Exhibit 12
CORRESPONDENT CUSTOMER MARGIN AGREEMENT
Alex. Brown & Sons Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx Account No. __________
Baltimore, Maryland 21202
I have been informed and understand that the Financial Service
Organization with which I maintain my securities account (my "Financial Service
Organization") has entered into a Clearing Agreement with Xxxx. Xxxxx & Sons
Incorporated ("Xxxx. Xxxxx") pursuant to which Xxxx. Xxxxx will provide my
Financial Service Organization with certain services relating to my account
including approving, extending and maintaining credit on margin transactions.
In consideration for your providing such services for one or more of my
accounts now or hereafter opened, and any accounts in which I have an interest,
which account(s) have been introduced to you by my Financial Service
Organization (who will act on my behalf in the purchase or sale of securities),
I agree as follows:
1. Definitions
Throughout this Agreement, "I", "me", "my", "we", "us" and "the
undersigned" refer to the person(s) whose signature(s) appear(s) below
and all others who are legally obligated on this account. "You" and
"your" refer to Xxxx. Xxxxx, its subsidiaries, affiliates, officers,
directors, agents and employees. "Financial Service Organization"
refers to the firm through which I maintain my account(s), its
subsidiaries, affiliates, officers, directors and employees. Where the
context requires, the singular shall be plural and the plural shall be
singular.
2. Account is Carried on an Introduced Basis
I acknowledge that my account has been introduced to you by
arrangement with my Financial Service Organization. You are authorized
to accept from my Financial Service Organization, without inquiry or
investigation by you (i) orders for the purchase or sale of securities
or other property for my account, on margin or otherwise, and (ii) any
other instructions concerning my account. I understand and agree that
my Financial Service Organization is not your agent and that you shall
have no responsibility or liability to me for any acts or omissions of
my Financial Service Organization, its officers, employees or agents. I
intend that my Financial Service Organization be a beneficiary of this
Agreement. I also understand and agree that Xxxx. Xxxxx does not act as
investment advisor, determine customer investment objectives, solicit
orders, recommend securities for purchase or sale, or exclusive
discretionary authority with respect to my account. Xxxx. Xxxxx will
not be responsible for monitoring my account to determine adherence to
my stated investment objectives. I agree that any inquiry I may have
concerning the servicing of my account will be directed to my Financial
Service Organization.
3. Margin Account
I agree to open a margin account with you through my Financial Service
Organization and acknowledge to you that I understand each of the
following:
- When I purchase securities on margin, I borrow money from you
to finance that purchase; I may also borrow against collateral
in my margin account for other purposes.
- I will be obligated to pay interest on all sums I borrow from
you.
- I may be required to deliver additional collateral consisting
of cash or securities to you to maintain my loan balance, as
you require.
- By using a margin account to leverage my investments, I
increase my risk of loss.
- Xxxx. Xxxxx will deduct all interest charges from my account.
- My current debit balance will appear on each account
statement Xxxx. Xxxxx sends to me.
- Xxxx. Xxxxx will charge me interest on a monthly basis
and will disclose on my account statement the interest
rate and total interest charge.
4. Capacity to Contract, Customer Affiliation
By signing below, I represent that I am of legal age. I also represent
that no one except the persons named on the accounts) you are carrying
has an interest in such account(s). I agree to inform my Financial
Service Organization if I am or become a director or officer of any
publicly traded company.
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5. Joint Accounts
If this is a joint account, we agree that each account owner shall be
jointly and severally liable for this account. Notwithstanding the
foregoing, you are authorized, in your discretion, to require joint
action by all of the account owners with respect to any matters
concerning the account.
6. Credit Information and Investigation
I authorize you to obtain reports concerning my credit standing and
business conduct, at your discretion.
7. Interest Charges
I acknowledge that debit balances in my cash or margin account,
including but not limited to those arising from my failure to make
payment by settlement date for securities purchased, will be charged
interest at the then current rate, in accordance with your usual
custom. 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. I acknowledge receipt of your statement regarding
interest and service charges and that you may charge an account
maintenance fee with respect to inactive accounts.
