<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
SCHEDULE 13D
UNDER THE EXCHANGE ACT OF 1934
(Amendment No. 2 )
------
FIRST STATE BANCORPORATION
--------------------------
(Name of Issuer)
COMMON STOCK
------------
(Title and Class of Securities)
336453105
---------
(CUSIP Number)
Richard J. Perry, Jr., Esquire
Perry & Associates, P.C.
1826 Jefferson Place, N.W.
Washington, D. C. 20036
(202) 775-8109
--------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
February 26, 1999
-----------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Page 1 of 29 Exhibit Index at page 19
<PAGE> 2
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
CUSIP NUMBER 336453105 PAGE 2 OF 29 PAGES
-------- ---------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. NAME OF REPORTING PERSON / S.S. OR I.R.S. IDENTIFICATION OF ABOVE PERSON
Financial Institution Partners, L.P. / 52-1899611
- ------------------------------------------------------------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b)
- ------------------------------------------------------------------------------------------------------------------------------------
3. SOURCE OF FUNDS
WC OO
- ------------------------------------------------------------------------------------------------------------------------------------
4. IS DISCLOSURE OF LEGAL PROCEEDING REQUIRED PURSUANT TO ITEMS 2(d) AND 2(e)
NO
- ------------------------------------------------------------------------------------------------------------------------------------
5. CITIZENSHIP OR PLACE OF ORIGIN
Organized: State of Delaware
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF 6. SOLE VOTING POWER
SHARES
OWNED BY -------------------------------------------------------------------------------------------------
EACH 7. SHARED VOTING POWER
REPORTING
PERSON WITH 4,600 SHARES
-------------------------------------------------------------------------------------------------
8. SOLE DISPOSITIVE POWER
-------------------------------------------------------------------------------------------------
9. SHARED DISPOSITIVE POWER
4,600 SHARES
- ------------------------------------------------------------------------------------------------------------------------------------
10. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,600 SHARES
- ------------------------------------------------------------------------------------------------------------------------------------
11. DOES THE AGGREGATE AMOUNT IN BOX 10 EXCLUDE CERTAIN SHARES?
NO
- ------------------------------------------------------------------------------------------------------------------------------------
12. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (10)
0.1%
- ------------------------------------------------------------------------------------------------------------------------------------
13. TYPE OF REPORTING PERSON
PN
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2 of 29
<PAGE> 3
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
CUSIP NUMBER 336453105 PAGE 3 OF 29 PAGES
-------- ---------
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. NAME OF REPORTING PERSON / S.S. OR I.R.S. IDENTIFICATION OF ABOVE PERSON
Hovde Capital, Inc. / 52-1891904
- -----------------------------------------------------------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b)
- -----------------------------------------------------------------------------------------------------------------------------------
3. SOURCE OF FUNDS
AF
- -----------------------------------------------------------------------------------------------------------------------------------
4. IS DISCLOSURE OF LEGAL PROCEEDING REQUIRED PURSUANT TO ITEMS 2(d) AND 2(e)
NO
- -----------------------------------------------------------------------------------------------------------------------------------
5. CITIZENSHIP OR PLACE OF ORIGIN
Incorporated: State of Delaware
- -----------------------------------------------------------------------------------------------------------------------------------
NUMBER OF 6. SOLE VOTING POWER
SHARES
OWNED BY -------------------------------------------------------------------------------------------
EACH 7. SHARED VOTING POWER
REPORTING 4,600 SHARES
PERSON WITH -------------------------------------------------------------------------------------------
8. SOLE DISPOSITIVE POWER
-------------------------------------------------------------------------------------------
9. SHARED DISPOSITIVE POWER
4,600 SHARES
- -----------------------------------------------------------------------------------------------------------------------------------
10. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,600 SHARES
- -----------------------------------------------------------------------------------------------------------------------------------
11. DOES THE AGGREGATE AMOUNT IN BOX 10 EXCLUDE CERTAIN SHARES?
NO
- -----------------------------------------------------------------------------------------------------------------------------------
12. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (10)
0.1%
- -----------------------------------------------------------------------------------------------------------------------------------
13. TYPE OF REPORTING PERSON
CO
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3 of 29
<PAGE> 4
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
CUSIP NUMBER 336453105 PAGE 4 OF 29 PAGES
-------- --------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. NAME OF REPORTING PERSON / S.S. OR I.R.S. IDENTIFICATION OF ABOVE PERSON
Financial Institution Partners II, L.P. / 36-4131559
- ------------------------------------------------------------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b)
- ------------------------------------------------------------------------------------------------------------------------------------
3. SOURCE OF FUNDS
WC OO
- ------------------------------------------------------------------------------------------------------------------------------------
4. IS DISCLOSURE OF LEGAL PROCEEDING REQUIRED PURSUANT TO ITEMS 2(d) AND 2(e)
NO
- ------------------------------------------------------------------------------------------------------------------------------------
5. CITIZENSHIP OR PLACE OF ORIGIN
Organized: State of Delaware
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF 6. SOLE VOTING POWER
SHARES
OWNED BY -------------------------------------------------------------------------------------------------
EACH 7. SHARED VOTING POWER
REPORTING 189,210 SHARES
PERSON WITH -------------------------------------------------------------------------------------------------
8. SOLE DISPOSITIVE POWER
-------------------------------------------------------------------------------------------------
9. SHARED DISPOSITIVE POWER
189,210 SHARES
- ------------------------------------------------------------------------------------------------------------------------------------
10. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
189,210 SHARES
- ------------------------------------------------------------------------------------------------------------------------------------
11. DOES THE AGGREGATE AMOUNT IN BOX 10 EXCLUDE CERTAIN SHARES?
NO
- ------------------------------------------------------------------------------------------------------------------------------------
12. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (10)
5.5%
- ------------------------------------------------------------------------------------------------------------------------------------
13. TYPE OF REPORTING PERSON
PN
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 4 of 29
<PAGE> 5
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
CUSIP NUMBER 336453105 PAGE 5 OF 29 PAGES
-------- ---------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. NAME OF REPORTING PERSON / S.S. OR I.R.S. IDENTIFICATION OF ABOVE PERSON
Hovde Capital, L.L.C. / 91-1825712
- ------------------------------------------------------------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b)
- ------------------------------------------------------------------------------------------------------------------------------------
3. SOURCE OF FUNDS
AF
- ------------------------------------------------------------------------------------------------------------------------------------
4. IS DISCLOSURE OF LEGAL PROCEEDING REQUIRED PURSUANT TO ITEMS 2(d) AND 2(e)
NO
- ------------------------------------------------------------------------------------------------------------------------------------
5. CITIZENSHIP OR PLACE OF ORIGIN
Organized: State of Nevada
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF 6. SOLE VOTING POWER
SHARES
OWNED BY -------------------------------------------------------------------------------------------------
EACH 7. SHARED VOTING POWER
REPORTING
PERSON WITH 189,210 SHARES
-------------------------------------------------------------------------------------------------
8. SOLE DISPOSITIVE POWER
-------------------------------------------------------------------------------------------------
9. SHARED DISPOSITIVE POWER
189,210 SHARES
- ------------------------------------------------------------------------------------------------------------------------------------
10. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
189,210 SHARES
- ------------------------------------------------------------------------------------------------------------------------------------
