F U R M A N S E L Z
------LLC----------
000 Xxxx Xxxxxx Xxxxxxxx Agent:
Xxx Xxxx, Xxx Xxxx 00000 Bear, Xxxxxxx Securities Corp.
AGREEMENT FOR
PRIME BROKERAGE CLEARANCE SERVICES
This Agreement sets forth the terms and conditions under which the
above-named clearing agent, its successors and assigns ("Clearing
Agent"), as clearing agent for Xxxxxx Xxxx LLC ("Xxxxxx Xxxx"), will
clear your securities transactions with such broker-dealer as you may
designate, from time to time, as your prime broker ("Prime Broker"),
provided that Clearing Agent has entered into a Prime Brokerage
Agreement with such broker-dealer with respect to your prime brokerage
transactions (hereinafter referred to as "Prime Brokerage Transaction(s)").
1. ESTABLISHMENT OF ACCOUNT
------------------------
Clearing Agent will clear your Prime Brokerage Transactions in a
broker-dealer credit account established in the name of your Prime
Broker and designated for your benefit. On the settlement date for each
Prime Brokerage Transaction, Clearing Agent will deliver or receive your
securities to or from your Prime Broker against payment in full by or to
your Prime Broker on your behalf.
2. CUSTOMER TRADES
---------------
You hereby authorize Clearing Agent to inform your Prime Broker on
the DTC ID System, or any successor system, of all the details for each
Prime Brokerage Transaction you instruct to be cleared by Clearing Agent
for your account, including, but not limited to, the contract amount,
the security involved, the number of shares or number of units, and
whether the transaction was a long or short sale or a purchase
(collectively, the "Trade Data"), and you hereby agree to inform your
Prime Broker of the Trade Data on trade date by the time designated to
you by your Prime Broker. In the event of any discrepancy in the Trade
Data reported to your Prime Broker by you and the Trade Data reported to
your Prime Broker by Clearing Agent, you shall be responsible for
resolving such discrepancy promptly, and you shall be liable to Clearing
Agent for any loss, cost or expense sustained by Clearing Agent arising
out of such Prime Brokerage Transaction.
3. APPLICABLE LAW AND REGULATIONS
------------------------------
All Prime Brokerage Transactions 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 Securities and
Exchange Commission, all relevant securities and commodity exchanges,
the Municipal Securities Rulemaking Board, the National Association of
Securities Dealers, the Board of Governors of the Federal Reserve
System, and the constitution, rules and customs of the exchange or
market (and its clearing house, if any) where executed. In addition,
all Prime Brokerage Transactions shall be performed in a manner not
inconsistent with the SEC No Action Letter dated January 25, 1994
relating to prime brokerage services, which was issued by the Division
of Market Regulation (the "SEC Letter"), as the same may be amended,
modified or supplemented from time to time.
4. SHORT SALES
-----------
When placing any order to sell securities short for your account,
you are responsible for designating the order as such, and you hereby
authorize Clearing Agent and Xxxxxx Xxxx to xxxx the order as being
"short." You further agree to provide Clearing Agent and Xxxxxx Xxxx
with information concerning any securities borrowing arrangements made
by you and/or your Prime Broker in connection with any short sales.
5. CUSTOMER QUALIFICATION
----------------------
(a) You understand that you shall be required to maintain in
your account with your Prime Broker such minimum net equity in cash or
securities as may be required, from time to time, by your Prime Broker
(the "Minimum Net Equity"), which shall in no event be less than the
minimum net equity required by the SEC Letter, as such requirement may
be amended from time to time (initially: (i) $100,000 in cash or
securities with a ready market, for trades executed on behalf of a
customer account managed by an investment adviser registered under
Section 203 of the Investment Advisers Act of 1940 (a Registered
Investment Adviser-), or (ii) $500,000 in cash or securities with a
ready market for trades executed on behalf of an account not managed by
a Registered Investment Adviser). You further understand that, in the
event your account falls below such Minimum Net Equity, you shall bring
your account into compliance in a timely fashion. Each time you enter
an order with Clearing Agent or Xxxxxx Xxxx, you hereby represent that
you shall be in compliance with such Minimum Net Equity or will notify
Clearing Agent or Xxxxxx Xxxx otherwise.
