1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE EXCHANGE ACT OF 1934
(Amendment No. 5)*
CENTRAL VALLEY COMMUNITY BANCORP
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(Name of Issuer)
COMMON STOCK, NO PAR VALUE
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(Title of Class of Securities)
155685100
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(CUSIP Number)
Richard J. Perry, Jr., Esquire
Perry & Associates, P.C.
1826 Jefferson Place, N.W.
Washington, D.C. 20036
(202) 775-8109
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 12, 2002
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(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 that is the subject of this Schedule 13D, and is filing this
schedule because of 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box.[ ]
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See 240.13d-7(b) for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Exhibit Index at page 12
Page 1 of 24
2
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CUSIP NUMBER 155685100
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1. NAMES OF REPORTING PERSONS. I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY).
Financial Institution Partners II, L.P. / 36-4131559
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)X
(b)
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3. SEC Use Only
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4. SOURCE OF FUNDS (See Instructions)
WC
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5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Organized: State of Delaware
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NUMBER OF 7. SOLE VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY ----------------------------------------------------------------
EACH 8. SHARED VOTING POWER
REPORTING
PERSON WITH 71,836 shares
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9. SOLE DISPOSITIVE POWER
0
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10. SHARED DISPOSITIVE POWER
71,836 shares
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
71,836 shares
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12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES. [ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.6%
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14. TYPE OF REPORTING PERSON
PN
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Page 2 of 24
3
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CUSIP NUMBER 155685100
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1. NAME OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY).
Hovde Capital, L.L.C. / 91-1825712
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)X
(b)
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3. SEC Use Only
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4. SOURCE OF FUNDS
AF
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5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e). [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Organized: State of Nevada
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NUMBER OF 7. SOLE VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY ----------------------------------------------------------------
EACH
REPORTING 8. SHARED VOTING POWER
PERSON WITH(1)
71,836 shares
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9. SOLE DISPOSITIVE POWER
0
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10. SHARED DISPOSITIVE POWER
71,836 shares
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
71,836 shares
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12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES. [ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.6%
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14. TYPE OF REPORTING PERSON
OO
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(1) Of the 71,836 Shares beneficially owned by Hovde Capital, L.L.C., 71,836
are as General Partner to Financial Institution Partners II, L.P.
Page 3 of 24
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CUSIP NUMBER 155685100
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1. NAMES OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY).
Eric D. Hovde
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)X
(b)
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3. SEC Use Only
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4. SOURCE OF FUNDS
AF
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5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e). [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
USA
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NUMBER OF 7. SOLE VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY ----------------------------------------------------------------
EACH 8. SHARED VOTING POWER
REPORTING
PERSON WITH(2) 71,836 SHARES
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9. SOLE DISPOSITIVE POWER
0
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10. SHARED DISPOSITIVE POWER
71,836 SHARES
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
71,836 SHARES
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12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES. [ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.6%
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14. TYPE OF REPORTING PERSON
IN
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(2) Of the 71,836 Shares beneficially owned by Eric D. Hovde, 71,836 are as
Chairman, Chief Executive Officer, and managing member of Hovde Capital, L.L.C.
Page 4 of 24
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CUSIP NUMBER 155685100
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1. NAMES OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Steven D. Hovde
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)X
(b)
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3. SEC Use Only
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4. SOURCE OF FUNDS
AF
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5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
USA
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NUMBER OF 7. SOLE VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY ----------------------------------------------------------------
EACH 8. SHARED VOTING POWER
REPORTING
PERSON WITH(3) 71,836 shares
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9. SOLE DISPOSITIVE POWER
0
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10. SHARED DISPOSITIVE POWER
71,836 shares
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
71,836 shares
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12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES. [ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.6%
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14. TYPE OF REPORTING PERSON
IN
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(3) Of the 71,836 Shares beneficially owned by Steven D. Hovde, 71,836 are as
President, Treasurer, and managing member of Hovde Capital, L.L.C.
Page 5 of 24
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Item 1. Security and Issuer
The class of security to which this statement relates is the common stock,
no par value, of Central Valley Community Bancorp (the "Issuer"). The address
of the principal executive offices of the Issuer is 600 Pollasky Avenue, Clovis,
California 93612.