11. DOES THE AGGREGATE AMOUNT IN BOX 10 EXCLUDE CERTAIN SHARES?
NO
- ------------------------------------------------------------------------------------------------------------------------------------
12. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (10)
5.5%
- ------------------------------------------------------------------------------------------------------------------------------------
13. TYPE OF REPORTING PERSON
CO
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 5 of 29
<PAGE> 6
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
CUSIP NUMBER 336453105 PAGE 6 OF 29 PAGES
------- --------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. NAME OF REPORTING PERSON / S.S. OR I.R.S. IDENTIFICATION OF ABOVE PERSON
Hovde Acquisition, L.L.C. / 36-4009243
- ------------------------------------------------------------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b)
- ------------------------------------------------------------------------------------------------------------------------------------
3. SOURCE OF FUNDS
WC OO
- ------------------------------------------------------------------------------------------------------------------------------------
4. IS DISCLOSURE OF LEGAL PROCEEDING REQUIRED PURSUANT TO ITEMS 2(d) AND 2(e)
NO
- ------------------------------------------------------------------------------------------------------------------------------------
5. CITIZENSHIP OR PLACE OF ORIGIN
Organized: State of Illinois
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF 6. SOLE VOTING POWER
SHARES -------------------------------------------------------------------------------------------------
OWNED BY 7. SHARED VOTING POWER
EACH
REPORTING 51,200 SHARES
PERSON WITH -------------------------------------------------------------------------------------------------
8. SOLE DISPOSITIVE POWER
-------------------------------------------------------------------------------------------------
9. SHARED DISPOSITIVE POWER
51,200 SHARES
- ------------------------------------------------------------------------------------------------------------------------------------
10. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
51,200 SHARES
- ------------------------------------------------------------------------------------------------------------------------------------
11. DOES THE AGGREGATE AMOUNT IN BOX 10 EXCLUDE CERTAIN SHARES?
NO
- ------------------------------------------------------------------------------------------------------------------------------------
12. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (10)
1.5%
- ------------------------------------------------------------------------------------------------------------------------------------
13. TYPE OF REPORTING PERSON
CO
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 6 of 29
<PAGE> 7
ITEM 1. SECURITY AND BANK
The class of security to which this statement relates is the common
stock, no par value (the "Shares"), of First State Bancorporation (the
"Company"). The address of the principal executive offices of the Company is
7900 Jefferson NE, Albuquerque, NM 87109.
ITEM 2. IDENTITY AND BACKGROUND
The persons filing this statement are Financial Institution
Partners, L.P., Financial Institution Partners II, L.P. (the "Limited
Partnerships"), Hovde Capital, Inc., Hovde Capital, L.L.C. (the "General
Partners"), and Hovde Acquisition, L.L.C., who are collectively referred to
herein as the "Reporting Persons." The Limited Partnerships are Delaware limited
partnerships formed for the purpose of investing in, among other things, the
equity securities of various financial institutions. Hovde Capital, Inc., a
Delaware corporation, is the general partner of Financial Institution Partners,
L.P. Hovde Capital, L.L.C., a Nevada limited liability company, is the general
partner of Financial Institution Partners II, L.P. Hovde Acquisition, L.L.C. is
an Illinois limited liability company formed for the purpose of investing in,
among other things, the equity securities of various financial institutions.
Attached as Schedule 1 hereto and incorporated by reference herein
is a list containing the principal business and the address of its principal
business and office for the Limited Partnerships and the General Partners, as
well as information required by (a) through (f) of this Item as to each
executive officer, director and/or controlling person of the General Partners
who are Reporting Persons. The General Partners control the Limited
Partnerships.
None of the Reporting Persons or executive officers, directors or
controlling persons of the General Partners have, during the last five years,
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding of any violation with respect to such laws.
The Reporting Persons do not believe that they constitute a "group"
within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended. Nevertheless, the Reporting Persons are making this filing because
of the possibility that they may be deemed a group, although each of the
Reporting Persons disclaims any membership in, and the existence of, such a
group. Neither the making of this filing nor any statement contained herein
shall be deemed to be an admission by any of the Reporting Persons that a group
exists.
Page 7 of 29
<PAGE> 8
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Information regarding the source and amount of funds used by the
Reporting Persons in acquiring beneficial ownership of their Shares is set forth
in Schedule 2 attached hereto and incorporated herein by reference.
ITEM 4. PURPOSE OF TRANSACTION
The Reporting Persons have acquired the Shares for investment
purposes and as set forth below:
(a) Each of the Reporting Persons may independently acquire
additional Shares or dispose of some or all of its Shares.
(b) None.
(c) None.
(d) None.
(e) None.
(f) None.
(g) None.
(h) None.
(i) None.
(j) None.
ITEM 5. INTEREST IN SECURITIES OF THE COMPANY
(a), (b) Schedule 3 hereto, which is incorporated by reference
herein, sets forth, as of March 3, 1999, information relating to the aggregate
number of Shares of the Company and the percentage of the outstanding Shares of
the Company as of such date (based upon information provided by the Company,
there are 3,416,875 Shares outstanding as of that date) as to each of the
Reporting Persons. With respect to the Shares set forth on Schedule 3, by virtue
of their control over each respective Limited Partnership, all decisions
regarding voting and disposition of the Shares beneficially owned by each
Limited Partnership are made by its respective General Partner acting through
its chief executive officer or president. As such, the Limited Partnerships
Page 8 of 29
<PAGE> 9
and the General Partners share voting and investment power with respect to those
Shares. None of the General Partners, their executive officers, directors or
controlling persons beneficially owns any Shares personally or otherwise, except
for the Shares owned by the Partnerships.
(c) Schedule 4 hereto, which is incorporated by reference herein,
describes, as of March 3, 1999, transactions in the Shares effected during the
past sixty (60) days by the Reporting Persons.
(d) None.
(e) None.