(b) In the event that your Prime Broker indicates its
intention to disaffirm any trade, you hereby authorize and instruct your
Prime Broker to provide to Clearing Agent, upon the request of Clearing
Agent, the following information: (i) the account or accounts to which
any of your orders or trades relate; (ii) the instructions, if any,
provided to your Prime Broker regarding the allocation of any orders or
trades to any sub-accounts; and (iii) information available to your
Prime Broker with respect to any net equity in the account. In
addition, this Agreement will serve as further authorization and
instruction to your Prime Broker to furnish to Clearing Agent in the
event of a disaffirmance all such further and additional information
concerning an account as Clearing Agent shall request, provided that
such authorization shall have been confirmed by you in a separate letter
addressed and delivered to your Prime Broker and Clearing Agent. This
paragraph shall remain in effect so long as this Agreement is in effect,
shall survive the termination of this Agreement and shall apply to all
orders and trades given by you to Clearing Agent for clearance and
settlement through your Prime Broker. You hereby agree to release and
discharge your Prime Broker from all responsibility and liability
arising out of or incurred in connection with your grime Broker
furnishing any information to Clearing Agent pursuant to this paragraph.
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6. CONFIRMATION
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Clearing Agent shall confirm the Trade Data to your Prime Broker
and shall issue a confirmation for each Prime Brokerage Transaction by
the morning of the next business day after trade date. As used in this
Agreement, the term Business Day means any day which is not a Saturday
or Sunday on which The New York Stock Exchange, Inc. is open for
business. You may direct Clearing Agent to send confirmations to you in
care of your Prime Broker; the form of such directive may be obtained
from Clearing Agent and appended to this Agreement.
7. CUSTOMER'S SETTLEMENT OBLIGATION
--------------------------------
In the event your Prime Broker indicates its intention not to
settle, or fails to settle, any of your Prime Brokerage Transactions,
you shall be responsible and liable to Clearing Agent for settling such
Prime Brokerage Transaction directly with Clearing Agent in a margin
account that Clearing Agent will open or has opened in your name on its
books in accordance with Regulation T of the Board of Governors of the
Federal Reserve System. Clearing Agent shall send you a new
confirmation of the replacement transaction.
8. DISCRETIONARY ACCOUNT
---------------------
(a) If your account is managed on a discretionary basis by an
investment adviser, money manager or other person ("adviser"), you
hereby acknowledge that your Prime Brokerage Transactions may be
commingled with those of other accounts of your adviser ("sub-
accounts"), according to your adviser's instructions, for clearance by
Clearing Agent in a single bulk trade and for settlement in bulk with
your Prime Broker. You further acknowledge that in the event your Prime
Broker indicates its intention not to settle or does not settle such
bulk trade because of one or more subaccounts receiving an allocation,
Clearing Agent will either cancel and rebill the bulk trade to reflect
the reduction of the securities which were originally allocated to the
objectionable sub-accounts or, if permissible, execute a corrected
allocation of the Prime Brokerage Transaction to sub-accounts in
accordance with your adviser's instructions. To facilitate such
allocation, Clearing Agent may open and carry an account in your name on
its books and you shall be solely responsible and liable to Clearing
Agent for selling such transaction directly with Clearing Agent. You
acknowledge that your adviser may resubmit the bulk trade and execute a
corrected allocation of the Prime Brokerage Transaction.
(b) If you are executing this Agreement on behalf of a
customer whose account is managed by you, you hereby represent and
covenant to Clearing Agent that: (i) each time you execute an order on
behalf of such customer, such customer is in compliance with the Minimum
Net Equity or you shall notify Clearing Agent otherwise; (ii) you shall
not enter an order for such customer in the event such customer falls
below the Minimum Net Equity; (iii) you will provide Clearing Agent with
the customer's name, address and Tax I.D. Number to enable Clearing
Agent to open and maintain an account for the benefit of such customer;
(iv) you have sufficient knowledge of such customer to make the
representation set forth in paragraph 19 of this Agreement and; (v) you
have been duly authorized by the customer to execute this Agreement, to
bind such customer to arbitration, to enter orders to effect Prime
Brokerage Transactions, to execute a directive to Clearing Agent
regarding the mailing of confirmations, to disclose such financial
information as Clearing Agent deems necessary to effect such
transactions and to take such other actions as are contemplated by this
Agreement.
