<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
SCHEDULE 13D
UNDER THE EXCHANGE ACT OF 1934
(Amendment No. )
MB FINANCIAL, INC.
- --------------------------------------------------------------------------
(Name of Company)
COMMON STOCK
- --------------------------------------------------------------------------
(Title and Class of Securities)
55263D107
- --------------------------------------------------------------------------
(CUSIP Number)
Richard J. Perry, Jr., Esquire
Perry & Bagheri, 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)
May 15, 2000
- --------------------------------------------------------------------------
(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 [ X ].
(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 61 Pages Exhibit Index at page 19
<PAGE> 2
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
CUSIP NUMBER 55263D107
- --------------------------------------------------------------------------
<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)X
(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 -----------------------------------------------------------
REPORTING 7. SHARED VOTING POWER
PERSON WITH
277,938 SHARES
-----------------------------------------------------------
8. SOLE DISPOSITIVE POWER
-----------------------------------------------------------
9. SHARED DISPOSITIVE POWER
277,938 SHARES
- --------------------------------------------------------------------------
10. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
277,938 SHARES
- --------------------------------------------------------------------------
11. DOES THE AGGREGATE AMOUNT IN BOX 10 EXCLUDE CERTAIN SHARES?
NO
- --------------------------------------------------------------------------
12. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (10)
3.9%
- --------------------------------------------------------------------------
13. TYPE OF REPORTING PERSON
PN
- --------------------------------------------------------------------------
</TABLE>
Page 2 of 61 Pages
<PAGE> 3
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
CUSIP NUMBER 55263D107
- --------------------------------------------------------------------------
<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)X
(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 Delaware
- --------------------------------------------------------------------------
NUMBER OF 6. SOLE VOTING POWER
SHARES
OWNED BY
EACH -----------------------------------------------------------
REPORTING 7. SHARED VOTING POWER
PERSON WITH
277,938 SHARES
-----------------------------------------------------------
8. SOLE DISPOSITIVE POWER
-----------------------------------------------------------
9. SHARED DISPOSITIVE POWER
277,938 SHARES
- --------------------------------------------------------------------------
10. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
277,938 SHARES
- --------------------------------------------------------------------------
11. DOES THE AGGREGATE AMOUNT IN BOX 10 EXCLUDE CERTAIN SHARES?
NO
- ------------------------------------------------------------------------
12. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (10)
3.9%
- --------------------------------------------------------------------------
13. TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------
</TABLE>
Page 3 of 61 Pages
<PAGE> 4
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
CUSIP NUMBER 55263D107
- --------------------------------------------------------------------------
<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)X
(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
State of Delaware
- --------------------------------------------------------------------------
NUMBER OF 6. SOLE VOTING POWER
SHARES
OWNED BY
EACH -----------------------------------------------------------
REPORTING 7. SHARED VOTING POWER
PERSON WITH
45,500 SHARES
-----------------------------------------------------------
8. SOLE DISPOSITIVE POWER
-----------------------------------------------------------
9. SHARED DISPOSITIVE POWER
45,500 SHARES
- --------------------------------------------------------------------------
10. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
45,500 SHARES
- --------------------------------------------------------------------------
11. DOES THE AGGREGATE AMOUNT IN BOX 10 EXCLUDE CERTAIN SHARES?
NO
- --------------------------------------------------------------------------
12. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (10)
0.6%
- --------------------------------------------------------------------------
13. TYPE OF REPORTING PERSON
PN
- --------------------------------------------------------------------------
</TABLE>
Page 4 of 61 Pages
<PAGE> 5
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
CUSIP NUMBER 55263D107
- --------------------------------------------------------------------------
<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)X
(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 -----------------------------------------------------------
REPORTING 7. SHARED VOTING POWER
PERSON WITH
45,500 SHARES
-----------------------------------------------------------
8. SOLE DISPOSITIVE POWER
-----------------------------------------------------------
9. SHARED DISPOSITIVE POWER
45,500 SHARES
- --------------------------------------------------------------------------
10. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
45,500 SHARES
- --------------------------------------------------------------------------
11. DOES THE AGGREGATE AMOUNT IN BOX 10 EXCLUDE CERTAIN SHARES?
NO
- --------------------------------------------------------------------------
12. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (10)
0.6%
- --------------------------------------------------------------------------
13. TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------
</TABLE>
Page 5 of 61 Pages
<PAGE> 6
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
CUSIP NUMBER 55263D107
- --------------------------------------------------------------------------
<S> <C>
1. NAME OF REPORTING PERSON / S.S. OR I.R.S. IDENTIFICATION OF
ABOVE PERSON
Financial Institution Partners III, L.P. / 52-2199979
- --------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)X
(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
State of Delaware
- --------------------------------------------------------------------------
NUMBER OF 6. SOLE VOTING POWER
SHARES
OWNED BY
EACH -----------------------------------------------------------
REPORTING 7. SHARED VOTING POWER
PERSON WITH
31,000 SHARES
-----------------------------------------------------------
8. SOLE DISPOSITIVE POWER
-----------------------------------------------------------
9. SHARED DISPOSITIVE POWER
31,000 SHARES
- --------------------------------------------------------------------------
10. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
31,000 SHARES
- --------------------------------------------------------------------------
11. DOES THE AGGREGATE AMOUNT IN BOX 10 EXCLUDE CERTAIN SHARES?
NO
- --------------------------------------------------------------------------
12. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (10)
0.5%
- --------------------------------------------------------------------------
13. TYPE OF REPORTING PERSON
PN
- --------------------------------------------------------------------------
</TABLE>
Page 6 of 61 Pages
<PAGE> 7
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
CUSIP NUMBER 55263D107
- --------------------------------------------------------------------------
<S> <C>
1. NAME OF REPORTING PERSON / S.S. OR I.R.S. IDENTIFICATION OF
ABOVE PERSON
Hovde Capital, Ltd. / 52-2199941
- --------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)X
(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
State of Nevada
- -------------------------------------------------------------------------
NUMBER OF 6. SOLE VOTING POWER
SHARES
OWNED BY
EACH -----------------------------------------------------------
REPORTING 7. SHARED VOTING POWER
PERSON WITH
31,000 SHARES
-----------------------------------------------------------
8. SOLE DISPOSITIVE POWER
-----------------------------------------------------------
9. SHARED DISPOSITIVE POWER
31,000 SHARES
- --------------------------------------------------------------------------
10. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
31,000 SHARES
- --------------------------------------------------------------------------
11. DOES THE AGGREGATE AMOUNT IN BOX 10 EXCLUDE CERTAIN SHARES?
NO
- --------------------------------------------------------------------------
12. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (10)
0.5%
- --------------------------------------------------------------------------
13. TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------
</TABLE>
Page 7 of 61 Pages
<PAGE> 8
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
CUSIP NUMBER 55263D107
- --------------------------------------------------------------------------
<S> <C>
1. NAME OF REPORTING PERSON / S.S. OR I.R.S. IDENTIFICATION OF
ABOVE PERSON
Eric D. Hovde / ###-##-####
- --------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)X
(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
USA
- --------------------------------------------------------------------------
NUMBER OF 6. SOLE VOTING POWER
SHARES
OWNED BY
EACH -----------------------------------------------------------
REPORTING 7. SHARED VOTING POWER
PERSON WITH(1)
354,438 SHARES
-----------------------------------------------------------
8. SOLE DISPOSITIVE POWER
-----------------------------------------------------------
9. SHARED DISPOSITIVE POWER
354,438 SHARES
- --------------------------------------------------------------------------
10. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
354,438 SHARES
- --------------------------------------------------------------------------
11. DOES THE AGGREGATE AMOUNT IN BOX 10 EXCLUDE CERTAIN SHARES?
NO
- --------------------------------------------------------------------------
12. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (10)
5.0%
- --------------------------------------------------------------------------
13. TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------
(1) Of the 354,438 Shares beneficially owned by Eric D. Hovde, 277,938 are
as controlling shareholder of Hovde Capital, Inc., 45,500 are as managing
member of Hovde Capital, L.L.C. and 31,000 are as managing member of Hovde
Capital, Ltd.