Each of the Reporting Persons disclaims beneficial ownership of
Shares beneficially owned by any of the other Reporting Persons.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE COMPANY
None.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS
Exhibit A - Consent Agreement pursuant to 17 C.F.R. Section 13d-1(f)(1)
Exhibit B - [OMITTED - - FILED PURSUANT TO REQUEST FOR CONFIDENTIAL TREATMENT]
(Incorporated by reference to Amendment No. 1, filed with the
Securities and Exchange Commission (the "Commission") on December 1,
1998)]
Exhibit C - Customer Agreement between NationsBanc Montgomery Securities and
Financial Institution Partners II, L.P. (Incorporated by reference
to Amendment No. 1, filed with the Commission on December 1, 1998)
Exhibit D - Prime Broker Agreement between NationsBanc Montgomery Securities
and Financial Institution Partners II, L.P. (Incorporated by
reference to Amendment No. 1, filed with the Commission on December
1, 1998)
Exhibit E - Partnership Agreement between NationsBanc Montgomery Securities
and Financial Institution Partners II, L.P. (Incorporated by
reference to Amendment No. 1, filed with the Commission on December
1, 1998)
Exhibit F - Customer Agreement between NationsBanc Montgomery Securities and
Financial Institution Partners, L.P. (Incorporated by reference to
Amendment No. 1, filed with the Commission on December 1, 1998)
Exhibit G - Prime Broker Agreement between NationsBanc Montgomery Securities
and Financial Institution Partners, L.P. (Incorporated by reference
to Amendment No. 1, filed with the Commission on December 1, 1998)
Exhibit H - Partnership Agreement between NationsBanc Montgomery Securities
and Financial Institution Partners, L.P. (Incorporated by reference
to Amendment No. 1, filed with the Commission on December 1, 1998)
Page 9 of 29
<PAGE> 10
Exhibit I - Customer Agreement between NationsBanc Montgomery Securities and
Hovde Acquisition, L.L.C.
Exhibit J - Prime Broker Agreement between NationsBanc Montgomery Securities
and Hovde Acquisition, L.L.C.
Exhibit K - Limited Liability Company Agreement between NationsBanc
Montgomery Securities and Hovde Acquisition, L.L.C.
Page 10 of 29
<PAGE> 11
After reasonable inquiry and to the best of his/its knowledge and
belief, each of the undersigned Reporting Persons certifies that the
information set forth in this statement with respect to him/it is true,
complete and correct.
FINANCIAL INSTITUTION PARTNERS, L.P., by
its General Partner, HOVDE CAPITAL, INC.
By: /s/ Eric D. Hovde
--------------------------------------------
Eric D. Hovde
Its: President
HOVDE CAPITAL, INC.
By: /s/ Eric D. Hovde
--------------------------------------------
Eric D. Hovde
Its: President
FINANCIAL INSTITUTION PARTNERS II, L.P.,
by its General Partner, HOVDE CAPITAL, L.L.C.
By: /s/ Eric D. Hovde
--------------------------------------------
Eric D. Hovde
Its: Managing Member
HOVDE CAPITAL, L.L.C.
By: /s/ Eric D. Hovde
--------------------------------------------
Eric D. Hovde
Its: Managing Member
HOVDE ACQUISITION, L.L.C.
By: /s/ Eric D. Hovde
--------------------------------------------
Eric D. Hovde
Its: Managing Member
Dated: 3/3/99
--------------------
Page 11 of 29
<PAGE> 12
SCHEDULE 1
INFORMATION RELATING TO REPORTING PERSONS
<TABLE>
<CAPTION>
PRINCIPAL BUSINESS AND
ADDRESS OF PRINCIPAL BUSINESS
NAME OR PRINCIPAL OFFICE
---- ---------------------------------
<S> <C>
Financial Institution Partners, L.P. Limited partnership formed to make investments primarily in equity
securities of financial institutions.
1629 Colonial Parkway
Inverness, Illinois 60067
Organized: State of Delaware
Hovde Capital, Inc. Corporation formed to serve as the
general partner of Financial Institution Partners, L.P.
1629 Colonial Parkway
Inverness, Illinois 60067
Incorporated: State of Delaware
Financial Institution Partners II, L.P. Limited partnership formed to make investments primarily in equity
securities of financial institutions and financial services companies.
1629 Colonial Parkway
Inverness, Illinois 60067
Organized: State of Delaware
Hovde Capital, L.L.C. Limited liability company formed to serve as the general partner of
Financial Institution Partners II, L.P.
1629 Colonial Parkway
Inverness, Illinois 60067
Organized: State of Nevada
Hovde Acquisition, L.L.C. Limited liability company formed to make investments in equity
securities of financial institutions.
1824 Jefferson Place, N.W.
Washington, D.C. 20036
Organized: Illinois
</TABLE>
Page 12 of 29
<PAGE> 13
INFORMATION RELATING TO EXECUTIVE OFFICERS, DIRECTORS AND/OR
CONTROLLING PERSONS
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
ADDRESS BUSINESS ADDRESS CITIZENSHIP
------- ---------------- -----------
<S> <C> <C>
Steven D. Hovde(1) Investment banker U.S.
1629 Colonial Parkway Hovde Financial, Inc.
Inverness, Illinois 60067 1629 Colonial Parkway
Inverness, Illinois 60067
Investment banking firm
Eric D. Hovde(2) Investment banker U.S.
1826 Jefferson Place, NW Hovde Financial, Inc.
Washington, D.C. 20036 1826 Jefferson Place, NW
Washington, D.C. 20036
Investment banking firm
Braddock J. LaGrua(3) Investment banker U.S.
1826 Jefferson Place, NW Hovde Financial, Inc.
Washington, D.C. 20036 1826 Jefferson Place, NW
Washington, D.C. 20036
Investment banking firm
</TABLE>
- -------------------------------
(1) Steven D. Hovde is affiliated with the following Reporting Persons:
Chairman, CEO of Hovde Capital, Inc.; President, Treasurer of Hovde
Capital, L.L.C.; Executive Vice President, Treasurer of Hovde Acquisition,
L.L.C.
(2) Eric D. Hovde is affiliated with the following Reporting Persons: President
of Hovde Capital, Inc.; Chairman and CEO of Hovde Capital, L.L.C.;
President, Assistant Treasurer of Hovde Acquisition, L.L.C.
(3) Braddock J. LaGrua is affiliated with the following Reporting Persons:
Executive VP, Treasurer of Hovde Capital, Inc.; Senior Vice President of Hovde
Acquisition, L.L.C.
Page 13 of 29
<PAGE> 14
SCHEDULE 2
The following table sets forth the amount and source of funds used by
each Reporting Person in acquiring the Shares beneficially owned by it.
<TABLE>
<CAPTION>
AMOUNT
ORIGINALLY
TOTAL FINANCED/ SOURCE OF
NAME CONSIDERATION CURRENT BALANCE FUNDS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Financial $83,227.50 $29,129.62/ Working Capital/
Institution $54,097.88 Margin Account*
Partners, L.P.
Hovde Capital, $83,227.50 $29,129.62/ Working Capital/
Inc. $54,097.88 Margin Account of Affiliate*
Financial $4,191,361.26 $1,466,976.44/ Working Capital/
Institution $2,724,384.82 Margin Account **
Partners II, L.P.
Hovde Capital, $4,191,361.26 $1,466,976.44/ Working Capital/
L.L.C. $2,724,384.82 Margin Account of Affiliate*
Hovde Acquisition, $985,263.82 $344,842.34 Working Capital/
L.L.C. $640,421.48 Margin Account***
</TABLE>
- ---------------------------------------------
*$54,097.88 was financed through a margin account with NationsBanc Montgomery
Securities at Federal Funds rate +5/8.
**$2,724,384.82 was financed through a margin account with NationsBanc
Montgomery Securities at Federal Funds rate +5/8.