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9. FEES AND CHARGES
----------------
You understand that Clearing Agent and Xxxxxx Xxxx may charge
commissions and other fees for clearance or any other services furnished
to you and you hereby agree to pay such commissions and fees at the then
prevailing rates of Clearing Agent or Xxxxxx Xxxx, as the case may be.
You further understand that service fees, if any, may be changed from
time to time, upon 30 days prior written notice to you.
10. RESTRICTIONS ON ACCOUNT
-----------------------
You understand that Clearing Agent, in its sole discretion, may
refuse to accept or execute Prime Brokerage Transactions on your behalf
or restrict or prohibit trading of securities in your account(s) with
Clearing Agent, or refuse to clear your securities transactions.
11. DEFAULT
-------
If (i) you fail to perform your settlement obligations or in the
event your Prime Broker indicates its intention not to settle, or fails
to settle, any of your Prime Brokerage Transactions, as set forth in
paragraph 7 of this Agreement, (ii) any representation made by you shall
have been incorrect or untrue in any material respect when made, (iii)
you shall have admitted your inability to, or intention not to, perform
any of your obligations hereunder, (iv) you file a petition or other
proceeding in bankruptcy, insolvency, or for the appointment of a
receiver, or such a petition or proceeding is filed against you, (v) a
levy of an attachment is made against your account(s) with Clearing
Agent, (vi) you die or become mentally incompetent or you are a
corporation that dissolves, or (vii) you shall have otherwise breached
the terms of this Agreement (any one being an "Event of Default"),
Clearing Agent shall have the right to sell, without prior notice to
you, any and all property in which you have an interest held by or for
the benefit of Clearing Agent, to buy any property that may have been
sold short, to cancel any outstanding transactions and/or to purchase or
sell any other securities or other instruments to offset market risk,
and you shall be liable to Clearing Agent for all losses, costs and
expenses caused by such Event of Default, together with interest earned
thereon from the date of such Event of Default at the prime rate, until
payment in full is received by Clearing Agent.
12. LEGALLY BINDING
---------------
You hereby agree that this Agreement and all the terms hereof shall
be binding upon you and your estate, heirs, executors, administrators,
personal representatives, successors and assigns. You agree that all
Prime Brokerage Transactions shall be for your account(s) in accordance
with your oral or written instructions. You hereby waive any and all
defenses that any such instructions were not in writing as may be
required by the Statute of Frauds or any other similar law, rule or
regulation.
13. CLEARANCE ACCOUNTS
------------------
You hereby agree that because your Prime Brokerage Transactions are
executed by Xxxxxx Xxxx, who has introduced your account to Clearing
Agent for clearance services only, you agree that Xxxxxx Xxxx and its
employees are third party beneficiaries of this Agreement, and that the
terms and conditions hereof, including, but not limited to, the
Arbitration and Telephone Conversations provisions, shall be applicable
to all matters between or among any of you, Xxxxxx Xxxx and its
employees, and Clearing Agent and its employees.
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14. MARGIN ACCOUNT, SECURITY INTEREST, CONSENT TO LOAN OR PLEDGE SECURITIES
-----------------------------------------------------------------------
(a) You hereby agree to deposit and maintain such margin in
your margin account as Clearing Agent may in its sole discretion
require, and you agree to pay immediately on demand any debit balance
therein. Upon your failure to pay, or at any time Clearing Agent deems
necessary for its protection, without prior demand, call or notice,
Clearing Agent shall be entitled to exercise all rights and remedies
provided herein. Unless you advise us to the contrary, you represent
that you are not an affiliate (as defined in Rule 144(a) (1 ) under the
Securities Act of 1933) of the issuer of any security held in your
account.
(b) As security for the payment of your obligations to
Clearing Agent, Clearing Agent shall have a continuing security interest
in all property in which you have an interest held by or for the benefit
of Clearing Agent and may, without prior notice to-you, use, apply or
transfer any such property in the event of a breach or default under
this Agreement Clearing Agent shall have-all rights and remedies
available to a secured creditor in addition; to the rights and remedies
provided herein.