</TABLE>
Page 8 of 61 Pages
<PAGE> 9
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
CUSIP NUMBER 55263D107
- --------------------------------------------------------------------------
<S> <C>
1. NAME OF REPORTING PERSON / S.S. OR I.R.S. IDENTIFICATION OF
ABOVE PERSON
Steven D. Hovde / ###-##-####
- --------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)X
(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
USA
- --------------------------------------------------------------------------
NUMBER OF 6. SOLE VOTING POWER
SHARES
OWNED BY 14,800
EACH -----------------------------------------------------------
REPORTING 7. SHARED VOTING POWER
PERSON WITH(2)
354,438 SHARES
-----------------------------------------------------------
8. SOLE DISPOSITIVE POWER
14,800
-----------------------------------------------------------
9. SHARED DISPOSITIVE POWER
354,438 SHARES
- --------------------------------------------------------------------------
10. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
369,238 SHARES
- --------------------------------------------------------------------------
11. DOES THE AGGREGATE AMOUNT IN BOX 10 EXCLUDE CERTAIN SHARES?
NO
- --------------------------------------------------------------------------
12. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (10)
5.2%
- --------------------------------------------------------------------------
13. TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------
(2) Of the 369,238 Shares beneficially owned by Steven D. Hovde, 277,938
are as controlling shareholder of Hovde Capital, Inc., 45,500 are as
managing member of Hovde Capital, L.L.C., 31,000 are as managing member of
Hovde Capital, Ltd. and 14,800 are owned directly.
</TABLE>
Page 9 of 61 Pages
<PAGE> 10
Item 1. Security and Issuer
The class of security to which this statement relates is the common
stock (the "Shares"), of MB Financial, Inc., formerly Avondale Financial
Corp. (the "Issuer"). The address of the principal executive offices of
the Issuer is 1200 North Ashland Avenue, Chicago, Illinois 60622.
Item 2. Identity and Background
The persons filing this statement are and Financial Institution
Partners, L.P., Financial Institution Partners II, L.P., Financial
Institution Partners III, L.P. (the "Limited Partnerships"), Hovde Capital,
Inc., Hovde Capital, L.L.C., Hovde Capital, Ltd. (the "General Partners"),
Eric D. Hovde, and Steven D. Hovde who are collectively referred to herein
as the "Reporting Persons." The Limited Partnerships are Delaware limited
partnerships formed for the purposes of investing in, among other things,
the equity securities of various financial institutions and financial
services companies. 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 Capital, Ltd., a Nevada
limited liability company, is the general partner of Financial Institution
Partners III, L.P.
Eric D. Hovde and Steven D. Hovde each hold beneficial interests in
the Shares through ownership of an interest in, and positions as members
and officers of the General Partners. Eric D. Hovde and Steven D. Hovde
are also directors and executive officers of Hovde Financial, Inc. ("Hovde
Financial"). Hovde Financial does not beneficially own any of the Shares.
Attached as Schedule 1 hereto and incorporated by reference herein is
a list containing the principal businesses and the addresses of their
principal businesses and offices 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.
Page 10 of 61
<PAGE> 11
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 Issuer
(a), (b) Schedule 3 hereto, which is incorporated by reference herein,
sets forth, as of May 25, 2000, information relating to the aggregate
number of Shares of the Issuer and the percentage of the outstanding Shares
of the Issuer as of such date (based upon information provided by the
Issuer, there are 7,064,515 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 the Limited Partnerships, all decisions
regarding voting and disposition of the Shares beneficially owned by the
Limited Partnerships are made by the General Partners acting through their
chief executive officer or president. As such, the Limited Partnerships
and the General Partners share voting and investment power with respect to
the Shares. Therefore, as a result of their ownership interest in, and
positions as members and officers of the General Partners, Eric D. Hovde
and Steven D. Hovde may be deemed to have beneficial ownership of the
Shares. Neither the General Partners, its executive officers or
controlling persons beneficially owns any Shares personally or otherwise,
except for the Shares beneficially owned by Steven D. Hovde.
Page 11 of 61 Pages
<PAGE> 12
(c) Schedule 4 hereto, which is incorporated by reference herein,
describes, as of May 25, 2000, 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 Issuer
None.
Item 7. Materials to be filed as Exhibits
Exhibit A - Consent Agreement pursuant to 17 C.F.R. 13d-1(f)(1)
Exhibit B - [OMITTED - - FILED PURSUANT TO REQUEST FOR CONFIDENTIAL
TREATMENT]
Exhibit C - Customer Agreement between NationsBanc Montgomery Securities
and Financial Institution Partners, L.P.
Exhibit D - Prime Broker Agreement between NationsBanc Montgomery
Securities and Financial Institution Partners, L.P.
Exhibit E - Partnership Agreement between NationsBanc Montgomery
Securities and Financial Institution Partners, L.P.
Exhibit F - Customer Agreement between NationsBanc Montgomery Securities
and Financial Institution Partners II, L.P.
Exhibit G - Prime Broker Agreement between NationsBanc Montgomery
Securities and Financial Institution Partners II, L.P.
Exhibit H - Partnership Agreement between NationsBanc Montgomery
Securities and Financial Institution Partners II, L.P.
Exhibit I - Customer Agreement between Banc of America Securities and
Financial Institution Partners III, L.P.
Exhibit J - Prime Broker Agreement between Banc of America Securities
and Financial Institution Partners III, L.P.
Exhibit K - Partnership Agreement between Banc of America Securities and
Financial Institution Partners III, L.P.
Page 12 of 61
<PAGE> 13
Signatures
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 INSTITUTIONS 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
FINANCIAL INSTITUTION PARTNERS III, L.P., by its
General Partner, HOVDE CAPITAL, LTD.
By: /s/ Eric D. Hovde
--------------------------------------------
Eric D. Hovde
Its: Managing Member
HOVDE CAPITAL, LTD.
By: /s/ Eric D. Hovde
--------------------------------------------
Eric D. Hovde
Its: Managing Member
ERIC D. HOVDE
/s/ Eric D. Hovde
---------------------------------------------
STEVEN D. HOVDE
/s/ Steven D. Hovde
---------------------------------------------
Dated: 5/25/00
----------
Page 13 of 61
<PAGE> 14
Schedule 1
INFORMATION RELATING TO REPORTING PERSONS
<TABLE>
<CAPTION>
Principal Business and
Address of Principal Business
Name or Principal Office
---- ------------------------------
<S> <C>
Financial Institution Limited partnership formed to make
Partners, L.P. investments primarily in equity
Securities of financial
institutions
and financial services companies.
