawal is to be made, stating his intention to withdraw;
provided, however, that in the event such notice follows notice
given (or required to be given) by the General Partners in
accordance with Section 6.02 hereof, such written notice by a
Limited Partner need be given to the General Partners at least
thirty (30) days prior to the withdrawal date. Any such notice
may be waived by the General Partners in their sole discretion.
No partial withdrawal request which is less than $25,000 or which
would reduce a Limited Partner's Capital Account below the lesser
of a Limited Partner's initial Capital Contribution or $100,000
(or such lesser amount as may be consented to by the General
Partners) will be accepted by the General Partners. Upon receipt
of any such partial withdrawal notice, the General Partners will
request the Limited Partner to reduce the amount of the requested
withdrawal or withdraw all of his Capital Account. If a Limited
Partner has not retained his Capital Contribution in the
Partnership for at least thirty-six months, the General Partners
may deduct for the account of the Partnership a withdrawal fee of
5% of the capital withdrawn from the withdrawing Limited
Partner's Capital Account to cover the cost of any withdrawal
that requires their consent. No withdrawal shall be made unless
all liabilities of the Partnership have been paid or unless the
Partnership has sufficient assets to pay such liabilities
(including contingent or unliquidated liabilities); provided,
however, that the General Partners may, in their sole discretion,
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permit a withdrawal after deducting from the amount to be
withdrawn any reserve or reserves which, in their sole
discretion, would represent such withdrawing Limited Partner's
share of such contingent or unliquidated liabilities and provided
further that upon the definitive resolution of any such
contingent or unliquidated liability so reserved against, the
General Partners shall have the right, in their discretion, to
distribute to the withdrawn Limited Partner any excess of such
reserve over such ultimate liability, or, if such reserve is less
than such ultimate liability, to require such Limited Partner to
return to the Partnership that portion of the withdrawn amount
equal to the excess of such Partner's share of such liability
over the amount of such reserve. Any Limited Partner electing a
complete withdrawal pursuant to this Article VI shall cease to be
a Partner as of the effective date of the withdrawal. No
provision of this Section shall affect the rights and limitations
in connection with (i) an assignment or transfer by a Limited
Partner of his interest pursuant to Article VII of this
Agreement, or (ii) the termination or dissolution of the
Partnership pursuant to Article IX of this Agreement.
6.02. Withdrawal by General Partners. On the first day
of any fiscal quarter (January 1, April 1, July 1 and October 1)
during the term of the Partnership, provided that the General
Partners have retained their Capital Contribution in the
Partnership for at least thirty-six months, the General Partners
may withdraw that portion, or any part thereof, of the amount in
their Capital Account in excess of 1% of the aggregate Capital
Accounts of all Partners (including the General Partners) as of
the date of withdrawal. No such withdrawal shall be made unless
all liabilities of the Partnership have been paid or unless the
Partnership has sufficient assets to pay such liabilities
(including contingent or unliquidated liabilities).
6.03. Withdrawal on Certain Conditions. In the event of
the death, adjudication of incompetency or adjudication of
bankruptcy of a Partner, or of a Partner's trustee, fiduciary or
legal representative, his Representative, as defined in Section
7.05 hereof, shall have been deemed to have elected a complete
withdrawal from the Partnership as of the first day of the next
fiscal quarter (January 1, April 1, July 1 and October 1) in
which such event occurs.
6.04. Payment to Withdrawing Partner. Payment shall be
made to a Partner withdrawing 90% or less of the balance of his
Capital Account (as of the date of the withdrawal) within thirty
(30) days of the effective date of the withdrawal. Payment shall
be made to a Partner withdrawing over 90% of the balance of his
Capital Account (as of the date of the withdrawal) in the
following manner; (i) 90% of the amount of his Capital Account
withdrawn within thirty (30) days of the effective date of the
withdrawal and (ii) the balance of the amount of his Capital
Account withdrawn (together with interest thereon at the
prevailing broker's call rate to the Partnership) within ten (10)
days after the Partnership has received its audited financial
statements for the Fiscal Year in which such effective date of
withdrawal occurs. At the option of the General Partners, the
amount of the withdrawal may be made in whole in cash, or in
whole in kind, or in part in cash and in part in kind.
6.05. Mandatory Withdrawal of Partners. The General
Partners shall, in their sole discretion, have the right to
require the withdrawal of a Partner at any time by written notice
to such Partner. The effective date of such withdrawal shall be
determined by the General Partners in their sole discretion. In
the event of such withdrawal, payment shall be made to the
withdrawing Partner of 90% of the amount of his Capital Account
withdrawn within thirty (30) days of the effective date of the
withdrawal and of the balance of the amount of his Capital
Account withdrawn within ten (10) days after the Partnership has
received its audited financial statements for the Fiscal Year in
which such effective date of withdrawal occurs.
