Exhibit 2
Margin Account Agreement
A margin facility allows you to borrow funds from Xxxxx & Xxxxxxxxxxxx, using
acceptable securities for collateral for the loan. A margin account is required
to make short sale transactions or to trade options. The term short sale refers
to the sale of a security that you do not own at the time the order is placed.
When a short sale is transacted, the security is borrowed for delivery to the
purchaser. The borrowed security can be called in at any time by the lender.
Securities eligible for margin trading must be traded on national securities
exchanges or on the National Association of Securities Dealers, Inc. (NASD) and
such securities must have an initial minimum market value of $5 per share. The
loan available under a margin account is based on the current market value of
the account and the types of securities in the account, therefore the amount
available for loan can change day to day. S&S may extend credit to you through
this margin facility according to applicable laws and regulations and the
disclosure of credit terms and policies contained herein.
Trading on margin can be speculative. You should understand the operation of
this facility and its relationship to your brokerage account, and if applicable,
the checkwriting and debit features of the AMA. You should appreciate the
operation of this account in various market conditions and you should carefully
consider your financial position, investment objectives and risk tolerance
before trading on margin or accessing credit through the margin facility.
Initial Margin Requirements
Xxxxx & Xxxxxxxxxxxx will not extend credit unless the equity in your margin
account is at least $2,000, or such greater amount as may be required by
applicable rules or regulations or by Xxxxx & Xxxxxxxxxxxx. The maximum amount
which Xxxxx & Xxxxxxxxxxxx will loan for common stock securities is 50% of the
value of marginable securities purchased in your margin account; different
requirements apply to non-equity securities, such as bonds or options. If the
market value of stock held as collateral increases after you have met the
initial margin requirements, available credit will increase proportionately.
Accordingly, if the market value of the stock held as collateral decreases,
available credit will be proportionately decreased. Initial margin requirements
may change without prior notice. Xxxxx & Xxxxxxxxxxxx reserves the right to
impose more stringent requirements on positions that involve higher levels of
risk. If the market value of a security drops below $2 per share, the security
will not be assigned any value as collateral to secure your margin obligations.
Margin Maintenance Requirements
Under this margin agreement, you must maintain a minimum amount of equity in
your account to collateralize your outstanding loans and other obligations.
Margin maintenance requirements are set by the New York Stock Exchange, the
American Stock Exchange and other regulatory agencies. In addition, margin
maintenance requirements may be increased according to Xxxxx & Stringfellow's
discretion. Margin maintenance requirements cannot be decreased below the
minimum percentage set by the New York Stock Exchange. Xxxxx & Xxxxxxxxxxxx may
issue a "margin call" (a notification to deposit additional collateral) if your
margin account equity falls below the margin maintenance requirement. For
example, account equity may fall due to a decrease in the value of long
securities held as collateral or due to an increase in the value of securities
held short. In general, requests for additional collateral will be made by Xxxxx
& Xxxxxxxxxxxx when the equity in the account falls below 35%. Xxxxx &
Xxxxxxxxxxxx retains the absolute discretion to determine whether, when and what
amounts, it shall require additional collateral. Xxxxx & Xxxxxxxxxxxx may also
consider market conditions, concentration levels, and your financial resources.
You hereby agree to maintain in your margin account collateral of the type and
amount required by (i) applicable exchange rules and federal regulations; (ii)
other agreements between you and S&S; or (iii) as otherwise required by S&S in
its sole discretion.
Margin Deposits
Under Regulation T of the Federal Reserve Board, your deposit for securities
purchased is due on settlement date. Maintenance calls are mailed to account
address and are due within five business days of the issue date.
Calls for Additional Collateral Liquidations and Covering Short Positions
If you engage in margin transactions, you agree that you will maintain such
securities and other property in your Account for margin purposes as S&S shall
require from time to time. S&S shall have the right in accordance with its
general policies regarding margin maintenance requirements, as such may be
modified or amended from time to time, to require additional collateral or the
liquidation of any securities and other property whenever in its sole discretion
S&S considers it necessary for its protection. S&S may do so under circumstances
which include, but are not limited to, the failure to promptly meet any call for
additional collateral, the filing of a petition in bankruptcy, the appointment
of a receiver by or against you or the attachment or levy against any account in
which you have an interest. In such event, S&S is hereby authorized by you to
sell any and all securities and other property in any of your accounts whether
carried individually or jointly with others, to buy all securities or other
property which may be short in such account, to cancel any open orders and to
close any or all outstanding contracts, all without demand for margin or
additional margin, notice of sale or purchase, or other notice or advertisement,
each of which is expressly waived by you. Any such sales or purchases may be
made at Xxxxx & Stringfellow's discretion on any exchange or other market where
such business is usually transacted or at public auction or private sale, and
S&S may be the purchaser for its account. You understand that any prior demand,
or call, or prior notice of the time and place of such sale or purchase shall
not be considered a waiver of Xxxxx & Stringfellow's right to sell or buy
without demand or notice as provided herein.