1824 Jefferson Place, N.W.
Washington, D.C. 20036
Organized: State of Delaware
Hovde Capital, Inc. Corporation formed to serve as the
general partner of Financial
Institution Partners, L.P.
1824 Jefferson Place, N.W.
Washington, D.C. 20036
Organized: State of Delaware
Financial Institution Limited partnership formed to make
Partners II, L.P. investments primarily in equity
securities of financial
institutions and financial services
companies.
1824 Jefferson Place, N.W.
Washington, D.C. 20036
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.
1824 Jefferson Place, NW
Washington, DC 20036
Organized: State of Nevada
Financial Institution Limited partnership formed to make
Partners III, L.P. investments primarily in equity
securities of financial
institutions and financial services
companies.
1824 Jefferson Place, N.W.
Washington, D.C. 20036
Organized: State of Delaware
Hovde Capital, Ltd. Limited liability company formed to
Serve as the general partner of
Financial Institution
Partners III, L.P.
1824 Jefferson Place, NW
Washington, DC 20036
Organized: State of Nevada
Page 14 of 61
<PAGE> 15
Eric D. Hovde Investment banker
Hovde Financial, Inc.
1826 Jefferson Place, N.W.
Washington, D.C. 20036
Steven D. Hovde Investment Banker
Hovde Financial, Inc.
1629 Colonial Parkway
Inverness, Illinois 60067
</TABLE>
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(3) 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 (4) Investment banker U.S.
1826 Jefferson Place, N.W. Hovde Financial, Inc.
Washington, D.C. 20036 1826 Jefferson Place, N.W.
Washington, D.C. 20036
Investment banking firm
</TABLE>
- ---------------------------------------------------------------------------
- ----
(3) Steven D. Hovde is affiliated with the following Reporting Persons:
Chairman and Chief Executive Officer of Hovde Capital, Inc.; President,
Treasurer of Hovde Capital, L.L.C.; President and Treasurer of Hovde
Capital, Ltd.
(4) Eric D. Hovde is affiliated with the following Reporting Persons:
President of Hovde Capital, Inc.; Chairman and CEO of Hovde Capital,
L.L.C.; Chairman and CEO of Hovde Capital, Ltd.;
Page 15 of 61
<PAGE> 16
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 $3,741,682.94 $1,309,589.03/ Working
Capital/
Institution $2,432,093.91 Margin Account
(5)
Partners, L.P.
Hovde Capital, $3,741,682.94 $1,309,589.03/ Working
Capital/
Inc. $2,432,093.91 Margin Account
of
Affiliate (5)
Financial $566,633.50 $198,321.73/ Working
Capital/
Institution $368,311.77 Margin Account
(6)
Partners II, L.P.
Hovde Capital, $566,633.50 $198,321.73/ Working
Capital/
L.L.C. $368,311.77 Margin Account
of
Affiliate (6)
Financial $312,734.00 $109,456.90/ Working
Capital/
Institution $203,277.10 Margin Account
(7)
Partners III, L.P.
Hovde Capital, $312,734.00 $109,456.90/ Working
Capital/
Ltd. $203,277.10 Margin Account
of
Affiliate (7)
Steven D. Hovde $287,500.00 $100,625.00/ Working
Capital/
$186,875.00 Margin Account
(8)
</TABLE>
- -----------------------------------------------------
(5) $2,432,093.91 was financed through a margin account with Banc of
America Securities at Federal Funds rate +5/8.
(6) $368,311.77 was financed through a margin account with Banc of America
Securities at Federal Funds rate +5/8.
(7) $203,277.10 was financed through a margin account with Banc of America
Securities at Federal Funds rate +5/8.
(8) $186,875.00 was financed through a margin account with Banc of America
Securities at Federal Funds rate +5/8.
Page 16 of 61
<PAGE> 17
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 277,938 3.9%
Partners, L.P.
Hovde Capital, Inc. 277,938 3.9%
Financial Institution 45,500 0.6%
Partners II, L.P.
Hovde Capital, L.L.C. 45,500 0.6%
Financial Institution 31,000 0.5%
Partners III, L.P.
Hovde Capital, Ltd. 31,000 0.5%
Steven D. Hovde 14,800 0.2%
- ---------------------------------------------------------------------------
- ----
Aggregate Shares Held by 369,238 5.2%
Reporting Persons
</TABLE>
Page 17 of 61
<PAGE> 18
SCHEDULE 4
Description of Transactions in Shares Effected Within 60 Days.
The Reporting Persons had effected the following transactions in the Shares
within sixty (60) days of May 15, 2000:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
Transaction Number of Transaction Transaction
Broker
Date Shares Price Type
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Financial 5/12/00 3,500 $11.25 Buy Sandler
Institution
Partners II, 5/10/00 1,000 $11.125 Buy Sandler
L.P.
Financial 5/15/00 2,000 $11.25 Buy Sandler
Institution
Partners III, 5/9/00 2,500 $11.125 Buy Sandler
L.P.
5/3/00 2,500 $11.0625 Buy Sandler
5/2/00 1,500 $11 Buy Sandler
4/27/00 2,500 $10.5625 Buy Sandler
4/20/00 2,500 $9.5 Buy Sandler
4/19/00 5,000 $9.25 Buy Sandler
3/30/00 2,500 $10 Buy Sandler
3/20/00 5,000 $9.6563 Buy Sandler
3/17/00 5,000 $9.6875 Buy Sandler
5/16/00 1,000 $11.25 Buy Sandler
5/19/00 3,500 $11.25 Buy Sandler
5/24/00 3,500 $11.25 Buy Sandler
</TABLE>
Page 18 of 61
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Exhibit A - Consent Agreement to 17 C.F.R. 13d-1(f)(1) 20
Exhibit B - [OMITTED - - FILE PURSUANT TO REQUEST 21
FOR CONFIDENTIAL TREATMENT] (9)
Exhibit C - Customer Agreement between NationsBanc 22
Montgomery Securities and Financial Institution
Partners, L.P.
Exhibit D - Prime Broker Agreement between NationsBanc 26
Montgomery Securities and Financial Institution
Partners, L.P.
Exhibit E - Partnership Agreement between NationsBanc 30
Montgomery Securities and Financial Institution
Partners, L.P.
Exhibit F- Customer Agreement between NationsBanc 32
Montgomery Securities and Financial Institution
Partners II, L.P.
Exhibit G- Prime Broker Agreement between NationsBanc 36
Montgomery Securities and Financial Institution
Partners II, L.P.
Exhibit H- Partnership Agreement between NationsBanc 39
Montgomery Securities and Financial Institution
Partners II, L.P.
Exhibit I- Account Agreement between Banc of America 41
Securities and Financial Institution
Partners III, L.P.
Exhibit J- Prime Broker Agreement between Banc of America 45
Securities and Financial Institution
Partners III, L.P.
Exhibit K- Partnership Agreement between Banc of America 49
Securities and Financial Institution
Partners III, L.P.