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ARTICLE VII
ASSIGNMENT OF LIMITED PARTNER'S INTEREST
----------------------------------------
7.01. Assignment. No Limited Partner shall assign or
transfer, or offer to sell, assign, or transfer all or any part
of his interest in the Partnership without the prior written
consent of the General Partners (which consent may be withheld
for any reason) other than by will or the laws of intestacy and
distribution.
7.02. Void Assignment. Any sale, exchange or other
transfer by any Limited Partner of any interest in the
Partnership in contravention of Section 7.01 hereof shall be void
and ineffective, and shall not bind, or be recognized by, the
Partnership or any other party. No purported assignee shall have
any right to any profits, losses or distributions of the
Partnership.
7.03. Substituted Limited Partner.
(a) No Limited Partner shall have the right to substitute
an assignee as a Limited Partner in his place. The General
Partners shall, however, have the right to permit such an
assignee to become a Substituted Limited Partner. If granted,
such permission by the General Partners shall be binding and
conclusive without the consent or approval of any Limited
Partner.
(b) Upon the admission of a Substituted Limited Partner, to
the extent required by the Limited Partnership Act, the schedule
of Limited Partners annexed hereto shall be amended to reflect
the name and address of such Substituted Limited Partner and to
eliminate the name and address of the assigning Limited Partner.
Each Substituted Limited Partner, as a condition of becoming a
Partner in the Partnership, shall execute such instrument or
instruments as shall be required by the General Partners to
signify such Substituted Limited Partner's agreement to be bound
by all the provisions of this Agreement.
7.04. Effect of Assignment.
(a) Any Limited Partner who shall assign his interest in
the Partnership shall cease to be a Limited Partner of the
Partnership and shall no longer have any rights or privileges of
a Limited Partner except that, unless and until the assignee of
such Limited Partner is admitted as a Substituted Limited Partner
in accordance with the provisions of Section 7.03 hereof, such
assigning Limited Partner shall retain the statutory rights and
obligations of an assignor limited partner under applicable law.
(b) Any person who acquires in any manner whatsoever any
interest in the Partnership, irrespective of whether such person
has accepted and adopted in writing the terms and provisions of
this Agreement, shall be deemed by the acceptance of the benefits
of the acquisition thereof to have agreed to be subject to and
bound by all the obligations of this Agreement that any
predecessor in interest of such person was subject to or bound
by.
7.05. Effect to Death, Etc. The death, incompetency or
bankruptcy of a Limited Partner or a Limited Partner's trustee,
fiduciary or legal representative shall not dissolve or terminate
the Partnership. In the event of such death, incompetency or
bankruptcy, the executor, administrator, guardian, trustee or
other personal representative (the "Representative") of the
deceased, incompetent or bankrupt Limited Partner or Limited
Partner's trustee, fiduciary or legal representative shall be
deemed to be the assignee of such Limited Partner's interest and
may become a Substituted Limited Partner upon the terms and
conditions set forth in Section 7.03, subject to the withdrawal
provisions of Section 6.03.
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ARTICLE VIII
BOOKS AND RECORDS
-----------------
8.01. Fiscal Year. The fiscal year of the Partnership
(herein called the "Fiscal Year") shall be the calendar year, and
such fiscal period shall be the taxable period of the Partnership
for federal income tax purposes.
8.02. Retention. At all times during the continuance of
the Partnership, the General Partners shall keep or cause to be
kept full and true books of account of the business and
investments of the Partnership, in which shall be entered fully
and accurately each transaction of the Partnership. All of such
books of account, together with an executed copy of the
Certificate of Limited Partnership, and any amendments thereto,
shall at all times be maintained at an office of the Partnership
(or an office of the firm of certified public accountants
retained by the Partnership) and shall be open to the inspection,
examination and duplication by any Limited Partner or his
representative at such time as may be mutually convenient to the
General Partners and such Limited Partner.
8.03. Financial Reports.
(a) Audited financial statements of the Partnership for
each Fiscal Year, prepared in accordance with generally accepted
accounting principles, and a statement of each Limited Partner's
Capital Account as of the end of such Fiscal Year, shall be
prepared as promptly as shall be practicable after the last day
of such Fiscal Year by certified public accountants selected by
the General Partners from time to time and retained by the
Partnership. A copy of such financial statements and such
statement of each Partner's Capital Account shall be submitted to
each such Partner as promptly as practicable after the close of
each Fiscal Year.
