EXHIBIT (b)(1)
SECURITIES ACCOUNT MARGIN AGREEMENT
CONSENT TO LOAN OF SECURITIES:
In consideration of the acceptance by X.X. Xxxxxxxx & Co. ("Bradford") of
the account(s) in which the undersigned applicants(s) (all such signatories
hereto, whether acting in their individual or representative capacities, are
referred to in this Agreement as "you") have an interest, alone or with
others, which you have opened or open in the future, with Bradford for the
purchase and sale of securities, or commodities you agree as follows:
1. RULES AND REGULATIONS: All transactions for your account shall be subject
to the then applicable constitution, rules, regulations, customs and usages
of the exchange or market and its clearing house, if any, where executed by
Bradford or its agents; and, where applicable, the Securities Exchange Act
of 1934, as amended; the Commodity Exchange Act, as amended; the rules and
regulations of the Securities and Exchange Commission, the Board of
Governors of the Federal Reserve System and the Commodity Futures Trading
Commission.
2. WAIVER: You agree that no provision of this Agreement shall be waived,
altered, modified or amended unless committed to in writing and signed by a
partner of Bradford. No waiver of any provision of this Agreement shall be
deemed a waiver of any other provision, nor a continuing waiver of the
provision(s) so waived.
3. SEVERABILITY: If any provision of this Agreement is held to be invalid,
void or unenforceable by reason of any law, rule, administrative order or
judicial decision, that determination shall not affect the validity of the
remaining provisions of this Agreement.
4. SECURITY INTEREST: All monies, securities, commodities or contracts
relating thereto and all other property in any account in which you have an
interest (held either individually, jointly or otherwise) or which may at
any time be in Bradford's possession for any purpose, including
safekeeping, shall be subject to a general lien for the discharge of all
obligations you may have to Bradford, however and whenever arising. All
securities and other property shall be held by Bradford as security for the
payment of all such obligations or indebtedness in any account in which you
may have an interest.
5. LOAN OR PLEDGE OF SECURITIES: All monies, securities and commodities or
contracts relating thereto and all other property which Xxxxxxxx xxx at any
time be carrying for you or in which you may have an interest, may from
time to time and without notice be carried in Bradford's general loans and
may be pledged, repledged, hypothecated or rehypothecated, separately or in
common with other securities or any other property for the sum due Bradford
thereon or for a greater sum without retaining in Bradford's possession and
control for delivery a like amount of similar securities or commodities.
Subject to applicable law, Bradford, without notice to you, may apply
and/or transfer any or all monies, securities, commodities or contracts
relating thereto and all other property interchangeably between accounts or
to accounts in which you have an interest or which are guaranteed by you
(except regulated commodity accounts). Bradford is hereby specifically
authorized to transfer to your cash account on settlement day any excess
funds available in any of your other accounts, including but not limited to
any free balances in any margin account, sufficient to make full payment of
cash purchases. You agree that any debit occurring in any of your accounts
may be transferred at Bradford's option to your margin account. You hereby
authorize Bradford, from time to time, to lend, separately or together with
property of others, to itself or others, any property it may be carrying
for you on margin. This authorization shall apply to all accounts for you.
6. INTEREST CHARGES: Debit balances in your accounts shall be charged
interest or service charges in accordance with Bradford's policies and at
prevailing rates determined by Bradford.
7. LIQUIDATION: You understand that, notwithstanding a general policy of
giving customers notice of a margin deficiency, Bradford is not obligated
to request additional margin from you in the event your account falls below
minimum maintenance requirements. More importantly, there may be
circumstances where Bradford will liquidate securities and/or other
property in the account without notice to you to ensure
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that minimum maintenance requirements are satisfied. Bradford shall have the
right in accordance with its general policies regarding margin maintenance
requirements to require additional collateral or the liquidation of any
securities and other property whenever in its discretion it considers it
necessary for its protection, including in the event of, but not limited to:
Your failure to promptly meet any call for additional collateral; the filing
of a petition in bankruptcy by or against you; the appointment of a receiver
is filed by or against you; an attachment is levied against any account in
which you have an interest or; your death. In such event, Bradford is
authorized to sell any and all securities and other property in any account
of yours, whether carried individually or jointly with others, to buy all
securities or other property which may be short in such Account(s), to
cancel any open orders and to close any or all outstanding contracts, all
without demand for margin or additional margin, other notice of sale or
purchase, or other notice of advertisement each of which is expressly waived
by you. Any such sales or purchases may be made at Bradford's discretion on
any exchange or other market where such business is usually transacted or at
public auction or private sale, and Xxxxxxxx xxx be the purchaser for its
own account. It is understood a prior demand, or call, or prior notice of
the time and place of such sale or purchase shall not be considered a waiver
of Bradford's right to sell or buy without demand or notice as herein
provided.