Exhibit L- Customer Agreement between NationsBanc 55
Montgomery Securities and Steven D. Hovde
Exhibit M- Prime Broker Agreement between NationsBanc 59
Montgomery Securities and Steven D. Hovde
</TABLE>
- ------------------------------------------
(9) Portions of Exhibit B 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 19 of 61
<PAGE> 20
EXHIBIT A
Consent Agreement Pursuant to 17 C.F.R. 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
FINANCIAL INSTITUTION PARTNERS III, L.P., by its
General Partner, HOVDE CAPITAL, LTD.
By: /s/ Eric D. Hovde
-------------------------------------------------
Eric D. Hovde
Its: Managing Member
HOVDE CAPITAL, LTD.
By: /s/ Eric D. Hovde
-------------------------------------------------
Eric D. Hovde
Its: Managing Member
Dated: 5/25/00
----------
Page 20 of 61
<PAGE> 21
BRACKETS USED TO DENOTE LOCATION OF PORTIONS
OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
EXHIBIT B
[OMITTED]
Page 21 of 61
<PAGE> 22
EXHIBIT C
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.
Page 22 of 61
<PAGE> 23
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.
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.
Page 23 of 61
<PAGE> 24
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.
- - THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF A
RBITRATORS 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.
Page 24 of 61
<PAGE> 25
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.
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.
Financial Institution Partners, L.P.
- ---------------------------------------------------
(Typed or Printed Name)
By: Hovde Capital, Inc., general partner
By: Richard J. Perry, Jr., Secretary
- ---------------------------------------------------
(Signature)
/s/ Richard J. Perry, Jr.
- ---------------------------------------------------
(Signature)
1824 Jefferson Place, N.W.
- ---------------------------------------------------
(Mailing Address)
Washington DC 20036
- ---------------------------------------------------
(City) (State) (Zip)
2/4/98
- ---------------------------------------------------
(Date)
Acct.
No:____________________________________________
Page 25 of 61
<PAGE> 26
EXHIBIT D
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 26 of 61
<PAGE> 27
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 27 of 61
<PAGE> 28
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 qua
rterly 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 wr
itten 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 28 of 61
<PAGE> 29
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.
<TABLE>
<S> <C>
Financial Institution Partners, L.P.
- -----------------------------------------
CUSTOMER OR INVESTMENT ADVISOR ACCEPTED AND AGREED TO:
NATIONSBANC MONTGOMERY
By: HOVDE CAPITAL, INC., general partner SECURITIES LLC AS PRIME BROKER
By: /s/ Richard J. Perry, Jr. By: /s/ Glen Dailey
- ----------------------------------------- -------------------------
Richard J. Perry, Jr., Secretary Senior Managing Director
- ----------------------------------------- ----------------------------
Print Name and Title Print Name and Title
Date: 2/4/98 Date: 2/5/98
------ -------
</TABLE>
Page 29 of 61
<PAGE> 30
EXHIBIT E
NationsBanc Montgomery Securities LLC
________________________________
ACCOUNT NUMBER
________________________________
ACCOUNT NAME
PARTNERSHIP AGREEMENT
Ladies and Gentlemen:
In consideration of your opening and carrying a partnership account in the
name of Financial Institution Partners, L.P. a duly organized partnership
(the "Partnership") 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 Steven D. Hovde
- -------------------------------- --------------------------------
Richard J. Perry, Jr. Braddock J. LaGrua
- -------------------------------- --------------------------------
are hereby appointed the authorized agents and attorneys-in-fact of the
Partnership (the "Authorized Agents"), and shall have authority on behalf
of the Partnership, 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
Partnership 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 Partnership account all demands, notices, confirmations, reports,
statements of accounts, and communications of every kind; to deliver to
them on behalf of the Partnership 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 Partnership 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
Partnership 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 Partnership 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 general and/or limited partners of
said Partnership are as follows: *
Name N/A Occupation
-------------------------
- ------------------------
Name Occupation
-------------------------
- ------------------------
Name Occupation
-------------------------
- ------------------------
*or attach signature page(s) of partnership
Page 30 of 61
<PAGE> 31
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 Partnership, 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 Partnership 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 Partnership is to be carried.
Very truly yours,
HOVDE CAPITAL, INC.
Dated: 2/4/98 By: /s/ Richard J. Perry, Jr.
General Partner(s)
_______________________________
_______________________________
Page 31 of 61
<PAGE> 32
EXHIBIT F
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.
Page 32 of 61
<PAGE> 33
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.
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.
Page 33 of 61
<PAGE> 34
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.
- - THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF A
RBITRATORS 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.
Page 34 of 61
<PAGE> 35
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.
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.
Financial Institution Partners II, L.P.
- ---------------------------------------------------
(Typed or Printed Name)
By: Hovde Capital, L.L.C., general partner
By: Richard J. Perry, Jr., Secretary
- ---------------------------------------------------
(Signature)
/s/ Richard J. Perry, Jr.
- ---------------------------------------------------
(Signature)
1824 Jefferson Place, N.W.
- ---------------------------------------------------
(Mailing Address)
Washington DC 20036
- ---------------------------------------------------
(City) (State) (Zip)
2/4/98
- ---------------------------------------------------
(Date)
Acct.
No:____________________________________________
Page 35 of 61
<PAGE> 36
EXHIBIT G
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 36 of 61
<PAGE> 37
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 37 of 61
<PAGE> 38
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 qua
rterly 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 wr
itten 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 38 of 61
<PAGE> 39
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.
<TABLE>
<S> <C>
Financial Institution Partners II, L.P.
- -----------------------------------------
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: /s/ Glen Dailey
- ----------------------------------------- -------------------------
Richard J. Perry, Jr., Secretary Senior Managing Director
- ----------------------------------------- ----------------------------
Print Name and Title Print Name and Title
Date: 2/4/98 Date: 2/5/98
------ -------
</TABLE>
Page 39 of 61
<PAGE> 40
EXHIBIT H
NationsBanc Montgomery Securities LLC
________________________________
ACCOUNT NUMBER
________________________________
ACCOUNT NAME
PARTNERSHIP AGREEMENT
Ladies and Gentlemen:
In consideration of your opening and carrying a partnership account in the
name of Financial Institution Partners II, L.P. a duly organized
partnership (the "Partnership") 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 Steven D. Hovde
- -------------------------------- --------------------------------
Richard J. Perry, Jr.
- -------------------------------- --------------------------------
are hereby appointed the authorized agents and attorneys-in-fact of the
Partnership (the "Authorized Agents"), and shall have authority on behalf
of the Partnership, 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
Partnership 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 Partnership account all demands, notices, confirmations, reports,
statements of accounts, and communications of every kind; to deliver to
them on behalf of the Partnership 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 Partnership 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
Partnership 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 Partnership 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 general and/or limited partners of
said Partnership are as follows: *
Name N/A Occupation
-------------------------
- ------------------------
Name Occupation
-------------------------
- ------------------------
Name Occupation
-------------------------
- ------------------------
*or attach signature page(s) of partnership
Page 40 of 61
<PAGE> 41
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 Partnership, 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 Partnership 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 Partnership is to be carried.