***$640,421.48 was financed through a margin account with NationsBanc
Montgomery Securities at Federal Funds rate +5/8.
Page 14 of 29
<PAGE> 15
SCHEDULE 3
The following table sets forth the number and approximate percentage of
Shares beneficially owned by each of the Reporting Persons. Each of the
Reporting Persons has shared power to vote or to direct the vote and to dispose
or to direct the disposition of the Shares of which each of them, respectively,
possesses beneficial ownership.
<TABLE>
<CAPTION>
APPROXIMATE
NAME NUMBER OF SHARES PERCENTAGE
- ---- ---------------- ----------
<S> <C> <C>
Financial Institution 4,600 0.1%
Partners, L.P.
Hovde Capital, Inc. 4,600 0.1%
Financial Institution 189,210 5.5%
Partners II, L.P.
Hovde Capital, L.L.C. 189,210 5.5%
Hovde Acquisition, L.L.C. 51,200 1.5%
- ---------------------------------------------------------------------------------------------
Aggregate Shares Held by 245,010 7.2%
Reporting Persons
</TABLE>
Page 15 of 29
<PAGE> 16
SCHEDULE 4
Description of Transactions in Shares Effected within 60 Days
The Reporting Persons effected the following transactions in the Shares within
sixty (60) days of March 3, 1999:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Transaction Number of Transaction Transaction Broker
Date Shares Price Type
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Hovde 3/2/99 5,000 $19.1875 Buy Bloomberg
Acquisition, Tradebook
L.L.C. --------------------------------------------------------------------------
2/26/99 35,000 $19.25 Buy Bloomberg
Tradebook
--------------------------------------------------------------------------
2/25/99 16,200 $19.1011 Buy Bloomberg
Tradebook
- ---------------------------------------------------------------------------------------------------
</TABLE>
Page 16 of 29
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Exhibit A Consent Agreement to 17 C.F.R. section 13d-1(f)(1) 19
Exhibit B [OMITTED - - FILED PURSUANT TO REQUEST
FOR CONFIDENTIAL TREATMENT] (Incorporated
by reference to Amendment No. 1, filed with the
Commission on December 1, 1998)](4)
Exhibit C - Customer Agreement between NationsBanc Montgomery
Securities and Financial Institution Partners II, L.P.
(Incorporated by reference to Amendment No.1 filed
with the Commission on December 1, 1998)
Exhibit D - Prime Broker Agreement between NationsBanc
Montgomery Securities and Financial Institution
Partners II, L.P. (Incorporated by reference to
Amendment No. 1 filed with the Commission on
December 1, 1998)
Exhibit E - Partnership Agreement between NationsBanc
Montgomery Securities and Financial Institution
Partners II, L.P. (Incorporated by reference to
Amendment No. 1 filed with the Commission on
December 1, 1998)
Exhibit F - Customer Agreement between NationsBanc
Montgomery Securities and Financial Institution
Partners, L.P. (Incorporated by reference to
Amendment No. 1 filed with the Commission on
December 1, 1998)
Exhibit G - Prime Broker Agreement between NationsBanc
Montgomery Securities and Financial Institution
Partners, L.P. (Incorporated by reference to
Amendment No. 1 filed with the Commission on
December 1, 1998)
Exhibit H - Partnership Agreement between NationsBanc
Montgomery Securities and Financial Institution
Partners, L.P. (Incorporated by reference to
Amendment No. 1 filed with the Commission on
December 1, 1998)
</TABLE>
- -----------------------------------------
(4) Portions of Exhibit 5 have been omitted pursuant to a request for
confidential treatment of information in accordance with Rule 24b-2 of the
Securities and Exchange Act of 1934.
Page 17 of 29
<PAGE> 18
<TABLE>
<S> <C> <C>
Exhibit I - Customer Agreement between NationsBanc 20
Montgomery Securities and Hovde Acquisition,
L.L.C.
Exhibit J - Prime Broker Agreement between NationsBanc 24
Montgomery Securities and Hovde Acquisition,
L.L.C.
Exhibit K - Limited Liability Agreement between NationsBanc 28
Montgomery Securities and Hovde Acquisition,
L.L.C.
</TABLE>
Page 18 of 29
<PAGE> 19
EXHIBIT A
Consent Agreement Pursuant to 17 C.F.R. Section 13d-1(f)(1)
Each of the undersigned hereby consents and agrees to the filing on
behalf of each of them of the foregoing joint statement on Schedule 13D
pursuant to 17 C.F.R. 13d-1(f)(1) with respect to his/its beneficial ownership
of the shares of the Issuer.
FINANCIAL INSTITUTION PARTNERS, L.P., by its General Partner,
HOVDE CAPITAL, INC.
By: /s/ Eric D. Hovde
---------------------------------------------------
Eric D. Hovde
Its: President
HOVDE CAPITAL, INC.
By: /s/ Eric D. Hovde
---------------------------------------------------
Eric D. Hovde
Its: President
FINANCIAL INSTITUTION PARTNERS II, L.P., by its General Partner,
HOVDE CAPITAL, L.L.C.
By: /s/ Eric D. Hovde
---------------------------------------------------
Eric D. Hovde
Its: Managing Member
HOVDE CAPITAL, L.L.C.
By: /s/ Eric D. Hovde
---------------------------------------------------
Eric D. Hovde
Its: Managing Member
HOVDE ACQUISITION, L.L.C.
By: /s/ Eric D. Hovde
---------------------------------------------------
Eric D. Hovde
Its: Managing Member
Dated: 3/3/1999
--------
Page 19 of 29
<PAGE> 20
EXHIBIT I
CUSTOMER AGREEMENT
This agreement sets forth the terms and conditions pursuant to which
we, NationsBanc Montgomery Securities LLC, and our successors and assigns, will
maintain your account for purchases and sales of "securities and other
property," which means, but is not limited to securities, financial
instruments, commodities and money of every kind and nature and related
contracts and options. This definition includes securities or other property
currently or hereafter held, carried or maintained by, or in the possession or
control of, us or any of our related entities for any purpose in and for any
account now or hereafter opened by you. You understand that, if your account is
a cash account, the provisions of paragraphs 18 & 19 are not binding upon you
unless you enter into a margin transaction and, if your account is a
commodities account, the provisions of paragraph 14 shall not be applicable.
1. APPLICABLE LAW AND REGULATIONS. All transactions in your account
shall be subject to all applicable laws and the rules and
regulations of all federal, state and self-regulatory agencies,
including, but not limited to, the Board of Governors of the
Federal Reserve System and the constitution, rules, customs and
usages of the exchange or market (and its clearing house) where
the transactions are executed.
2. SECURITY INTEREST AND LIEN. All securities or other property
which we may at any time be carrying or maintaining for you or
which may at any time be in our possession or control for any
purpose, including safekeeping, shall be subject to a general lien
for the discharge of all of your obligations to us, irrespective
of whether or not we have made advances in connection with such
securities or other property, and irrespective of the number of
accounts you may have with us.