8. MARGIN: You will at all times maintain positions and margins in your
accounts as Bradford, in its discretion, may from time to time require and
will pay on demand any debit balance owing with respect to such accounts.
9. GOVERNING LAW: This agreement shall be governed by the laws of the State of
New York, and shall inure to Bradford's successors and assigns, and shall be
binding on you, your heirs, executors, administrators and assigns.
10. ARBITRATION DISCLOSURES:
. 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 ARBITRATORS
WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY.
11. ARBITRATION: I AGREE, AND BY CARRYING AN ACCOUNT FOR ME, BRADFORD AGREES,
THAT ALL CONTROVERSIES WHICH MAY ARISE BETWEEN US CONCERNING ANY TRANSACTION
WHETHER 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 GOVERNED BY THE ARBITRATION AND SUBSTANTIVE LAWS OF THE STATE OF
NEW YORK, BEFORE THE NEW YORK STOCK EXCHANGE, INC. OR AN ARBITRATION
FACILITY PROVIDED BY ANY OTHER EXCHANGE OF WHICH BRADFORD IS A MEMBER, OR
THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. AND IN ACCORDANCE WITH
THE ARBITRATION RULES PERTAINING TO THE SELECTED ORGANIZATION. I MAY ELECT
IN THE FIRST INSTANCE WHETHER ARBITRATION SHALL BE BY AN EXCHANGE OR SELF-
REGULATORY ORGANIZATION OF WHICH THE BROKER IS A MEMBER, BUT IF I FAIL TO
MAKE SUCH ELECTION BY REGISTERED LETTER OR TELEGRAM ADDRESSED TO BRADFORD AT
ITS MAIN OFFICE, BEFORE THE EXPIRATION OF FIVE (5) DAYS AFTER RECEIPT OF A
WRITTEN REQUEST FROM BRADFORD TO MAKE SUCH ELECTION, THEN BRADFORD SHALL
MAKE SUCH ELECTION. THE AWARD OF THE ARBITRATORS, OR OF THE MAJORITY OF
THEM, SHALL BE FINAL, AND JUDGMENT UPON THE AWARD RENDERED MAY BE ENTERED IN
ANY COURT, STATE OR FEDERAL, HAVING JURISDICTION.
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12. SALE ORDERS/DELIVERIES: You agree that when placing a sell order, all
"short" sale orders shall be designated as "short" and all "long" sale
orders shall be designated as "long". You represent that any sell order
which you designate as "long" shall be for securities then owned by you and
if such securities are not then deliverable from your account, that you
will deliver them on or before settlement date. In the case of the sale of
any security, commodity or other property by Bradford at your direction,
Bradford's inability to deliver the same to the purchaser by reason of your
failure to supply Bradford therewith, you authorize Bradford to borrow such
security, commodity or other property necessary to make delivery thereof
and you agree to be responsible for any loss which Xxxxxxxx xxx sustain
thereby and any premiums which it may be required to pay thereon and for
any additional loss which it may sustain by reason of its inability to
borrow the security, commodity or other property sold on your behalf.
13. BROKER: You understand that in all transactions between you and Xxxxxxxx,
Xxxxxxxx shall be acting as broker for you except when Bradford discloses
to you that, with respect to such transaction, it is acting as dealers for
its account or as broker for some other person.
14. COMMUNICATIONS: Confirmations of transactions and statements of your
account shall be conclusive if not objected to in writing to Bradford
within 5 days and 10 days respectively after transmitted to you by mail or
otherwise. Communications may be sent to you at the address shown on
Bradford's records for your account or at such other address as you may
hereafter provide to Bradford in writing. All communications sent, whether
by mail, telegraph, messenger or otherwise will be deemed given, whether
actually received or not.
15. REPRESENTATIONS: You represent that you are of legal age, are not an
employee or member of any exchange or a member firm or any corporation of
which any exchange owns a majority interest or the NASD or of a bank, trust
company, insurance company or other employer engaged in the business of a
broker-dealer and that you will promptly notify Bradford if you become so
employed. You further represent that, unless otherwise disclosed to
Bradford in writing, no one except you has an interest in the account or
accounts maintained with Xxxxxxxx in your name.