Very truly yours,
HOVDE CAPITAL, L.L.C.
Dated: 2/4/98 By: /s/ Richard J. Perry, Jr.
General Partner(s)
_______________________________
_______________________________
Page 41 of 61
<PAGE> 42
EXHIBIT I
ACCOUNT AGREEMENT
This agreement sets forth the terms and conditions pursuant to which Banc
of America Securities LLC (BAS) will maintain my Account for purchases and
sales of Securities and Other Property (as defined below). I understand
that, if my Account is a cash account, the provisions of paragraphs 24 & 25
are not binding upon me unless I enter into a margin transaction, and if my
Account is a commodities account, the provisions of paragraph 16 shall not
be applicable.
I agree to notify BAS promptly in writing of any change in information
that I supplied when opening my Account including, but not limited to,
change of address, change in investment objectives, and change in financial
circumstances. Among other things, I represent that, except as disclosed
to BAS in writing, neither I nor any member of my immediate family is (1) a
director, 10% beneficial owner, policy making officer or otherwise an
"affiliate" (as defined in Rule 144 under the Securities Act of 1933, as
amended) of a publicly-traded company or (2) affiliated with or employed by
a securities exchange or corporation of which an exchange controls the
majority of the capital stock, or a securities broker or dealer, or any
bank, thrift institution, trust company, insurance company, investment
fund, including a registered investment company, or any corporation, firm
or individual engaged in the business of dealing as broker or principal in
securities, bills of exchange, acceptances or other forms of commercial
paper. If I or a member of my immediate family become so employed, I shall
notify BAS promptly in writing. I represent that I am of the age of
majority according to the laws of my state of residence. I represent that
no one other than me (and to the extent community property stands in my
Account, my spouse) and any other persons signing this Agreement has an
interest in my Account.
1. TRANSACTIONS WITH AND BY AFFILIATES. Certain securities and other
assets including, but not limited to, municipal, government and money
market securities purchased or sold by me through BAS, may be purchased
from or sold to an affiliate of BAS which may act as underwriter,
broker, dealer or placement agent for such securities and assets. BAS'
bank or thrift affiliates may be lenders to issuers of securities that
BAS underwrites, in which case the proceeds of offerings underwritten by
BAS may be used for repayment of such loans. Please refer to the
disclosure documents relating to the securities for additional
information.
2. SIPC COVERAGE. BAS is a member of the Securities Investor Protection
Corporation (SIPC) through which the customer accounts are protected in
the event of the firm's insolvency up to $500,000, including a maximum
of $100,000 for free cash balances. BAS has contracted with an outside
insurance carrier to provide up to $99.5 million of additional customer
protection in the event of BAS's insolvency or liquidation. Neither
SIPC nor the additional coverage is the same as or a substitute for FDIC
deposit insurance, and they do not protect against declines in the
market value of your securities or other holdings.
3. AUTHORIZATION TO OPEN CASH ACCOUNT. I request that BAS open a Cash
Account for me. I appoint BAS as my agent for the purposes of buying
and selling securities in my Cash Account. I authorize BAS to open or
close my Account, to place and withdraw orders and to take such other
actions to protect itself in the event I breach any of my obligations.
I understand that BAS may accept orders from em for execution by BAS or
others. I acknowledge that BAS reserves the right in its sole
discretion to refuse or restrict my orders. If at any time BAS
considers it necessary for its protection, it may in its discretion
require me to deposit cash or collateral in my Account to assure due
performance by me of my open contractual commitments. I authorize BAS
to act upon my instructions or those of my attorney-in-fact, designated
by me on a form acceptable to BAS, given by telephone or telegraph,
orally, or by facsimile transmission or by any electronic service that
provides access to BAS and agree that BAS may act upon and shall incur
no liability in acting upon any such instructions as reasonably
understood by BAS, provided such instructions reasonably appear genuine
to BAS. I agree that this Agreement covers any and all transactions
heretofore executed for my Account by BAS.
Page 42 of 61
<PAGE> 43
4. ORDERS, DELIVERIES AND SETTLEMENTS. I will not buy any security t
hrough my Cash Account unless there are, or by Settlement Date there
will be, sufficient funds in my Account to make full cash payment, and I
do not contemplate selling such security before making such payment.
Deposits will be credited to my Account subject to collection. In
giving orders to sell, I agree that all "short" sale orders will be
designated as "short" and all "long" sale orders will be designated as
"long." I will not sell any security designated as "long" through my
Cash Account unless I then own the security and it is either on deposit
with BAS or by one (1) day before the Settlement Date can and will be
delivered (including any securities received as a result of dividends,
splits or similar events) to BAS in good deliverable form, and the
placing of such a "long" order shall constitute a representation by me
that I will deliver such security to BAS at least one (1) day before the
Settlement Date. Unless I specifically instruct otherwise, BAS will
treat all orders as market orders to be executed under current market
conditions. I understand that when securities can be traded in more
than one marketplace, in the absence of my specific instructions, BAS
may use its discretion in selecting the markets in which to enter the
order. I will not ask BAS to sell control or restricted securities, as
defined by the federal securities laws, unless I have disclosed to BAS
in writing that such securities are control or restricted securities and
unless I am authorized to engage in such a sale under applicable law.
In connection with a sale of control or restricted securities, I agree
to provide BAS with such notices, information, legal opinions,
certifications or other assurances as BAS may request. I understand
that BAS may in its sole discretion decline to execute any securities
transaction for my Account. If I fail to timely deliver securities sold
in good deliverable form or to deposit timely the total purchase price
of securities purchased as provided by applicable law BAS may, in its
sole discretion and WITH OR WITHOUT NOTICE OR DEMAN, take such steps as
BAS deems appropriate either to complete or to liquidate the
transaction, and I shall pay to BAS, UPON DEMAND, all expenses and
losses incurred by BAS in connection therewith. Furthermore, BAS will
be entitled to retain any gain or profit resulting from its actions
after my failure to timely deliver or pay for securities.
If I elect to settle all transactions through my designated transaction
account ("transaction account") with an affiliated bank (Bank), I agree
that on Settlement Date BAS may debit my transaction account for payment
for securities purchased and credit my transaction account with the
proceeds from the sale of securities. I agree to have sufficient funds
available in my transaction account on Settlement Date for all
securities purchased for my Account. I also agree that on Settlement
Date BAS may withdraw securities from my designated safekeeping account
("safekeeping account") maintained at the Bank to cover the sales of
securities made by me through BAS and deposit fully paid for securities
I purchase through BAS in my safekeeping account. I hereby authorize
the Bank to rely on a copy of this agreement as authority for the Bank
to make such transactions.
BAS reserves the right to go directly to the sponsor of any mutual fund
or Unit Investment Trust for purchases. I understand that in these
instances, the sponsor will confirm directly with me.
BAS reserves the right to not accept limit orders in NASDAQ or over-the-
counter securities in which it acts as a market maker.