3. DEPOSITS ON CASH TRANSACTIONS. If at any time NationsBanc
Montgomery Securities LLC considers it necessary for its
protection, it may in its discretion require you to deposit cash
or collateral in your account to assure due performance by you of
your open contractual commitments.
4. BREACH OR DEFAULT. In the event of any breach by you of any
agreement with us, or any default by you in any obligation to us,
or should you die or file a petition in bankruptcy or for the
appointment of a receiver by or against you, or should we for any
reason whatsoever deem it necessary for our protection, we are
hereby authorized, at our discretion, to sell any or all of the
securities and other property in any of your accounts which may be
in our possession or control, or which we may be carrying or
maintaining for you (either individually or jointly with others),
or to buy-in any securities or other property of which your
account or accounts may be short, or to cancel any other standing
orders, to close out your account or accounts in whole or in part
or in order to close out any commitment made on your behalf. Any
such sale, purchase or cancellation may be made according to our
judgment and may be made, at our discretion, on the exchange or
other market where such business is then usually transacted, or at
public auction or at private sale, without advertising the same
and without notice to you or to your personal representative, and
without prior tender, demand or call of any kind upon you, or upon
your personal representative (each of which is expressly waived by
you), and we may purchase the whole or any part thereof free from
any right of redemption, and you shall remain liable for any
deficiency; it being understood that a prior tender, demand, call
or notice of any kind shall not be considered a waiver of our
right to sell or buy any securities and/or other property held by
us, or owed us by you, at any time as hereinbefore provided.
Nothing in this agreement shall be construed as relieving you of
any obligations imposed by law.
5. FINALITY OF REPORTS. Reports of execution of orders and
statements of your accounts shall become conclusive if not
objected to in writing, the former within five days, and the
latter within ten days, after forwarding by us to you by mail or
otherwise.
6. RECEIPT OF TRUTH-IN-LENDING. You hereby acknowledge receipt and
review of NationsBanc Montgomery Securities LLC's Truth-In-Lending
disclosure statement contained here within. You understand that
interest will be charged on any debit balances in accordance with
the methods described in that statement or in any amendment or
revision thereto which may be provided to you. It is understood
and agreed that the interest charge made to your account at the
close of one charge period will be compounded, unless paid; that
is, the unpaid interest charge for previous periods will be added
to the opening balance for the next charge period, thereby
becoming part of the principal amount due and bearing like
interest.
7. TRANSFERS BETWEEN ACCOUNTS. At any time and from time to time, at
our discretion, we may without notice to you apply and/or transfer
any or all securities and/or other property of yours
interchangeably between any of your accounts.
Page 20 of 29
<PAGE> 21
8. SELL ORDERS. It is understood and agreed that you will designate
any sell order for a short account which you place with us as a
"short sale" and hereby authorize us to mark such order as being
"short," and when placing with us any order for a long account,
will designate it as such and hereby authorize us to mark such
order as being "long." Any sell order which you shall designate as
being for long account as above provided is for securities then
owned by you and, if such securities are not then deliverable by
us from any of your accounts, the placing of such order shall
constitute a representation by you that it is impracticable for
you to then deliver such securities to us but that you will
deliver them as soon as it is possible for you to do so without
undue inconvenience or expense.
9. AGE, BENEFICIAL INTEREST. If you are an individual, you represent
that you are of full legal age, and, in any event not less than
eighteen years of age. You further represent that no one except
you has an interest in your account with us.
10. OPERATIONAL MATTERS. NationsBanc Montgomery Securities LLC
primarily uses banks located in California and New York to issue
checks. Also, when we hold securities for your account, dividends
and interest are credited on or about the payable date as
received. Most of our customers prefer to have these funds held in
their accounts, and this will be the procedure which we will
follow with your account unless you advise us of an alternative
procedure which you would prefer. For example, we could arrange
for checks to be sent to you monthly. If you require special
arrangements, please bring the matter to our attention.
NationsBanc Montgomery Securities LLC's policy is not to receive
remuneration for directing orders to particular brokers/ dealers
or market centers for execution. Notwithstanding this policy,
should NationsBanc Montgomery Securities LLC receive such
remuneration on any transaction, appropriate disclosure will be
made.
11. CREDIT REPORT. NationsBanc Montgomery Securities LLC may, in its
discretion, request an investigative consumer report on you as a
credit reference, which report may include information with
respect to character, general reputation, personal characteristics
and mode of living. In accordance with the Fair Credit Reporting
Act, a copy of any such report, if obtained, will be made
available to you upon written request.
12. CLEARANCE ACCOUNTS. If NationsBanc Montgomery Securities LLC
carries your account as clearing broker by arrangement with
another broker through whose courtesy your account has been
introduced, then unless NationsBanc Montgomery Securities LLC
receives from you a written notice to the contrary, NationsBanc
Montgomery Securities LLC shall accept from such other broker,
without any inquiry or investigation by us, (i) orders for the
purchase and sale of securities and other property on margin or
otherwise, and (ii) any other instructions concerning said
account. You understand NationsBanc Montgomery Securities LLC
shall have no responsibility or liability to you for any acts or
omissions of such other broker, its officers, employees or agents.
13. WAIVER, ASSIGNMENT AND NOTICES. No term or provision of this
Agreement may be waived or modified unless in writing and signed
by the party against whom such waiver or modification is sought to
be enforced. NationsBanc Montgomery Securities LLC's failure to
insist at any time upon strict compliance with this Agreement or
with any of the terms hereunder or any continued course of such
conduct on its part shall in no event constitute or be considered
a waiver by NationsBanc Montgomery Securities LLC of any of its
rights or privileges. This Agreement contains the entire
understanding between you and NationsBanc Montgomery Securities
LLC concerning the subject matter of this Agreement. You may not
assign your rights or obligations hereunder without first
obtaining the prior written consent of NationsBanc Montgomery
Securities LLC. Notice or other communications, including margin
calls, delivered or mailed to the address given below shall, until
NationsBanc Montgomery Securities LLC has received notice in
writing of a different address, be deemed to have been personally
delivered to you.
14. ARBITRATION.
- - ARBITRATION IS FINAL AND BINDING ON THE PARTIES.
- - THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT,
INCLUDING THE RIGHT TO JURY TRIAL.
- - PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN AND
DIFFERENT FROM COURT PROCEEDINGS.
- - THE ARBITRATORS' AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS
OR LEGAL REASONING AND ANY PARTY'S RIGHT TO APPEAL OR TO SEEK
MODIFICATION OF RULINGS BY THE ARBITRATORS IS STRICTLY LIMITED.
Page 21 of 29
<PAGE> 22
- - THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF
ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES
INDUSTRY.