(b) As promptly as practicable after the close of each
Fiscal Year the Partnership shall send to each Partner annual tax
reports indicating his share of the net income, net loss, capital
gains or capital losses and other relevant items of the
Partnership for such Fiscal Year for federal, state and local
income tax purposes. All determinations made by such certified
public accountants shall be binding on all Partners unless
objected to in writing thirty (30) days after such determination.
(c) Each Limited Partner will receive an unaudited
statement of the investment performance of the Partnership on a
quarterly basis, in such form as determined by the General
Partners.
(d) The General Partners shall have the right, in their
discretion, to require an audit of the Partnership's books and
records, at the expense of the Partnership, as of any date or
dates other than the end of a Fiscal Year, for any purpose or
purposes they deem appropriate (including, without limitation, in
connection with any proposed withdrawal of capital by any Partner
as of such date or dates). The Partnership's accountants shall
also prepare such reports as may be requested by the General
Partners in order to comply with the NASD Interpretation or other
provisions of applicable law.
8.04. Tax Matters Partner. "Tax Matters Partner" herein
shall mean the General Partners. The Tax Matters Partner shall
be entitled to take such actions on behalf of the Partnership in
any and all proceedings with the Internal Revenue Service as
they, in their reasonable business judgment, deem to be in the
best interests of the Partnership without regard for whether such
actions result in a settlement of tax matters favorable to some
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Partners and adverse to other Partners. The Tax Matters Partner
shall be entitled to be reimbursed by the Partnership for all
costs and expenses incurred by their in connection with any such
proceeding and to be indemnified by the Partnership (solely out
of Partnership assets) with respect to any action brought against
it in connection with the settlement of any such proceeding.
8.05. Tax Elections. The General Partners may, in their
sole discretion, make or revoke the election referred to in
Section 754 of the Code or any similar provision enacted in lieu
thereof or any other election under the Code.
ARTICLE IX
TERMINATION
-----------
9.01. Termination. The General Partners may at any time
determine to liquidate and dissolve the Partnership without any
action by the Limited Partners. In addition, the Partnership
shall be terminated and dissolved upon the occurrence of any of
the following events:
(a) voluntary resignation or withdrawal of all of the
General Partners, or adjudication of bankruptcy or insolvency,
death, disability or other inability of all of the General
Partners to act, but subject, however, to a successor General
Partner being appointed by the General Partners (in the case of
their voluntary resignation or withdrawal) or by the Limited
Partners (in the case of an adjudication of bankruptcy or
insolvency, death, disability or other inability to act), acting
by the written consent of the holders of a majority in amount of
the aggregate Capital Accounts of the Limited Partners, and in
the event of appointment of such successor General Partner, the
Partnership shall not terminate but shall continue until
otherwise terminated pursuant to the provisions of this Section
9.01; however, in the event of any such resignation or withdrawal
each Limited Partner will have the right to withdraw all of his
Capital Account from the Partnership by written notice to the
Partnership given within thirty (30) days from the date he is
notified of such resignation or withdrawal;
(b) the election by the General Partners to dissolve the
Partnership;
(c) the continued conduct of the Partnership business
becoming unlawful;
(d) upon the order of dissolution by a court of competent
jurisdiction or upon any recognized process of dissolution as
provided for by the laws of the State of Texas; or
(e) the expiration of the term of the Partnership.
9.02. Resignation of General Partners. For the purpose
of this Agreement, all of the General Partners will be deemed to
have resigned as such upon the occurrence of all of the following
events: (a) the cessation of business, liquidation or dissolution
of the Corporate General Partner; (b) the disability of both
Individual General Partners causing an inability to efficiently
perform their duties as Individual General Partners for an
aggregate of six months in any twelve-month period; and (c) the
death, resignation or removal of both Individual General
Partners.
9.03. Interest of Bankrupt General Partner. In the
event of the bankruptcy of a General Partner, the Representative
of such General Partner, if any is appointed, shall be deemed to
be the assignee of such General Partner's interest, which
interest shall continue at the risk of the Partnership business
until December 31 of the Fiscal Year in which such event takes
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place or earlier termination of the Partnership. If the
Partnership is continued after the expiration of such year, such
General Partner or his or its Representative shall be entitled to
receive, in accordance with Article VI, an amount equal to the
Closing Capital Balance of such General Partner. Upon the
bankruptcy or withdrawal of a General Partner, neither such
General Partner nor his or its Representative shall have any
right to take part in the management of the Partnership.