5. WRITTEN CONFIRMATION; COMMUNICATIONS. Confirmations of transactions
and statements of my Account shall be conclusive as to me if not
objected to by me in writing within five (5) days (or such other period
as required by law) after the date on which such confirmations of
transactions and statements are received by me from BAS. The absence of
my objections shall constitute an acceptance by me of the terms and
conditions of such transactions. Communications may be sent to me at
the address set forth when I opened my Account or at such other address
as I instruct in writing. All communications so sent, whether by mail,
telegraph, facsimile transmission, overnight courier, messenger or
otherwise, shall be deemed received by me personally, whether actually
received or not, as of the earlier of the date they are received by me
or the business day following the day they are dispatched to me. I
agree to waive all claims resulting from failure to receive such
communications.
6. FEES AND CHARGES. BAS may charge commissions and other fees for
execution of transactions to purchase and sell Securities and Other
Property, and I agree to pay such commissions and fees at BAS' then
prevailing rates. I also understand that such commissions and fee rates
may be changed from time to time without notice to me and I agree to be
bound thereby. I will also pay BAS' fees for any special services that
I request or that are required by law.
Page 43 of 61
<PAGE> 44
7. INFORMATION DISCLOSURE. I hereby authorize BAS to disclose
information to others and receive information from others, including
credit bureaus or other agencies, about me, my Account or my Account
transactions (1) if the purpose is to establish or maintain my Account
or to complete transactions, (2) in response to government agency or
exchange regulations or pursuant to inquiries or court orders or as
otherwise provided by law or valid legal process, and (3) in any suit,
action or other proceeding in which disclosure is necessary or
appropriate in BAS' judgement to protect its interest. Pursuant to Rule
14b-1 under the Securities Exchange Act of 1934, BAS may disclose my
name, address, and securities positions to requesting companies in which
I am a shareholder unless I sent written objection to BAS.
8. DEFINITION OF SECURITIES AND OTHER PROPERTY. Securities and Other
Property shall include, but not be limited to, money, instruments,
commodities, security entitlements and securities of every kind and
nature and all contracts and actions relating thereto and all proceeds
therefrom and all dividends and interest thereon, whether for present or
future delivery, now or hereafter held, carried or maintained by BAS in
or for any of my Accounts, now or hereafter opened, including any
Account(s) in which I may have an interest.
9. SECURITY INTEREST. I grant BAS a continuing security interest in,
lien on, and right to set-off with respect to, all Securities and Other
Property now or hereafter held or carried by BAS in my Accounts,
including any Securities and other Property in transit or held by others
on behalf of BAS, and in any transaction or safekeeping accounts or
money market funds that I have designated for BAS to debit and credit in
connection with my Account, and all proceeds of the foregoing, as
collateral security for the payment and performance of all my
obligations to BAS, now existing or hereafter arising, whether or not
such obligations arise under this Agreement or any other agreement
between us, together with all expenses of BAS in connection therewith.
If I fail to pay or perform any obligation, or if I am in default, BAS
shall have, in addition to the rights provided herein or by other
applicable law, all the rights and remedies provided to a secured party
under the Uniform Commercial Code as then in effect in the State of New
York. In enforcing its security interest, lien or right to set-off,
BAS, in its sole discretion, may determine which Securities and Other
Property are to be bought or sold and the order in which they are to be
sold and which contracts are to be closed.
10. TRANSFER. BAS shall have the right to transfer Securities and Other
Property held by BAS from or to my Account whenever BAS, in its sole and
absolute discretion, considers such a transfer necessary for its
protection.
11. IMPARTIAL LOTTERY SYSTEM. When BAS holds, on my behalf, bonds, options
or preferred stock in street name or bearer form which are callable in
part, I agree to participate in the impartial lottery allocation system
of the called securities in accordance with the rules of the applicable
exchange or depositories.
12. NON-WAIVER; CHANGE OF TERMS. BAS' failure to insist at any time upon
strict compliance with this Agreement or with any of its terms shall not
constitute a waiver by BAS of any of its rights hereunder. Except as
otherwise provided for herein, no provision of this Agreement shall in
any respect be waived or modified. BAS MAY ADD, DELETE OR AMEND THE
TERMS, CONDITIONS AND OTHER PROVISIONS OF THIS AGREEMENT FROM TIME TO
TIME BY WRITTEN NOTICE TO ME. To the extent this Agreement is
inconsistent with any other agreement governing my Account or any
confirmation of a transaction, this Agreement shall govern.
13. GOVERNING LAW. 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) EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN.
14. SEVERABILITY. If any provision or condition of this Agreement shall be
held to be invalid or unenforceable by any court, regulatory or self-
regulatory agency or body or arbitration tribunal, such invalidity or
unenforceability shall attach only to that provision or condition. The
validity of the remaining provisions and conditions shall not be
affected thereby, and this Agreement shall be carried out as if any such
invalid or unenforceable provision or condition were not contained
herein.
Page 44 of 61
<PAGE> 45
15. LIMITATION ON LIABILITY. I acknowledge and agree that BAS shall not be
liable for any liability, loss or damage caused directly or indirectly
by events beyond the reasonable control of BAS, including, but not
limited to government restrictions, lockout, natural disaster (including
earthquake), riot or other civil disturbance, exchange or market ruling,
suspensions of trading, war, strike, interruption or other failure of
transportation, communication, or data processing services, or other
conditions beyond its control. Further, in acting hereunder, I
acknowledge and agree that BAS shall not be liable for any loss or other
claim of injury with respect to my Account except for its gross
negligence or willful misconduct.
16. ARBITRATION. All disputes hereunder will be submitted to arbitration.
I am aware that:
- - 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 arbitrator's award is not required to include factual
findings or legal reasoning and any party's right to appeal or to seek
modification of rulings by the arbitrators is strictly limited.
- - The panel of arbitrators will typically include a minority of a
rbitrators who were or are affiliated with the securities industry.
ARBITRATION AGREEMENT
Any dispute with respect to my Account shall be subject to and governed
by the following ARBITRATION AGREEMENT:
To the extent permitted by law, any controversy arising out of or
relating to my Account, my relationship with BAS or this Agreement or
the breach thereof shall be submitted to arbitration conducted under the
Constitution and Rules of the Board of Governors of the New York Stock
Exchange, Inc. or the Code of Arbitration Procedure of the National
Association of Securities Dealers ("NASD"). An arbitration must be
commenced by service upon the other party or parties of a written demand
for arbitration or a written notice of intention to arbitrate, including
selection of the arbitration tribunal. If I initiate the demand for
arbitration and do not make such election by registered mail addressed
to BAS at its main office within five (5) days thereafter, then BAS may
make such election on my behalf. If BAS initiates arbitration, it may
select the arbitration tribunal. Judgment upon any award rendered by
the arbitrator(s) shall be final, and may be entered in any court having
jurisdiction. This ARBITRATION AGREEMENT does not constitute a waiver
of my right to a judicial forum in instances in which such a waiver
should be void under the applicable federal or state laws, including the
Federal Arbitration Act. The Federal Arbitration Act will apply to any
dispute subject to arbitration under this ARBITRATION AGREEMENT,
notwithstanding any contrary choice of law provision in this Agreement.
I specifically acknowledge and agree that in addition to and without
waiver of this binding ARBITRATION AGREEMENT, BAS shall be entitled to
provisional remedies, including the remedies of prejudgment writs of
attachment, or injunction, available in any court having jurisdiction.
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 co
nstitute a waiver of any rights under this Account Agreement except to
the extent stated herein.