YOU AGREE, AND BY CARRYING AN ACCOUNT FOR YOU, WE AGREE, THAT ALL CONTROVERSIES
WHICH MAY ARISE BETWEEN US CONCERNING ANY TRANSACTION OR THE CONSTRUCTION,
PERFORMANCE OR BREACH OF THIS OR ANY OTHER AGREEMENT BETWEEN US, WHETHER
ENTERED INTO PRIOR, ON, OR SUBSEQUENT TO THE DATE HEREOF, SHALL BE DETERMINED
BY ARBITRATION. ANY ARBITRATION UNDER THIS AGREEMENT SHALL BE CONDUCTED ONLY IN
THE FORUMS PROVIDED BY THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. OR
THE BOARD OF GOVERNORS OF THE NEW YORK STOCK EXCHANGE, INC., AS YOU MAY ELECT.
IF YOU DO NOT MAKE SUCH ELECTION BY REGISTERED MAIL ADDRESSED TO NATIONSBANC
MONTGOMERY SECURITIES LLC, 600 MONTGOMERY STREET, SAN FRANCISCO, CA 94111,
ATTENTION: LEGAL DEPARTMENT, AND RECEIVED WITHIN FIVE DAYS AFTER DEMAND BY US
THAT YOU MAKE SUCH ELECTION, THEN NATIONSBANC MONTGOMERY SECURITIES LLC MAY
MAKE SUCH ELECTION. THE AWARD OF THE ARBITRATORS, OR OF THE MAJORITY OF THEM,
SHALL BE FINAL, AND JUDGMENT UPON ANY AWARD RENDERED BY THE ARBITRATORS MAY BE
ENTERED IN ANY COURT HAVING JURISDICTION THEREOF.
No person shall bring a putative or certified class action to arbitration, nor
seek to enforce any pre-dispute arbitration agreement against any person who
has initiated in court a putative class action or who is a member of a putative
class who has not opted out of the class with respect to any claims encompassed
by the putative class action until:
(i) the class certification is denied;
(ii) the class is decertified; or
(iii) the customer is excluded from the class by the court.
Such forbearance to enforce an agreement to arbitrate shall not constitute a
waiver of any rights under this agreement except to the extent stated herein.
15. NEW YORK LAW TO GOVERN. This Agreement and its enforcement shall
be governed by the laws of the State of New York (without regard
to any principles of conflicts of law) and its provisions shall be
continuous; shall cover individually and collectively all accounts
which you may open or reopen with us, and shall inure to the
benefit of our present organization, and any successor
organization, irrespective of any change or changes at any time in
the personnel thereof, for any cause whatsoever, and of the
assigns of our present organization or any successor organization,
and shall be binding upon you, and/or your estate, executors,
administrators, heirs and assigns.
16. PARTIAL UNENFORCEABILITY. If any provision herein is or should
become inconsistent with any present or future law, rule or
regulation of any sovereign government or a regulatory body having
jurisdiction over the subject matter of this Agreement or is held
to be invalid, void or unenforceable by reason of any law, rule,
administrative order or judicial decision, such provision shall be
deemed to be rescinded or modified in accordance with any such
law, rule, regulation, order or decision. In all other respects,
this Agreement shall continue and remain in full force and effect.
17. LIMIT ORDERS. NationsBanc Montgomery Securities LLC reserves the
right to not accept from customers limit orders in NASDAQ or
over-the-counter securities in which it acts as a market maker.
18. MARGIN IN MARGIN ACCOUNTS (NOT APPLICABLE TO CASH ACCOUNTS). You
hereby agree to maintain such margin in your margin account as
NationsBanc Montgomery Securities LLC may in its discretion
require and you agree to pay forthwith on demand any debit balance
owing with respect to any of your margin accounts, and if not paid
this shall be a breach of this Agreement and NationsBanc
Montgomery Securities LLC may take such action as it considers
necessary for its protection in accordance with this Agreement.
You understand that, even if NationsBanc Montgomery Securities LLC
has a policy of giving customers notice of a margin deficiency,
NationsBanc Montgomery Securities LLC is not obligated to request
additional margin from you, and there may be circumstances where
NationsBanc Montgomery Securities LLC will liquidate securities
and/or other property in your account without notice to you. You
will be charged interest on your debit balance which if not paid
at the close of an interest period will be added to the opening
balance for the next interest period. Please consult the attached
disclosure statement for an outline of NationsBanc Montgomery
Securities LLC's interest policies.
Page 22 of 29
<PAGE> 23
CASH/MARGIN
19. CUSTOMER'S CONSENT TO LOAN OR PLEDGE OF SECURITIES AND OTHER
PROPERTY (NOT APPLICABLE TO CASH ACCOUNTS). You hereby authorize
NationsBanc Montgomery Securities LLC to lend either to itself or
to others any securities and other property held by NationsBanc
Montgomery Securities LLC in your margin account and to carry all
such property in its general loans and such property may be
pledged, repledged, hypothecated or rehypothecated, without notice
to you, either separately or in common with other such property
for any amounts due to NationsBanc Montgomery Securities LLC
thereon or for a greater sum, and NationsBanc Montgomery
Securities LLC shall have no obligation to retain a like amount of
similar property in its possession and control.
BY SIGNING THIS AGREEMENT YOU ACKNOWLEDGE THAT THE SECURITIES IN
YOUR MARGIN ACCOUNT MAY BE LOANED TO NATIONSBANC MONTGOMERY SECURITIES LLC OR
LOANED OUT TO OTHERS AND THAT YOU HAVE RECEIVED AND REVIEWED A COPY OF THIS
AGREEMENT.
THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE AT PAGES
2-3 AT PARAGRAPH 14.
IF JOINT ACCOUNT BOTH PARTIES MUST SIGN. PERSONS SIGNING ON BEHALF
OF OTHERS PLEASE INDICATE TITLE OR CAPACITY IN WHICH YOU HAVE SIGNED.
Hovde Acquisition, L.L.C.
Richard J. Perry, Jr.
- --------------------------------------------------------------
(TYPED OR PRINTED NAME)
/s/ Richard J. Perry, Jr.
- --------------------------------------------------------------
(SIGNATURE)
- --------------------------------------------------------------
(SIGNATURE)
1824 Jefferson Place, N.W.
- --------------------------------------------------------------
(MAILING ADDRESS)
Washington DC 20036
- --------------------------------------------------------------
(CITY) (STATE) (ZIP)
2/11/99
- --------------------------------------------------------------
(DATE)
Acct.
No:
-----------------------------------------------------------
Page 23 of 29
<PAGE> 24
EXHIBIT J
NationsBanc Montgomery Securities LLC
PRIME BROKER AGREEMENT
In accordance with the requirements set forth in the January 25, 1994 No-Action
Letter of the Division of Market Regulation of the Securities and Exchange
Commission (the "No-Action Letter"), NationsBanc Montgomery Securities LLC
("NMS"), a North Carolina corporation, and each Customer on whose behalf this
agreement has been executed ("Customer"), hereby agree as follows.
1. As of October 3, 1994 or such later date when the No-Action Letter
shall become effective, this Agreement shall apply to all
transactions in which NMS is given up as the prime broker for
Customer; i.e. transactions executed for Customer by one or more
executing brokers (each, an "Executing Broker"), which
transactions are submitted to NMS for clearance and settlement.