Item 2. Identity and Background
The persons filing this statement are Financial Institution Partners II,
L.P. (the "Limited Partnership"), Hovde Capital, L.L.C. (the "General Partner"),
Eric D. Hovde, and Steven D. Hovde who are collectively referred to herein as
the "Reporting Persons." The Limited Partnership is a Delaware limited
partnership formed for the purpose of investing in, among other things, the
equity securities of various financial institutions and financial services
companies. Hovde Capital, L.L.C., a Nevada limited liability company, is the
general partner of Financial Institution Partners II, 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 officers and
members of the General Partner. 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 business and the address of its principal business
and offices for the Limited Partnership and the General Partner 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 Partner who are
Reporting Persons. The General Partner controls the Limited Partnership.
None of the Reporting Persons or executive officers, directors or
controlling persons of the General Partner 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.
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 acquired the Shares for investment purposes and as
set forth below:
The Reporting Persons expect to evaluate on an ongoing basis their
investment in the Issuer, and may independently from time to time acquire
additional Shares, dispose of Shares or formulate other purposes, plans or
proposals regarding the Issuer or the Shares held by the Reporting Persons in
addition to those discussed above. Any such acquisitions or dispositions may be
made, subject to applicable law, in open market or privately negotiated
transactions or otherwise.
Except as described above, neither the Reporting Persons nor, to the
knowledge of the Reporting Persons, any of the persons named in Schedule 1
hereto have any plans or proposals which related to or would result in any of
the actions or transactions specified in clauses (a) through (j) of Item 4 of
Schedule 13D.
Page 6 of 24
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Item 5. Interest in Securities of the Issuer
(a), (b) Schedule 3 hereto, which is incorporated by reference herein,
sets forth, as of July 22, 2002, 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
1,294,683 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 its
control over the Limited Partnership, all decisions regarding voting and
disposition of the Shares beneficially owned by the Limited Partnership are made
by the General Partner acting through its chief executive officer, president, or
managing member. As such, the Limited Partnership and the General Partner 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 Partner, Eric D. Hovde and Steven D. Hovde may be deemed to have
beneficial ownership of the Shares. Neither the General Partner, its executive
officers, or controlling persons beneficially owns any Shares personally or
otherwise.
(c) Schedule 4 hereto, which is incorporated by reference herein,
describes, as of July 22, 2002, transactions in the Shares effected during the
past sixty (60) days.
(d) None.
(e) Not Applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
None.
Page 7 of 24
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Item 7. Materials to be filed as Exhibits
Exhibit A - Consent Agreement pursuant to 17 C.F.R. 13d-1(k)(1)(iii)
Exhibit B - Addendum to Banc of America Securities LLC
Customer Agreement
Exhibit C - Account Agreement between Banc of America Securities LLC and
Financial Institution Partners II, L.P.
Exhibit D - Prime Broker Agreement between Banc of America Securities LLC
and Financial Institution Partners II, L.P.
Exhibit E - Partnership Agreement between Banc of America Securities LLC and
Financial Institution Partners II, L.P.
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 INSTITUTION PARTNERS II, L.P., by its
General Partner, HOVDE CAPITAL, L.L.C.
By: /s/ Richard J. Perry, Jr.
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Richard J. Perry, Jr.
Its: Secretary
HOVDE CAPITAL, L.L.C.
By: /s/ Richard J. Perry, Jr.
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Richard J. Perry, Jr.
Its: Secretary
ERIC D. HOVDE
/s/ Eric D. Hovde
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STEVEN D. HOVDE
/s/ Steven D. Hovde
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Dated: 07/22/02
Page 8 of 24
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Schedule 1
INFORMATION RELATING TO REPORTING PERSONS
Principal Business and
Address of Principal Business
Name or Principal Office
---- ------------------------------
Financial Institution Limited partnership formed to
Partners II, L.P. make 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, N.W.
Washington, D.C. 20036
Organized: State of Nevada
INFORMATION RELATING TO EXECUTIVE OFFICERS, DIRECTORS AND/OR CONTROLLING
PERSONS
NAME PRINCIPAL OCCUPATION
ADDRESS BUSINESS ADDRESS CITIZENSHIP
------- -------------------- -----------
Steven D. Hovde(4) 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 (5) 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
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(4) Steven D. Hovde is affiliated with the following Reporting Persons:
President, Treasurer and Managing Member of Hovde Capital, L.L.C.