Page 45 of 61
<PAGE> 46
17. JOINT ACCOUNTS. In consideration of BAS opening or maintaining an
Account in the names of two or more persons as listed on the Account
("Joint Account Holders"), the Joint Account Holders jointly and
severally agree that their obligations on the Account and under the
Agreement shall be joint and several and that each of them shall have
authority on behalf of the JOINT ACCOUNT to buy, sell and otherwise deal
in stocks, bonds, and other investments; to receive on behalf of the
JOINT ACCOUNT demands, notices, confirmations, reports, statements of
Account and communications of every kind; to receive on behalf of the
JOINT ACCOUNT, Securities and Other Property; to make agreements on
behalf of the JOINT ACCOUNT 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 BAS on behalf of the JOINT ACCOUNT as fully
and completely as if each of them alone were interested in said JOINT
ACCOUNT, all without notice to the other Joint Account Holders.
BAS is authorized to follow the instructions of any of the Joint Account
Holders in every respect concerning the JOINT ACCOUNT and to make
deliveries to any of the Joint Account Holders or upon his/her
instructions, of any or all Securities and Other Property in the JOINT
ACCOUNT, and to make payments to any of the Joint Account Holders, or
upon his/her order, of any or all monies at any time or from time to
time in the JOINT ACCOUNT as he/she may order and direct, even if such
deliveries and or payments shall be made to him/her personally, and not
for the JOINT ACCOUNT. In the event of any such deliveries of
Securities or Other Property or payments of monies to any of the Joint
Account Holders as aforesaid, BAS shall be under no duty or obligation
to inquire into the purpose or propriety of any such demand for delivery
of securities and other properties or payment of monies, and BAS shall
not be bound to see to the application or disposition of any securities
and/or monies so delivered or paid to any of the Joint Account Holders
or upon his/her order. The authority hereby conferred shall remain in
force until written notice of the revocation addressed to BAS is
delivered at its main office. In the event that BAS receives
inconsistent instructions from the Joint Account Holders or a court
order, BAS may suspend or close the JOINT ACCOUNT by giving written
notice to the Joint Account Holders.
Unless otherwise indicated in a written notice received by BAS, it is
the express intention of the Joint Account Holders that ownership of the
JOINT ACCOUNT be vested in them as joint tenants with rights of
survivorship and not as tenants in common or as tenants by the entirety.
In the event of the death of either or any of the Joint Account Holders,
the entire interest in the JOINT ACCOUNT shall be vested in the survivor
or survivors on the same terms and conditions as theretofore held,
without in any manner releasing the Joint Account Holders or their
estates from the liability provided for in this Agreement. (NOTE: If
the parties do not wish to be joint tenants with rights of survivorship,
they must obtain from BAS the applicable agreement and execute and
deliver that agreement to BAS.)
18. APPLICABLE REGULATIONS. All transactions are subject to the
constitution, laws, rules, customs, usages and interpretations of the
exchange or market and the clearing house, if any, where executed and to
applicable Federal and State laws, and the rules of any government
agency or financial industry self-regulatory organization having
authority with respect thereto.
19. BINDING EFFECT, ASSIGNMENT. This Agreement and its terms shall be
binding upon my heirs, executors, successors, administrators, assigns,
committee and conservator ("successors"). In the event of my death,
incompetence, or disability, whether or not any successors of my estate
and property shall have qualified or been appointed, until BAS has
written notice of my death or incompetence BAS may continue to operate
as though I were alive and competent and BAS may liquidate my Account
WITHOUT PRIOR WRITTEN NOTICE TO OR DEMAND upon my successors. This
Agreement shall inure to the benefit of BAS' successors and assigns,
whether by merger, consolidation or otherwise (and BAS may transfer my
Account and this agreement to any such successors and assigns) WITHOUT
NOTICE. You may not assign your rights or delegate your duties under
this Agreement without BAS' consent. With prior notice to you, BAS may
assign or transfer any or all of its rights and obligations under this
Agreement and your Account(s) to any other direct or indirect wholly
owned subsidiary of Bank of America Corporation that is registered as a
broker-dealer under the Securities Exchange Act of 1934.
20. ALL ACCOUNTS. THIS AGREEMENT SHALL COVER MY RELATIONSHIP WITH BAS,
INCLUDING INDIVIDUALLY AND COLLECTIVELY ALL ACCOUNTS THAT I MAY OPEN OR
REOPEN WITH BAS. CERTAIN ACCOUNTS, SUCH AS MARGIN ACCOUNTS OR OPTIONS
ACCOUNTS, ARE SUBJECT TO SEPARATE DOCUMENTATION CONTAINING ADDITIONAL
REQUIREMENTS.
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<PAGE> 47
CASH/MARGIN
21. TERM. This Agreement shall become effective on its acceptance by BAS.
I may close my Account by giving written notice to BAS. BAS may close
my Account by giving me written notice. When my Account is closed, BAS
will return to me, or follow my instructions for the transfer of, any
Securities and Other Property remaining in my Account and will no longer
accept orders for transactions after the date of closing subject to my
having satisfied all obligations and paid all indebtedness owing to BAS.
22. PAYMENT FOR ORDER FLOW POLICY. BAS' policy is that it will not accept
remuneration for directing orders to particular brokers/dealers or
market centers for execution. Notwithstanding this policy, should BAS
receive such remuneration on any transaction, appropriate disclosure
will be made.
23. RECORDING OF TELEPHONE CONVERSATIONS. ANY OF MY TELEPHONE
CONVERSATIONS WITH BAS MAY BE RECORDED TO ASSURE ACCURACY. I CONSENT TO
SUCH RECORDING. TRANSFER.
24. MARGIN IN MARGIN ACCOUNTS (NOT APPLICABLE TO CASH ACCOUNTS). I hereby
agree to maintain such margin in my margin and/or good faith account as
BAS may in its discretion require and I agree to pay forthwith on demand
any debit balance owing with respect to any such Account, and if not
paid this shall be a breach of this Agreement and BAS may take such
action as it considers necessary for its protection in accordance with
this Agreement. I understand that even if BAS has a policy of giving
customers notice of a margin deficiency, BAS is not obligated to request
additional margin from me, and there may be circumstances where BAS will
liquidate securities and/or other property in my Account without notice
to me. I understand I will be charged interest on my debit balance
which if not paid at the close of interest period will be added to the
opening balance for the next interest period. Consult the attached
Truth-In-Lending disclosure statement for an outline of BAS' interest
policies.
25. CONSENT TO LOAN OR PLEDGE SECURITIES AND OTHER PROPERTY (NOT APPLICABLE
TO CASH ACCOUNTS). I hereby authorize BAS to lend either to itself or
to others any Securities and Other Property held by BAS in my margin
and/or good faith Account and to carry all such property in its general
loans and such property may be pledged, repledged, hypothecated or
rehypothecated, without notice to me, either separately or in common
with other such property for any amounts due to BAS thereon or for a
greater sum, and BAS shall have no obligation to retain a like amount of
similar property in its possession and control. BY SIGNING THIS
AGREEMENT I ACKNOWLEDGE THAT THE SECURITIES AND OTHER PROPERTY IN MY
MARGIN ACCOUNT MAY BE LOANED TO BAS OR LOANED OUT TO OTHERS AND THAT I
HAVE RECEIVED AND/OR REVIEWED A COPY OF THIS AGREEMENT.