8. Margin Maintenance, Calls for Additional Collateral, Liquidations and
Covering Short Positions
I will maintain such securities and other property in my account for
margin purposes as you shall require from time to time. You shall have
the right in accordance with your general policies regarding margin
maintenance requirements, as such may be modified or amended from time
to time, to require additional collateral or to liquidate securities
and other property whenever in your sole discretion you consider it
necessary for your protection. You 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 me or the attachment or levy
against any account with you in which I have an interest. In such an
event you are authorized to sell any and all securities and other
property in any of my accounts with you 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. Any such sales or purchases may be
made at your discretion on any exchange or other market where such
business is
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usually transacted or at public auction or private sale, and you may be
the purchaser for your own account. I 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 your right to sell or buy without
demand or notice as provided herein.
9. Satisfaction of Indebtedness
I agree to satisfy, upon demand, any indebtedness, and to pay any
debit balance remaining when any of my accounts are closed, either
partially or totally. I further agree to pay the reasonable costs and
expenses of collection of any debit balance and any unpaid deficiency
in my account, including attorney's fees. If my account is owned by
more than one individual, then our obligations under this Agreement
shall be joint and several.
10. Liens
I hereby grant to you a security interest in all securities and other
property in your possession in which I have an interest in order to
secure any and all indebtedness or any other of my obligations to you.
All such securities and other property shall be held as security for
the payment of any such obligations or indebtedness in any account with
you in which I have an interest, and you may, in your 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.
11. Authority to Borrow
In case of the sale of any security or other property by you at the
direction of my Financial Service Organization and your inability to
deliver the same to the purchaser by reason of my failure to supply you
therewith, I authorize you to borrow any security or other property
necessary to make delivery thereof, and agree to be responsible for any
loss which you may sustain thereby and any premiums which you may be
required to pay thereof by reason of your inability to borrow the
security or other property sold.
12. Loan or Pledge of Securities and Other Property
Within the limitations imposed by applicable laws, all securities and
other property now or hereafter held, carried or maintained by you in
your possession that have not been fully paid for or are held in a
margin account may be lent, either to yourself or to others, pledged
and repledged by you, without notice to me, either separately or in
common with other securities and other property of your customers for
any amount due in my account(s) which I have an interest, or for any
greater amount, and you may do so
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without retaining in your possession or control for delivery a like
amount of similar securities or other property. I understand that in
the event securities held for my account(s) are loaned out, I may lose
certain voting rights attended to such securities.
13. Short and Long Orders; Deliveries and Settlements
I agree that, in giving orders to sell, all "short" sales will be
designated by me as "short" and all other sales will be designated by
you as "long." "Short sale" means any sale of a security not owned by
me or any sale that is consummated on settlement date by delivery of a
borrowed security. I also agree that you may, at your discretion,
immediately cover any short sales in my account, without prior notice.
My failure to designate a sale order as "short" is a representation on
my part that I own the security line of restriction, and if the
security is not in your possession at the time of sale, I agree to
deliver the security to you or my Financial Service Organization before
settlement date. In case of non-delivery of a security, you are
authorized to purchase the security to cover my position and charge any
loss, commissions and fees to my account. I agree that if you fail to
receive payment for securities I have purchased you may, without prior
demand or notice, sell those securities or other property held by you
in any of my account(s) with you and any loss resulting therefrom will
be charged to such account(s). I authorize you, at your discretion, to
request and obtain extension(s) of my time to make payment for
securities I purchase, as provided for by Federal Reserve Bank
Regulation T.