(5) Eric D. Hovde is affiliated with the following Reporting Persons: Chairman,
Chief Executive Officer and Managing Member of Hovde Capital, L.L.C.
Page 9 of 24
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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.
Amount
Originally
Total Financed/ Source of
Name Consideration Current Balance Funds
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Financial $987,745.00 $0 Working Capital
Institution
Partners II, L.P.
Hovde Capital, $987,745.00 $0 Working Capital
L.L.C. Of Affiliate
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Page 10 of 24
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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.
Approximate
Name Number of Shares Percentage
---- ---------------- -----------
Financial Institution 71,836 5.6%
Partners II, L.P.
Hovde Capital, L.L.C. 71,836 5.6%
Eric D. Hovde 71,836 5.6%
Steven D. Hovde 71,836 5.6%
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Aggregate Shares Held by 71,836 5.6%
Reporting Persons
Page 11 of 24
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SCHEDULE 4
Description of Transactions in Shares Effected Within 60 Days.
The Reporting Persons have effected the following transactions in the Shares
within sixty (60) days of July 12, 2002, and all subsequent days up to and
including July 22, 2002:
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Transaction Number of Transaction Transaction Broker
Date Shares Price Type
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Financial 07/17/02 1,000 $24.00 Sell Wedbush
Institution Morgan
Partners
II, L.P. 07/12/02 5,000 $23.58 Sell Merrill
Lynch
07/12/02 20,000 $23.50 Sell Wedbush
Morgan
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EXHIBIT INDEX
Page
Exhibit A - Consent Agreement to 17 C.F.R. 13d-1(k)(1)(iii) 13
Exhibit B - Addendum to Banc of America Securities LLC 14
Customer Agreement
Exhibit C - Customer Agreement between Banc of America 15
Securities LLC and Financial Institution
Partners II, L.P.
Exhibit D - Prime Broker Agreement between Banc of America 19
Securities LLC and Financial Institution
Partners II, L.P.
Exhibit E - Partnership Agreement between Banc of America 23
Securities LLC and Financial Institution
Partners II, L.P.
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Page 12 of 24
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EXHIBIT A
Consent Agreement Pursuant to 17 C.F.R. 13d-1(k)(1)(iii)
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(k)(1)(iii) with respect to his/its beneficial ownership of the
shares of the Issuer.
FINANCIAL INSTITUTION PARTNERS II, L.P., by its
General Partner, HOVDE CAPITAL, L.L.C.
By: /s/ Richard J. Perry, Jr.
-------------------------------------------------
Richard J. Perry, Jr.
Its: Secretary
HOVDE CAPITAL, L.L.C.
By: /s/ Richard J. Perry, Jr.
-------------------------------------------------
Richard J. Perry, Jr.
Its: Secretary
ERIC D. HOVDE
/s/ Eric D. Hovde
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STEVEN D. HOVDE
/s/ Steven D. Hovde
-------------------------------------------------
Dated: 07/22/02
Page 13 of 24
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EXHIBIT B
[ON NATIONSBANC MONTGOMERY SECURITIES LETTERHEAD]
January 22, 1998
Richard Perry
Hovde Financial, Inc.
1826 Jefferson Place, N.W.
Washington, D.C. 20036
Dear Rick,
Regarding the customer agreement, the following will serve as an addendum:
All margin loans made to you will be governed by standard margin procedures
outlined in the customer agreement. In the event NationsBanc Montgomery
Securities LLC modifies the terms of our mutually agreed upon pricing agreement,
or decides to discontinue, or substantially reduce the level of Prime Brokerage
Services to your firm, *we will provide thirty days' written notice thereof and
on and after the last day of such thirty day notice period, unless such notice
related to the modification of our pricing agreement and you accepted the terms
of such modification within the thirty day notice period,* NationsBanc
Montgomery Securities LLC shall have the right to make demand for payment of any
debit balance then owing with respect to any of your margin accounts.
Glen Dailey
Senior Managing Director
Page 14 of 24
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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.
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 15 of 24
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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.
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.
Page 16 of 24
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- THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS
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.
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18
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:____________________________________________
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19
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.
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20
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 20 of 24
21
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 quarterly
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 written
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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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.
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
------ -------
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23
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 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 23 of 24
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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)
_______________________________
_______________________________
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