2. If Customer is the beneficial owner of an account managed by an
Investment Advisor registered with the Securities and Exchange
Commission under the Investment Advisors Act of 1940 or such other
authorized agent, attorney-in-fact or third party ("Investment
Advisor"), then this Agreement has been executed on Customer's
behalf by such Investment Advisor. Each Customer on whose behalf
this Agreement has been executed is named on Schedule A hereto, as
such Schedule may be modified from time to time. Investment
Advisor represents and warrants that it has on file written
authorization to execute agreements on behalf of each Customer
named on Schedule A and shall indemnify and hold NMS harmless from
any claim or claims arising from Investment Advisor's unauthorized
execution of this Agreement on any such Customer's behalf.
3. All Executing Brokers through whom Customer or Investment Advisor,
as the case may be, is initially authorized to execute prime
brokerage transactions are identified on Schedule B hereto. Prior
to entering into a prime brokerage transaction with an Executing
Broker not identified on Schedule B. Customer or Investment
Advisor shall state in a writing sent via facsimile to NMS that it
desires to do so and confirm with NMS that a prime brokerage
agreement has been executed- between NMS and such Executing
Broker. Upon execution of a prime brokerage agreement between NMS
and such Executing Broker, Schedule B hereto shall be deemed
automatically amended to include such Executing Broker and, only
thereafter, may Customer execute prime brokerage transactions with
such Executing Broker pursuant to this Agreement.
4. Customer or Investment Advisor, as the case may be, will promptly
notify NMS of each transaction executed by an Executing Broker on
Customer's behalf, no later than the close of business on trade
date. At a minimum, such notice will include the security
involved, the number of shares or units, the price per share or
unit, whether the transaction was a long or short sale or a
purchase, the Executing Broker and the Executing Broker's
commission.
Page 24 of 29
<PAGE> 25
5. On the next business day following trade date, NMS will send to
Customer, or if requested in writing, to Investment Advisor,
notification confirming the details of each transaction executed
by Executing Broker on Customer's behalf, based upon the
information provided to NMS by Customer or Investment Advisor.
Such notification will include all information required for a
confirmation pursuant to Rule 10b-10 under the Securities Exchange
Act of 1934 ("Rule 10b-10"), except the capacity of the executing
broker, an average price designation, and, in principal trades,
the reported trade price and the difference between that price and
the net price to Customer, if this information has not been
provided to NMS by Customer or Investment Advisor. In addition,
the notification will disclose any transaction-based charges
imposed by NMS and any commission charged by Executing Broker.
6. NMS will settle transactions on Customer's behalf, unless, during
the time permitted for disaffirmations under the agreement then in
effect between NMS and Executing Broker, NMS disaffirms all
unsettled transactions of Customer that NMS determines to
disaffirm in good faith and in accordance with reasonable
commercial standards. NMS will promptly send to Customer or
Investment Advisor, as applicable, a notice of cancellation of all
disaffirmed transactions to offset any notifications sent
previously. NMS shall not be responsible for the clearance and
settlement of transactions that it disaffirms. Rather, Customer
shall be responsible and liable solely to Executing Broker(s) for
the clearance and settlement of such transactions.
7. Without limiting the generality of the foregoing, if Customer is
the beneficial owner of an account managed by an Investment
Advisor registered under the Investment Advisor's Act of 1940,
NMS, in its sole and absolute discretion, may elect not to settle
prime brokerage transactions on behalf of Customer if Customer
fails to maintain in its account with NMS minimum net equity of at
least $250,000 in cash or securities with a ready market as
defined in Rule 15c3-l(c)(11) under the Securities Exchange Act of
1934. Otherwise, if Customer is not the beneficial owner of an
account managed by an Investment Advisor registered under the
Investment Advisor's Act of 1940, NMS, in its sole and absolute
discretion, may elect not to settle prime brokerage transactions
on behalf of Customer if Customer fails to maintain in its account
with NMS minimum net equity of at least $1,000,000 in cash or
securities with a ready market as defined in Rule 15c3-l(c)(11)
under the Securities Exchange Act of 1934.
8. Furthermore, in the event net equity in Customer's account with
NMS falls below the minimum amount set forth in the No-Action
Letter, Customer shall have until 12:00 noon of the fifth business
day following the date on which net equity fell below the minimum
amount to restore net equity to the level required in the
No-Action Letter. If Customer fails to restore net equity to the
required level, NMS shall notify each Executing Broker, by the
same day's close of business, that NMS is no longer acting as
Prime Broker for Customer. As of the day following such notice,
NMS may not accept any prime brokerage transactions commenced on
behalf of Customer.
Page 25 of 29
<PAGE> 26
9. So long as this Agreement is in effect, NMS will be responsible to
ensure that all transactions which it has affirmed and not
subsequently disaffirmed, and is obligated to clear, are cleared
between NMS and Customer, and accordingly, appear on NMS's books
in either a cash or margin account for Customer and conform to
Regulation T promulgated by the Board of Governors of the Federal
Reserve System and applicable self-regulatory organization margin
requirements.
10. Customer may instruct, in a writing separate from the prime
brokerage agreement between Customer and Executing Broker,
Executing Broker to send confirmations of transactions, as
required by Rule l0b-10, to Customer in care of NMS.
Confirmations received by NMS on Customer's behalf are available
to Customer without charge, promptly upon request. The parties
acknowledge that providing such an instruction is not a condition
to entering into this Agreement, nor shall Customer be charged
differential fees or otherwise receive incentives for providing
such an instruction.
11. NMS is hereby authorized to disclose Customer's name and address
to each Executing Broker identified on Schedule B. as such
Schedule may be modified from time to time, to enable such
Executing Broker to establish on its books an account for Customer
to be used in the event transactions are disaffirmed by NMS.
12. NMS will issue to Customer a statement of account at least on a
quarterly basis. The statement will include all transactions that
occurred during the statement period and the resultant security
positions and money balances.
13. Customer represents and warrants that it is currently in
compliance, and during the term of this Agreement will remain in
compliance, with all applicable requirements of the No-Action
Letter, and any supplements or amendments thereto; including, in
particular, the requirement that it execute an agreement similar
to this Agreement with each Executing Broker at any point in time
identified on Schedule B.
14. In the event of an inconsistency between any term or terms of this
Agreement and those of any Cash Account Agreement, Margin
Agreement or Clearing Agreement between the parties, this
Agreement shall control to the extent of such inconsistency.
15. This Agreement may be amended or modified only by NMS upon prior
written notice to Investment Advisor or Customer. Such amendment
or modification shall become effective immediately in the event
Customer continues to accept prime brokerage services from NMS
after the date on which such notice is given.
16. This Agreement may be terminated by either party hereto upon prior
written notice. Any such termination shall not affect Customer's
liabilities and obligations to NMS with respect to transactions
executed prior to such termination.
17. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to
the conflict of law principles thereof.
Page 26 of 29
<PAGE> 27
18. (a) ARBITRATION IS FINAL AND BINDING ON THE PARTIES.