16. AGREEMENT CONTAINS ENTIRE UNDERSTANDING/ASSIGNMENT: This Agreement
contains the entire understanding between you and Bradford concerning the
subject matter of this Agreement. You may not assign the rights and
obligations hereunder without first obtaining the prior written consent of
Bradford.
BY SIGNING THIS AGREEMENT YOU ACKNOWLEDGE THAT:
1. THE SECURITIES IN YOUR MARGIN ACCOUNT MAY BE LOANED TO BRADFORD OR LOANED
OUT TO OTHERS; AND
2. THAT YOU HAVE RECEIVED A COPY OF THIS AGREEMENT; AND
3. THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE AT PARAGRAPH 11.
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MARGIN INTEREST RATES
We are furnishing the following information in order that you may be
informed of the terms and conditions governing our charges for credit extended
to or maintained for you.
1. CASH ACCOUNTS: Generally, interest is not charged on debit balances in
cash accounts, unless there is also a margin debit balance in your
account, in which case interest is charged on the total debit balance.
However, interest may also be charged on cash account debit balances in
unusual circumstances, such as: a prepayment (payment prior to
settlement date) of the proceeds of a sale, in which case there would be
interest charged for the number of days of early payment; a late payment
(after settlement date) for securities purchased; or a debit balance
arising from a sell-out or buy-in following a customer's failure to pay
for securities purchased or to deliver securities sold.
2. RATE: The annual rate of charge will be determined in accordance with the
following:
AVERAGE DEBIT
BALANCE MAXIMUM CREDIT RATE
------------- -------------------
Less than $25,000 Base Rate + 1.75%
$25,000--$49,999 Base Rate + 1.50%
$50,000--$99,999 Base Rate + 1.00%
$100,000--$499,999 Base Rate + .50%
Over $500,000 Base Rate + .25%
Our Base Rate will generally be Prime Rate as quoted in the Wall Street
Journal. When your interest rate is to be increased for any reason,
other than to adjust to changes in the base rate, at least 30 days
prior written notice will be given.
3. COMPUTATION OF CHARGES: As stated in our margin agreement, our margin
accounts and related finance charges are governed by the laws of the
State of New York. In computing credit charges, balances are calculated
daily for all types of accounts of a customer, except credit balances in
short accounts (Type 5).
In computing credit charges, cash and margin (Type 1 & 2 Daily
Balances) are netted against each other. Each net debit is added to
obtain an aggregate debit for the period. This aggregate is multiplied
times the interest rate and then divided by 360 days to obtain the
interest charges. For those days that have a net credit, this net of
cash and margin accounts is carried over and netted against other
accounts carried for you (other than short accounts). The same method
is then used (adding, multiplying by the rate and dividing by 360).
If you sell short (or short against the box), and the market value of
the security you sold increases above your selling price, the increase
will be charged to your Margin Account (Type 2) with an offsetting
credit to your Short Account (Type 5) and interest will be charged in
the Margin Account on the increase. Conversely, interest is reduced by
any decrease in market value. This is known as "Marking to the Market."
Our interest is calculated and posted on the last business day of the
month with the last day of the period being the previous day. Interest
for December will similarly be calculated and posted on the last
working day of the calendar year. To enable you to confirm the accuracy
of the monthly interest charge as shown on your statement, the
following information will be shown on the statement: the interest
rate, the average balance, the beginning and ending dates of the
interest period, and the ending debit balance.
4. COLLATERAL: Your Customer Agreement with us provides a lien on all
securities which we hold for you to secure the discharge of all your
obligations to us, and gives us the right at any time to require you to
deposit such additional collateral as, in our sole discretion, we
determine is necessary as security for your obligations to us. Without
limiting our aforesaid discretionary authority, we have some general
guidelines which may be changed or discontinued by us at any time. For
instance, if your account
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should fall below 30% equity at any time, a call will be sent to you for
additional cash or collateral to bring your equity up to 30%. We may
also decline to extend credit on certain securities because of price,
market conditions, concentration; etc., which we feel would be both to
your interest and the Firm's to be on a fully paid basis. There may be
times also when the firm is extending credit on particular securities,
but due to market or other conditions may feel it necessary to call on
you for sufficient cash or collateral in the order to make that security
fully paid for.
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