9.04. Procedure. Upon the termination or dissolution of
the Partnership, an accounting shall be made of the operations,
from the date of the last previous accounting to the date of such
termination; and, thereupon, the General Partners (or in the
event that the dissolution is caused by the bankruptcy,
dissolution, resignation, withdrawal death, disability or other
inability to act of all of the General Partners, such person as
may be designated by Limited Partners holding a majority in
amount of the Capital Accounts of the Limited Partners) shall act
as liquidating trustee and immediately proceed to wind up and
terminate the business and affairs of the Partnership. Upon the
termination or dissolution of the Partnership, the General
Partners or such other liquidating trustee, as the case may be,
shall, after paying all liabilities, including providing for the
cost of dissolution and reserves for unliquidated liabilities,
distribute the remainder either in cash or in Securities to the
then Partners (or their Representatives) as nearly as may be
practicable in proportion to their then respective Capital
Accounts after taking into account transactions related to the
liquidation of the Partnership.
ARTICLE X
POWER OF ATTORNEY
-----------------
10.01. Power of Attorney. Each of the Limited Partners
does hereby constitute and appoint the General Partners as such
Limited Partner's true and lawful representative and attorney-in-
fact, in its, his or her name, place and stead to make, execute
and file (i) a Certificate of Limited Partnership of the
Partnership, (ii) any amendments thereof required to reflect any
amendments hereof, (iii) any other amendments thereof required or
permitted by law and (iv) all other instruments, documents and
certificates which may be required by the laws of any
jurisdiction in which the Partnership does business, or any
political subdivision or agency thereof, to effectuate, implement
or continue the valid and subsisting existence of the
Partnership.
10.02. Irrevocable. The foregoing grant of authority:
(a) is a special power of attorney coupled with an
interest, is irrevocable, and shall survive
the death, bankruptcy, incompetency, insolvency or dissolution of
a Limited Partner.
(b) may be exercised by the person appointed as power of
attorney for each Limited Partner by a facsimile signature or by
listing all of the Limited Partners executing any instrument with
his single signature as attorney-in-fact for all of them; and
(c) shall survive the delivery of an assignment by a
Limited Partner of the whole or any portion of his interest,
except that where the transferee has been approved by the General
Partners for admission to the Partnership as a Substituted
Limited Partner, the power of attorney shall survive the delivery
of such assignment for the sole purpose of enabling the General
Partners to execute, acknowledge and file any instrument
necessary to effect such substitution.
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ARTICLE XI
MEETINGS AND VOTING
-------------------
11.01. Meetings of Partners. Meetings of the Partnership
may be called by the General Partners and such a meeting will be
called following receipt of written request therefor of Limited
Partners holding not less than twenty-five percent (25%) of the
amount of the then outstanding Capital Accounts. The General
Partners will establish and notify the Limited Partners within
twenty (20) days after receipt of such written request of the
time and place in Fort Worth, Texas, or other convenient
location, of the meeting and the nature of the business to be
transacted. The meeting will be held no less than ten (10) days
nor more than sixty (60) days following the mailing of the
notice, as stated in that notice, or as otherwise provided in
this Agreement.
11.02. Limited Partner Voting; Action Taken Without a
Meeting.
(a) In any matter described in this Agreement on which a
Limited Partner is entitled to grant (or deny) his consent,
approval or cast his vote, he may accomplish the same by
attending any meeting convened for all of the Limited Partners
entitled to consent, approve or vote on the matter or he may
grant to any person a special or general power of attorney to
consent, approve or vote for him at any such meeting or he may
grant (or deny) his consent or approval in writing. Said written
consent or approval may be utilized at any duly held meeting of
the Limited Partners or it may be utilized in obtaining approval
or denial by the Limited Partners entitled to grant or deny
consent on said matter.
(b) In any matter described in this Agreement on which a
Limited Partner is entitled to grant (or deny) his consent,
approval or cast his vote in lieu of a meeting a written ballot
may be requested and he may accomplish the same by casting his
ballot in the manner of providing a notice hereunder. The ballot
must be delivered to each Limited Partner in the manner provided
for notices hereunder not less than ten (10) and not more than
sixty (60) days prior to the date on which any action or inaction
on which the ballot is to be taken is to be effective. Ballots
not received by the Partnership during said fifty (50) days
period are invalid. The ballot must be accompanied, or preceded
by not more than thirty (30) days, by a written disclosure of all
material facts reasonably anticipated by the General Partners to
be material to the Limited Partner's decision to approve, or
withhold approval from, the matter under consideration.
(c) In the event a vote of the Limited Partners is taken
pursuant to this Agreement for any reason, each Limited Partner,
including the General Partners to the extent of such General
Partners' Capital Account, if any, will have the right to a
proportionate vote equal to his Capital Account in the
Partnership including Capital Accounts assigned to him by persons
who are not at the time of the vote Substituted Limited Partners.