(b) THE PARTIES ARE WAIVING THEIR RIGHTS TO SEEK REMEDIES IN
COURT, INCLUDING THE RIGHT TO A JURY TRIAL.
(c) PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN AND
DIFFERENT FROM COURT PROCEEDINGS.
(d) THE ARBITRATORS' AWARD IS NOT REQUIRED TO INCLUDE FACTUAL
FINDINGS OR LEGAL REASONING AND ANY PARTY'S RIGHT TO APPEAL
OR SEEK MODIFICATIONS OR RULINGS BY THE ARBITRATORS IS
STRICTLY LIMITED.
(e) THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF
ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES
INDUSTRY.
ANY CONTROVERSY BETWEEN NMS OR ANY OF ITS AFFILIATES OR ANY OF ITS OR THEIR
PARTNERS, OFFICERS, DIRECTORS OR EMPLOYEES ON THE ONE HAND, AND CUSTOMER AND/OR
INVESTMENT ADVISOR ON THE OTHER HAND, ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE ACCOUNTS ESTABLISHED HEREUNDER, SHALL BE SETTLED BY
ARBITRATION, IN ACCORDANCE WITH THE RULES THEN OBTAINING OF THE NEW YORK STOCK
EXCHANGE, INC. (OR SUCH OTHER ARBITRATION PANEL OR BOARD AS MAY BE REQUIRED BY
LAW). ANY AWARD OF THE ARBITRATORS SHALL BE FINAL, AND JUDGMENT UPON THE AWARD
RENDERED MAY BE ENTERED IN ANY COURT, STATE OR FEDERAL, HAVING JURISDICTION.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement, WHICH IS
ACKNOWLEDGED TO CONTAIN A PRE-DISPUTE ARBITRATION CLAUSE, to be duly executed
and delivered as of the date set forth below.
Hovde Acquisition, L.L.C.
- ---------------------------------------------
CUSTOMER OR INVESTMENT ADVISOR ACCEPTED AND AGREED TO:
NATIONSBANC MONTGOMERY
By: HOVDE CAPITAL, L.L.C., general partner SECURITIES LLC AS PRIME BROKER
By: /s/ Richard J. Perry, Jr. By:
----------------------------------------- --------------------------
Richard J. Perry, Jr., Secretary
- --------------------------------------------- ------------------------------
Print Name and Title Print Name and Title
Date: 2/11/99 Date:
---------------------------------------- -------------------------
Page 27 of 29
<PAGE> 28
EXHIBIT K
NationsBanc Montgomery Securities LLC
---------------------------
ACCOUNT NUMBER
---------------------------
ACCOUNT NAME
LIMITED LIABILITY COMPANY AGREEMENT
Ladies and Gentlemen:
In consideration of your opening and carrying a partnership account in the name
of Hovde Acquisition, L.L.C. a duly organized limited liability company (the
"LLC") of which each of the undersigned is a general partner, the undersigned
jointly and severally agree that each of the following persons, to wit:
Eric D. Hovde Richard J. Perry, Jr.
- ------------- ---------------------------
Steven D. Hovde
- --------------- ---------------------------
are hereby appointed the authorized agents and attorneys-in-fact of the LLC
(the "Authorized Agents"), and shall have authority on behalf of the LLC, and
for its account and risk, to buy, sell (including short sales), tender,
convert, exchange, trade and otherwise deal in, through you as brokers, stocks,
bonds, options and any other securities (on margin or otherwise) in accordance
with your terms and conditions for the LLC account.
You are authorized to follow the instructions of the Authorized Agents in every
respect concerning said account, and to deliver to them on behalf of the LLC
account all demands, notices, confirmations, reports, statements of accounts,
and communications of every kind; to deliver to them on behalf of the LLC
account money, securities and property of every kind, and to follow the orders
of said Authorized Agents regarding the same. The Authorized Agents are hereby
authorized to execute and deliver on behalf of the LLC account agreements
relating to any of the foregoing matters and to terminate or modify same or
waive any of the provisions thereof; and generally to deal with you on behalf
of the LLC account as fully and completely as if each alone were interested in
said accounts, all without notice to the other or others interested in said
account.
This Authorization and indemnity is in addition to, and in no way limits or
restricts, any rights which you have under any other agreement or agreements
between you and the undersigned, or any of them, now existing or hereafter
entered into, and is binding on the LLC and its legal representatives,
successors and assigns. This authorization and indemnity is also a continuing
one and shall remain in full force and effect until revoked by a written
notice, addressed to you and delivered to you at your principal office in San
Francisco. No such revocation shall affect any liability arising out of any
transaction initiated prior to such revocation. The undersigned, jointly and
severally agree to indemnify and hold you harmless from and to pay you promptly
on demand any debit balance in said account, including any loss or debit
balance resulting from transactions initiated prior to receipt of such
revocation.
The undersigned hereby certify that the members of said LLC are as follows: *
Name N/A Occupation
----------------------------- -----------------------------
Name Occupation
----------------------------- -----------------------------
Name Occupation
----------------------------- -----------------------------
*or attach signature page(s) of LLC's Operating Agreement
Page 28 of 29
<PAGE> 29
Name Occupation
----------------------------- -----------------------------
Name Occupation
----------------------------- -----------------------------
Name Occupation
----------------------------- -----------------------------
Name Occupation
----------------------------- -----------------------------
Name Occupation
----------------------------- -----------------------------
Name Occupation
----------------------------- -----------------------------
Name Occupation
----------------------------- -----------------------------
Name Occupation
----------------------------- -----------------------------
Name Occupation
----------------------------- -----------------------------
Name Occupation
----------------------------- -----------------------------
The undersigned further authorizes you, in the event of death or retirement of
any of the general and/or limited partners of said LLC, to take such
proceedings, require such papers, retain such portions or restrict transactions
in said account as you may deem advisable to protect you against any liability,
penalty or loss under any present or future laws or otherwise. It is further
agreed that in the event of the death or retirement of any member of the said
LLC the remaining members will immediately cause you to be notified of such
fact.
This Authorization and indemnity and its enforcement shall be governed by the
laws of the State of New York, shall cover individually and collectively all
accounts covered by this agreement and authorization which the undersigned may
open or reopen with you, and shall inure to the benefit of your present
organization, and any successor organization, irrespective of any change or
changes of any kind of the personnel thereof for any cause whatsoever, and of
the assigns of your present organization or any successor organization.
CUSTOMER CONSENT TO LOAN OR PLEDGE OF SECURITIES AND OTHER PROPERTY (NOT
APPLICABLE TO CASH ACCOUNTS): each of the undersigned has signed the enclosed
Customer's Agreement and Customer's Loan Consent which are intended to cover,
in addition to the provisions hereof, the terms upon which the LLC is to be
carried.
Dated: 2/11/99 By:/s/ Eric D. Hovde.
------------------------- -------------------------------------
Managing Member(s)
-------------------------------------
-------------------------------------
Page 29 of 29