(c) Within the limits of applicable law and regulations, you
hereby authorize Clearing Agent to lend either to itself or to others
any securities held by or for the benefit of Clearing Agent in your
account, together with all attendant rights of ownership, and to use all
such property as collateral for its general loans. Any such property;
together with all attendant rights of ownership, may be pledged,
repledged, hypothecated or rehypothecated either separately or in common
with other such property for any amounts due to Clearing Agent thereon
or for a greater sum, and Clearing Agent shall have no obligation to
retain a like amount of similar property in its possession and control.
(d) You hereby acknowledge receipt of Clearing Agent's Truth-
in-Lending disclosure statement. You understand that interest will be
charged on any debit balances in your account, in accordance with the
methods described in such statement or in any amendment or revision
thereto which may be provided to you. Any interest charged on your
debit balance which is not paid at the close of an interest period will
be added to the opening balance for the next interest period.
15. AMENDMENT; ENTIRE AGREEMENT
---------------------------
You agree that Clearing Agent may modify the terms of this
Agreement at any time upon prior written notice. If such modifications
are unacceptable to you, you must notify Clearing Agent in writing
within 30 days of Clearing Agent's transmittal of such notice. Your
account may then be terminated by Clearing Agent, after which you agree
to remain liable to Clearing Agent for all existing liabilities or
obligations. Otherwise this Agreement may not be waived or modified
absent a written instrument signed by an authorized representative of
Clearing Agent. Except as set forth above, this Agreement represents
the entire agreement and understanding between you and Clearing Agent
concerning the subject matter hereof.
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16. GOVERNING LAW
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THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE INDICATED
ON THE SIGNATURE PAGE HERETO WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAW PRINCIPLES THEREOF.
17. ASSIGNABILITY
-------------
This Agreement and the rights and obligations arising out of the
Prime Brokerage Transactions cleared pursuant hereto may not be assigned
without the prior written consent of the other party, other than by
Clearing Agent as part of a general transfer of Clearing Agent's
business.
18. SEVERABILITY
------------
If any provision of this Agreement is or becomes inconsistent with
any applicable present or future law, rule or regulation, that provision
shall be deemed modified or, if necessary, rescinded in order to comply
with the relevant law, rule or regulation. All other provisions of this
Agreement shall continue to remain in full force and effect.
19. CAPACITY TO CONTRACT; CUSTOMER AFFILIATION
------------------------------------------
You represent that you are of legal age and that, unless you have
notified Clearing Agent to the contrary, neither you nor any member of
your immediate family is an employee of any exchange or member thereof,
an employee of the National Association of Securities Dealers, Inc. or a
member thereof, an employee of any corporation, firm or individual
engaged in the business of dealing, as broker or principal, in
securities, options or futures, or an employee of any bank, trust
company or insurance company.
20. EXTRAORDINARY EVENTS
--------------------
Clearing Agent shall not be liable for losses caused directly or
indirectly by government restrictions, exchange or market rulings,
suspension of trading, war, strikes or other conditions beyond its
control.
21. HEADINGS
--------
The headings of the provisions hereof are for descriptive purposes
only and shall not modify or qualify any of the rights or obligations
set forth in such provisions.
22. TELEPHONE CONVERSATIONS
-----------------------
For the protection of both you and Clearing Agent, and as a tool to
correct misunderstandings, you hereby authorize Clearing Agent in its
discretion and without prior notice to you, to monitor and/or record any
or all telephone conversations between you, Clearing Agent and any of
Clearing Agent's employees or agents. You acknowledge that Clearing
Agent may determine not to make or keep such recordings and such
determination shall not in any way affect any party's rights.
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23. 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
ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES
INDUSTRY.
* 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.