Loan or Pledge of Securities and Other Property
Within the limitations imposed by applicable law, all securities and other
property now or hereafter held, carried or maintained by S&S in its possession
that have not been fully paid for or are held in a margin account may be lent,
either to S&S or to others, pledged and repledged by
S&S, without notice to you, either separately or in common with other securities
and other property of Xxxxx & Stringfellow's other customers for any amount due
in any account in which you have an interest, or for any greater amount, and S&S
may do so without retaining in its possession or control for delivery a like
amount of similar securities or other property. You understand that in the event
securities held for your account are loaned out, you may lose certain voting
rights attendant to such securities. No compensation will be payable to you in
connection with any borrowings. Any losses or detriments or gains or other
benefits arising from such borrowing will not accrue to your margin account.
Interest Charges
Securities and Exchange Commission Rule 10b-16 requires a broker who extends
credit to a client in connection with any security transaction to furnish the
client certain information describing the terms, conditions, and methods
pursuant to which interest charges are made to a customer's account. The
information contained in the enclosed "Disclosure of Credit Terms" is provided
to you to conform with that rule and the information should be carefully
reviewed and retained for future reference.
You acknowledge that debit balances in your cash or margin account, including
but not limited to those arising from your failure to make payment by settlement
date for securities purchased, will be charged interest at the then current
rate, in accordance with Xxxxx & Stringfellow's usual custom and as more fully
described in this margin agreement. Interest will be computed on the net daily
debit balance, which is computed by combining all debit balances and credit
balances in each account with the exception of credit balances associated with
short security positions. You acknowledge receipt of your monthly client
statement regarding interest charges and that S&S may charge an account
maintenance fee with respect to inactive accounts.
Satisfaction of Indebtedness
You agree to satisfy, upon demand, any indebtedness, including any interest and
commission charges you further agree to pay the reasonable costs and expenses of
collection of any amount you owe S&S, including reasonable attorney's fees and
court costs.
Liens
You hereby grant S&S a security interest in all securities and other property in
Xxxxx & Stringfellow's possession in which you have an interest in order to
secure any and all indebtedness or any other of your obligations to S&S. All
securities and other property shall be held as security for the payment of any
such obligations or indebtedness in any account in which you have an interest,
and S&S may, in its sole discretion, at any time and without prior notice, sell
and/or transfer any or all securities and other property in order to satisfy
such obligations.
Short and Long Orders; Deliveries and Settlements
You agree that, in giving orders to sell, all "short" sales will be designated
by you as "short" and all other sales will be designated by S&S as "long."
"Short sale" means any sale of a security not owned by you or any sale that is
consummated on settlement date by delivery of a borrowed security. You also
agree that S&S may, at its sole discretion, immediately cover any short sales in
your account, without prior notice. Your failure to designate a sale order as
"short" is a representation on your part that you own the security free of
restriction, and if the security is not in Xxxxx & Stringfellow's possession at
the time of the sale, you agree to deliver the security to S&S by settlement
date. In case of non-delivery of a security, S&S is authorized to purchase the
security to cover your position and charge any loss, commissions and fees to
your Account. You agree that if S&S fails to receive payment for securities it
has purchased, S&S may, without prior demand or notice, sell those securities or
other property held by S&S in any of your accounts with S&S and any loss
resulting therefrom will be charged to such accounts. You authorize S&S, in its
sole discretion, to request and obtain extension(s) of your time to make payment
for securities you purchase, as provided for by Federal Reserve Bank Regulation
T.
Authority to Borrow
In case of the sale of any security or other property by S&S at your direction
and Xxxxx & Stringfellow's inability to timely deliver the same to the purchaser
by reason of your failure to supply S&S therewith, you authorize S&S to purchase
or borrow any security or other property necessary to make the required
delivery, and you agree to be responsible for any loss or cost, including
interest, which S&S sustains as a result of your failure to make delivery to
S&S.
Representations
Unless you have advised S&S otherwise in writing, you represent that you are of
legal age, that you are not an employee or member of any securities exchange (or
corporation of which any exchange owns a majority of the capital stock), the
National Association of Securities Dealers, Inc., or of any broker-dealer, nor
are you a senior officer of any bank, savings and loan institution, insurance
company, registered investment company, registered investment advisory firm or
institution that purchases securities, nor are you a member of the immediate
family of such a person. Unless you have advised S&S otherwise in writing, you
represent that you are not a director, 10% shareholder, policy-making executive
or otherwise an affiliate (as defined under Rule 144 under the Securities Act of
1933) of a publicly traded company. You further represent that you are
financially capable of satisfying any obligations undertaken through your
Account. You also represent that no one except the person(s) named on the
Account has any interest in the account. You will promptly notify S&S in writing
if any of the above circumstances change. You acknowledge that the purchase and
sale of securities entails substantial economic risk and you represent to S&S
that you knowingly and willingly assume such risk.