14. Confirmations, Statements and Written Communications
I agree to notify my Financial Service Organization in writing within
ten (10) days of your sending me a confirmation, of any objection I
have to any transaction in my account. In the absence of such written
notification, I agree that all transactions for my account will be
final and binding on me. Confirmations of transactions, as well as
other communications, may be sent to the address I provided to my
Financial Service Organization or to such other address I may hereafter
give to my Financial Service Organization in writing, and all
communications so sent, whether by mail, private carrier, facsimile,
messenger or otherwise, shall be deemed given to me, whether actually
received or not. Unless I advise you in writing to the contrary, you
may disclose my name and address to the issuers of securities which you
hold for me.
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15. Applicable Rules and Regulations
All transactions in my account shall be subject to the constitution,
rules, regulations, customs and usages of the exchange or market, and
its clearing house, if any, where the transactions are executed.
Transactions shall also be subject to the provisions of federal and
state securities laws, as amended, and to the rules and regulations of
the Securities and Exchange Commission and the Board of Governors of
the Federal Reserve System. You shall not be liable for loss caused
directly or indirectly by your compliance with such rules or
regulations or by government restrictions, exchange or market rulings,
suspension of trading, war, or other conditions beyond your control.
16. Waiver
Except as specifically permitted in this Agreement, no provision of
this Agreement can be waived, altered, modified, or amended unless such
is agreed to in writing.
17. Miscellaneous
This Agreement shall be binding upon my heirs, executors,
administrators, personal representatives and permitted assigns. It
shall inure to the benefit of your successors and assigns to whom you
may transfer my account. This Agreement contains the entire
understanding between us concerning the subject matter of this
Agreement. I may not assign the rights and obligations hereunder
without first obtaining your prior written consent. I agree that Xxxx.
Xxxxx has the right to amend this Agreement at any time by sending
written notice of such amendment to me. Any such amendment shall be
effective as of the date established by Xxxx. Xxxxx. 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. This Agreement shall be deemed to have
been made in the State of Maryland and shall be construed, and the
rights of the parties determined, in accordance with the laws of the
State of Maryland and the United States, as amended, without giving
effect to the choice of law or conflict-of-laws provisions thereof.
18. Arbitration Disclosures
I am aware that we are agreeing to arbitrate disputes regarding my
account as set forth in paragraph 19. I also have been informed of the
following regarding the arbitration process:
- Arbitration is final and binding on the parties.
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- The parties are waiving their right to seek remedies in
court, including the right to a 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
arbitrators who were or are affiliated with the securities
industry.
19. Agreement to Arbitrate
It is agreed that all past, present, or future controversies between
myself, any persons having an interest in my account, Xxxx. Xxxxx, my
Financial Service Organization, or any of the employees or affiliates
of either, concerning any transaction or the construction, performance,
or breach of this or any other agreement pertaining to securities and
other property, whether entered into prior, on or subsequent to the
date hereof, including but not limited to claims of fraud in the
inducement, shall be submitted to arbitration pursuant to the Federal
Arbitration Act. Any arbitration under this Agreement shall be
conducted before the National Association of Securities Dealers, Inc.
("NASD") or any other securities industry self-regulatory organization
of which Xxxx. Xxxxx or your correspondent is a member, in accordance
with the rules then obtaining of such organization. The award of the
arbitrator(s), or a majority of them, shall be final and judgment upon
such award may be entered 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 action until: (i) the class certification is
denied; or (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.
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By signing below, I authorize you to open and carry a margin account
for my benefit, and acknowledge that securities in my account may be
loaned to Xxxx. Xxxxx as principal or loaned to others. I also
acknowledge that I have received a copy of this Agreement. I further
acknowledge that:
THIS AGREEMENT CONTAINS A PRE-DISPUTE
ARBITRATION CLAUSE AT PARAGRAPH 19 ABOVE.
PLEASE READ AND SIGN BELOW.
(Individuals) SIGNATURES (Partnership)
----------------------- ---------- ----------------------
(Date) (Name of Partnership)
_______________________ __________ By_________ _______
(Second Party, if Joint (Date) (General (Date)
Account) Partner)
(Corporation)
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(Name of Corporation)
(Seal)
Attest_________________ __________ By__________ _______
(Date) (Date)
Title__________________ Title_________________