ARTICLE XII
MISCELLANEOUS
-------------
12.01. Amendments to Partnership Agreement. The terms
and provisions of this Agreement may be modified or amended at
any time and from time to time upon the written consent thereto
of the General Partners and any other General Partner or
Partners, together with the written consent thereto of Limited
Partners holding a majority in amount of the Capital Accounts of
the Limited Partners, insofar as is consistent with the laws
governing this Agreement; provided, however, that the General
Partners shall have the power to amend or modify this Agreement,
without the consent of the Limited Partners, to admit additional
General Partners (in accordance with Section 3.10 hereof) or
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additional Limited Partners (in accordance with Section 4.01
hereof) or to effect any amendment contemplated by Section
4.04(i) hereof, provided, further, that in any event, without the
specific consent of each Partner adversely affected thereby, no
modification or amendment shall (i) reduce the Capital Account of
any Partner or impair his rights of withdrawal with respect
thereto, (ii) change the respective liabilities of the General
Partners and the Limited Partners, (iii) have the effect of
allocating net profits and losses generally other than in
proportion to the respective Capital Balances of the Partners; or
(iv) amend this Section 12.01.
12.02. Notices. Any notice, request, or demand required
or permitted under this Agreement shall be in writing and shall
be deemed to have been duly given or made if delivered personally
or if sent postage prepaid by registered or certified mail, (i)
in the case of the General Partners, to them at 3801 Hulen, Suite
203, Fort Worth, Texas, 76107; and (ii) in the case of a Limited
Partner, to his address as set forth on Schedule 1 annexed
hereto. Any Limited Partner may change his address for notices
by giving notice as provided herein, stating his new address, to
the General Partners, and the General Partners may change their
address by giving such notice to all Limited Partners.
12.03. Entire Agreement. This Agreement constitutes the
entire understanding of the General Partners and the Limited
Partners with respect to the subject matter hereof. No
modification or waiver of this Agreement, or any part hereof,
shall be valid or effective unless in writing and signed by the
party sought to be charged therewith; and no waiver of any breach
or condition of this Agreement shall be deemed a waiver of any
other or subsequent breach or condition, whether of like or
different nature.
12.04. Severability. The invalidity or unenforceability
of any particular provision of this Agreement shall not affect
the other provisions hereof, and this Agreement shall be
construed as if such invalid or unenforceable provision were
omitted.
12.05. Captions and Gender. The captions and titles of
the Articles and Sections are for convenience and reference only,
and are not to be considered in construing this Agreement.
Whenever used herein, the singular number includes the plural,
the plural includes the singular and the use of any gender shall
include all genders.
12.06. Law Governing. This Agreement and all rights and
liabilities of the parties hereto shall be governed by and
construed in accordance with the laws of the State of Texas.
12.07. Successors and Assigns. Subject to the
restrictions on transferability contained herein, this Agreement
and all the terms and provisions hereof shall be binding upon and
shall inure to the benefits of the Partners, their respective
legal representatives, heirs, successors and assigns.
12.08. Additional Instruments. Each Limited Partner
hereby agrees upon request of the General Partners to execute and
deliver, from time to time, such other certificates or other
documents and to perform such acts as the General Partners may
reasonably request, for the purposes of the Partnership.
12.09. Protection of Partnership Assets. The General
Partners shall defend and prosecute such legal or equitable
actions as the General Partners deem necessary to enforce or
protect the interests of the Partnership, and such expense shall
be an operating cost of the Partnership.
12.10. Ratification of Prior Acts. Each Limited Partner,
including Substituted Limited Partners, by becoming a Partner,
ratifies and agrees to be bound by all actions taken by the
General Partners of the Partnership prior to the date such Person
became a Partner.
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12.11. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be
deemed to be an original, but all of which together shall
constitute one and the same instrument.
The Partners being duly sworn, do hereby execute and
acknowledge this Agreement of Limited Partnership, as of the day
and year first above written.
IN WITNESS WHEREOF, this Agreement has been duly executed on
behalf of the parties hereto as of _______________, 1995.
CUMMER MOYERS CAPITAL PARTNERS, INC.
CORPORATE GENERAL PARTNER:
By: _______________________________
Its:_______________________________
JEFF CUMMER
INDIVIDUAL GENERAL PARTNER
__________________________
DWAYNE MOYERS
INDIVIDUAL GENERAL PARTNER
__________________________
INVESTMENT MANAGEMENT & RESEARCH, INC.
SPECIAL LIMITED PARTNER
By: __________________________
Its:__________________________
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