YOU AGREE, AND BY INTRODUCING YOUR ACCOUNT, XXXXXX XXXX AGREES, AND BY
AGREEING TO MAINTAIN AN ACCOUNT IN THE NAME OF YOUR PRIME BROKER AND
DESIGNATED FOR YOUR BENEFIT, CLEARING AGENT AGREES, THAT CONTROVERSIES
ARISING BETWEEN YOU AND XXXXXX XXXX, ITS CONTROL PERSONS, PREDECESSORS,
SUBSIDIARY" AND AFFILIATES AND ALL RESPECTIVE SUCCESSORS, ASSIGNS AND
EMPLOYEES, OR BETWEEN YOU AND CLEARING AGENT, ITS CONTROL PERSONS,
PREDECESSORS, SUBSIDIARIES AND AFFILIATES AND ALL RESPECTIVE SUCCESSORS,
ASSIGNS AND EMPLOYEES, WHETHER ARISING PRIOR TO, ON OR SUBSEQUENT TO THE
DATE HEREOF, SHALL BE DETERMINED BY ARBITRATION. ANY ARBITRATION UNDER
THIS AGREEMENT SHALL BE HELD AT THE FACILITIES AND BEFORE AN ARBITRATION
PANEL APPOINTED BY THE NEW YORK STOCK EXCHANGE, INC., OR IF THE
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TRANSACTION WHICH GIVES RISE TO SUCH CONTROVERSY IS EFFECTED IN ANOTHER
UNITED STATES MARKET WHICH PROVIDES ARBITRATION FACILITIES, BEFORE SUCH
OTHER FACILITIES. YOU MAY ELECT ONE OF THE FOREGOING FORUMS FOR
ARBITRATION, BUT IF YOU FAIL TO MAKE SUCH ELECTION BY REGISTERED MAIL OR
TELEGRAM ADDRESSED IN THE CASE OF XXXXXX XXXX TO XXXXXX XXXX LLC AT 000
XXXX XXXXXX, XXX XXXX, XXX XXXX 00000, ATTENTION: DIRECTOR, COMPLIANCE
DEPARTMENT OR, IN THE CASE OF CLEARING AGENT TO BEAR, XXXXXXX SECURITIES
CORP. AT XXX XXXXXXXXX XXXXXX XXXXX, XXXXXXXX, XXX XXXX 00000-0000,
ATTENTION: CHIEF LEGAL OFFICER (OR ANY OTHER ADDRESS OF WHICH YOU ARE
ADVISED IN WRITING), BEFORE THE EXPIRATION OF TEN DAYS AFTER RECEIPT OF
A WRITTEN REQUEST FROM XXXXXX XXXX OR CLEARING AGENT (AS THE CASE MAY
BE) TO MAKE SUCH ELECTION, THEN XXXXXX XXXX OR CLEARING AGENT (AS THE
CASE MAY BE) MAY 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.
BY SIGNING THIS AGREEMENT YOU ACKNOWLEDGE THAT:
1. THE SECURITIES IN YOUR MARGIN ACCOUNT AND ANY SECURITIES FOR WHICH
YOU HAVE NOT FULLY PAID, TOGETHER WITH ALL ATTENDANT OWNERSHIP RIGHTS,
MAY BE LOANED TO CLEARING AGENT OR LOANED OUT TO OTHERS; AND
2. YOU HAVE RECEIVED A COPY OF THIS AGREEMENT.
THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE AT PARAGRAPH
23.
* If your account is managed by an adviser, as such term is defined
in paragraph 8(a), or by an agent, and you are executing this
Agreement, you hereby authorize (Xxxxxxxx & Orking, Inc.) to
engage in Prime Brokerage Transactions on your behalf, and you
hereby represent and covenant that such advisor has been duly
authorized by you to take such actions as are contemplated by
this Agreement.
* If this is a loins Account, both parties must sign. Persons
signing on behalf of others should indicate the titles or
capacities in which they are signing.
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This Agreement is dated as of March 22, 1996.
/s/ Xxxxxxx X. Xxxxx, President
Xxxxxxxx & Orkin, Inc.
Typed or Printed Name
Xxxxxxx X. Xxxxx
_____________________________________
Signature
_____________________________________
Typed or Printed Name
_____________________________________
Signature
_____________________________________
_____________________________________
Mailing Address
Accepted by: ________________________
Clearing Agent
Date: _______________________________
Account No.: ________________________
Social Security # Or Tax ID: ________
Agreement Governed by the laws of the State of New York.
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