26. RECEIPT OF TRUTH-IN-LENDING. I hereby acknowledge receipt and review
of the attached Truth-In-Lending disclosure statement. I 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 that may be provided to me. It is understood and agreed that
the interest charge made to my 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 bearing
like interest.
27. CLEARANCE ACCOUNTS. If BAS carries my Account as clearing broker by
arrangement with another broker through whose courtesy my Account has
been introduced, then unless BAS receives from me a written notice to
the contrary, BAS shall accept from such other broker, without any
inquiry or investigation by BAS, (i) orders for purchase and sale of
Securities and Other Property on margin or otherwise, and (ii) any other
instructions concerning said Account. I understand BAS shall have no
responsibility or liability to me for any acts or omissions of such
other broker, its officers, employees or agents.
28. NOTICES and REDEMPTIONS. Notice or other communications, including
margin calls, delivered or mailed to the address given when opening my
Account, until BAS has received notice in writing of a different
address, shall be deemed to have been personally delivered to me.
I understand that equity securities, fixed income securities, mutual fund
shares and other securities:
- - Are NOT insured by the FDIC or any other government entity;
- - Are NOT deposits or other obligations of, or guaranteed by Bank of
America Corporation or any of its affiliates (unless explicitly stated
otherwise);
- - Are subject to investment risks, including possible loss of the
principal amount invested.
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<PAGE> 48
I certify that I have read, understand and agree specifically to the terms
set forth in this Agreement including, but not limited to, the Arbitration
Agreement which can be found on page 3 item 16.
Financial Institution Partners III, L.P.
By: Richard J. Perry, Jr.
- ---------------------------------------------------------------------------
- ----
Typed or Printed Name of Investor Typed or Printed Name of Joint
Investor
/s/ Richard J. Perry, Jr. 11/5/99
- ---------------------------------------------------------------------------
- ----
Signature of Investor Date Signature of Joint Investor Date
Page 48 of 61
<PAGE> 49
EXHIBIT J
Banc of America 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"), Banc of America Securities
LLC ("BAS"), 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 BAS 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 BAS
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 BAS 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 BAS that it desires to do so and
confirm with BAS that a prime brokerage agreement has been executed-
between BAS and such Executing Broker. Upon execution of a prime
brokerage agreement between BAS 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 BAS 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 49 of 61
<PAGE> 50
5. On the next business day following trade date, BAS 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 BAS 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 BAS by Customer or Investment
Advisor. In addition, the notification will disclose any transaction-
based charges imposed by BAS and any commission charged by Executing
Broker.
6. BAS will settle transactions on Customer's behalf, unless, during the
time permitted for disaffirmations under the agreement then in effect
between BAS and Executing Broker, BAS disaffirms all unsettled
transactions of Customer that BAS determines to disaffirm in good faith
and in accordance with reasonable commercial standards. BAS will
promptly send to Customer or Investment Advisor, as applicable, a
notice of cancellation of all disaffirmed transactions to offset any
notifications sent previously. BAS 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, BAS, 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 BAS 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, BAS, 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 BAS 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 BAS
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, BAS shall
notify each Executing Broker, by the same day's close of business, that
BAS is no longer acting as Prime Broker for Customer. As of the day
following such notice, BAS may not accept any prime brokerage
transactions commenced on behalf of Customer.
Page 50 of 61
<PAGE> 51
9. So long as this Agreement is in effect, BAS will be responsible to
ensure that all transactions which it has affirmed and not subsequently
disaffirmed, and is obligated to clear, are cleared between BAS and
Customer, and accordingly, appear on BAS'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 BAS. Confirmations received by BAS 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.BAS 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 BAS.
12. BAS will issue to Customer a statement of account at least on a qua
rterly 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 BAS upon prior wr
itten 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 BAS 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 BAS 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 51 of 61
<PAGE> 52
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 BAS 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.
<TABLE>
<S> <C>
Financial Institution Partners III, L.P.
- -----------------------------------------
CUSTOMER OR INVESTMENT ADVISOR ACCEPTED AND AGREED TO:
BANC OF AMERICA SECURITIES LLC
By: HOVDE CAPITAL, LTD., general partner AS PRIME BROKER
By: /s/ Richard J. Perry, Jr. By:
- ----------------------------------------- -------------------------
Richard J. Perry, Jr., Secretary
- ----------------------------------------- ----------------------------
Print Name and Title Print Name and Title
Date: 11/5/99 Date:
------ -------
</TABLE>
Page 52 of 61
<PAGE> 53
EXHIBIT K
Banc Of America Securities LLC
________________________________
ACCOUNT NUMBER
________________________________
ACCOUNT NAME
PARTNERSHIP AGREEMENT
Ladies and Gentlemen:
In consideration of your opening and carrying a partnership account in the
name of Financial Institution Partners III, L.P. a duly organized
partnership (the "Partnership") 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 Steven D. Hovde
- -------------------------------- --------------------------------
Richard J. Perry, Jr.
- -------------------------------- --------------------------------
are hereby appointed the authorized agents and attorneys-in-fact of the
Partnership (the "Authorized Agents"), and shall have authority on behalf
of the Partnership, 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
Partnership 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 Partnership account all demands, notices, confirmations, reports,
statements of accounts, and communications of every kind; to deliver to
them on behalf of the Partnership 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 Partnership 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
Partnership 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 Partnership 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 general and/or limited partners of
said Partnership are as follows: *
Name N/A Occupation
-------------------------
- ------------------------
Name Occupation
-------------------------
- ------------------------
Name Occupation
-------------------------
- ------------------------
*or attach signature page(s) of partnership
Page 53 of 61
<PAGE> 54
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 Partnership, 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 Partnership 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 Partnership is to be carried.
Very truly yours,
HOVDE CAPITAL, LTD.
Dated: 11/5/99 By: /s/ Richard J. Perry, Jr.
-------------- ----------------------------
General Partner(s)
________________________________
________________________________
Page 54 of 61
<PAGE> 55
Exhibit L
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 55 of 61
<PAGE> 56
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.
Page 56 of 61
<PAGE> 57
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.
THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF A
RBITRATORS 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 57 of 61
<PAGE> 58
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.
Steven D. Hovde and Linda R.
Hovde
(Typed or Printed Name)
/s/ Steven D. Hovde
(Signature)
/s/ Linda R. Hovde
(Signature)
968 Williamsburg Park
(Mailing Address)
Barrington IL
60010
(City)
(State) (Zip)
2/7/98
(Date)
Acct.
No:________________________________
____________
Page 58 of 61
<PAGE> 59
EXHIBIT M
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.
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.
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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.
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 qua
rterly 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 wr
itten 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.
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(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.
/s/ Steven D. Hovde .
Customer or Investment Advisor Accepted and Agreed to:
NATIONSBANC MONTGOMERY
SECURITIES LLC as Prime Broker
By: By: /s/ Glenn Dailey
Senior Managing Director
Print Name and Title Print Name and Title
Date: 2/7/98 Date: 2/13/98
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