UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 6)*
First Financial Fund, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
320228 10 9
(CUSIP Number)
Stephen C. Miller, Esq.
Krassa, Madsen & Miller, LLC
1680 38th Street, Suite 800
Boulder, Colorado 80301
(303) 444-5483
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
January 28, 2000
(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 which is the subject of this Schedule 13D,
and is filing this schedule because of ss.ss.240.13d-1(e), 240.13d-
1(f) or 240.13d-1(g), check the following box. 0
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits.
See ss.240.13d-7 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).
CUSIP No. 320228 10 9
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only)
Ernest Horejsi Trust No. 1B
2. Check the Appropriate Box if a Member of a Group (See
Instructions)
(A)
(B)
3. SEC Use Only
4. Source of Funds (See Instructions) WC OO
5. Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e)
6. Citizenship or Place of Organization Kansas
Number of 7. Sole Voting Power 1,795,100
Shares Bene-
ficially 8. Shares Voting Power
Owned by Each
Reporting 9. Sole Dispositive Power 1,795,100
Person With
10. Shared Dispositive Power
11. Aggregate Amount Beneficially Owned by Each Reporting Person
1,795,100
12. Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
13. Percent of Class Represented by Amount in Row (11)
7.29%
14. Type of Reporting Person (See Instructions)
OO
CUSIP No. 320228 10 9
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only)
Lola Brown Trust No. 1B
2. Check the Appropriate Box if a Member of a Group (See
Instructions)
(A)
(B)
3. SEC Use Only
4. Source of Funds (See Instructions) WC OO
5. Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e)
6. Citizenship or Place of Organization Kansas
Number of 7. Sole Voting Power 1,922,200
Shares Bene-
ficially 8. Shares Voting Power
Owned by Each
Reporting 9. Sole Dispositive Power 1,922,200
Person With
10. Shared Dispositive Power
11. Aggregate Amount Beneficially Owned by Each Reporting Person
1,922,200
12. Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
13. Percent of Class Represented by Amount in Row (11)
7.81%
14. Type of Reporting Person (See Instructions)
OO
CUSIP No. 320228 10 9
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only)
Mildred B. Horejsi Trust
2. Check the Appropriate Box if a Member of a Group (See
Instructions)
(A)
(B)
3. SEC Use Only
4. Source of Funds (See Instructions) WC OO
5. Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e)
6. Citizenship or Place of Organization New York
Number of 7. Sole Voting Power 476,500
Shares Bene-
ficially 8. Shares Voting Power
Owned by Each
Reporting 9. Sole Dispositive Power 476,500
Person With
10. Shared Dispositive Power
11. Aggregate Amount Beneficially Owned by Each Reporting Person
476,500
12. Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
13. Percent of Class Represented by Amount in Row (11)
1.94%
14. Type of Reporting Person (See Instructions)
OO
CUSIP No. 320228 10 9
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only)
Stewart R. Horejsi
2. Check the Appropriate Box if a Member of a Group (See
Instructions)
(A)
(B)
3. SEC Use Only
4. Source of Funds (See Instructions) Not applicable
5. Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e)
6. Citizenship or Place of Organization United States
Number of 7. Sole Voting Power 0
Shares Bene-
ficially 8. Shares Voting Power 0
Owned by Each
Reporting 9. Sole Dispositive Power 0
Person With
10. Shared Dispositive Power 0
11. Aggregate Amount Beneficially Owned by Each Reporting Person
0
12. Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions) X
13. Percent of Class Represented by Amount in Row (11)
0%
14. Type of Reporting Person (See Instructions)
IN
Amendment No. 6 to Statement on Schedule 13D
This amended statement on Schedule 13D relates to the
Common Stock, $.001 par value per share (the "Shares"), of
First Financial Fund, Inc., a Maryland corporation (the
"Company"). Items 3, 4, 5, 6, and 7 of this statement,
previously filed by the Ernest Horejsi Trust No. 1B (the
"Trust"), the Lola Brown Trust No. 1B (the "Brown Trust") and
the Mildred B. Horejsi Trust (the "Mildred Trust"), as the
direct beneficial owner of Shares, and Stewart R. Horejsi, by
virtue of the relationships described previously in this
statement, are hereby amended as set forth below.
Item 3. Source and Amount of Funds or Other Consideration.
No change except for the addition of the following:
The total amount of funds required by the Mildred Trust to
purchase the Shares as reported in Item 5(c) was $3,556,407.46.
Such funds were provided by the Mildred Trust's cash on hand and
margin borrowings under a cash management account maintained by the
Mildred Trust with Merrill Lynch, Pierce, Fenner & Smith
Incorporated. The agreement regarding such cash management account
is attached hereto as Exhibit 3 and incorporated in this statement
by reference.
Item 4. Purpose of Transaction.
No change except for the addition of the following:
The Mildred Trust acquired the Shares described in Item 5(c)
of this statement in order to increase its equity interest in the
Company. Depending upon their evaluation of the Company's
investments and prospects, and upon future developments (including,
but not limited to, performance of the Shares in the market, the
effective yield on the Shares, availability of funds, alternative
uses of funds, and money, stock market and general economic
conditions), any of the Reporting Persons or other entities that may
be deemed to be affiliated with the Reporting Persons may from time
to time purchase Shares, and any of the Reporting Persons or other
entities that may be deemed to be affiliated with the Reporting
Persons may from time to time dispose of all or a portion of the
Shares held by such person, or cease buying or selling Shares. Any
such additional purchases or sales of the Shares may be in open
market or privately-negotiated transactions or otherwise.
Item 5. Interest in Securities of the Issuer.
No change except for the addition of the following:
(a) As reported in its Semi-Annual Report dated November 3,
1999, for the period ending September 30, 1999, and filed with the
Securities and Exchange Commission on December 9, 1999, the Company
purchased 436,200 Shares which resulted in a reduction of the
Shares outstanding as of September 30, 1999, to 24,628,781 Shares
(the "Outstanding Shares"). The Trust is the direct beneficial
owner of 1,795,100 Shares, or approximately 7.29% of the Outstanding
Shares. The Brown Trust is the direct beneficial owner of 1,922,200
Shares, or approximately 7.81% of the Outstanding Shares. The
Mildred Trust is the direct beneficial owner of 476,500 Shares, or
approximately 1.94% of the Outstanding Shares.
By virtue of the relationships reported in this statement, Mr.
Horejsi may be deemed to share indirect beneficial ownership of the
Shares directly beneficially owned by the Trust, the Brown Trust and
the Mildred Trust. Mr. Horejsi disclaims all such beneficial
ownership.
(c) The table below sets forth purchases of the Shares by the
Mildred Trust since January 15, 2000. Such purchases were
effected by the Mildred Trust on the New York Stock Exchange.
Date
Amount of Shares
Approximate Price
Per Share
(exclusive of commissions)
01/18/00
50000
$8.1250
01/18/00
1300
$8.0625
01/19/00
18700
$8.0625
01/19/00
10900
$7.9375
01/19/00
10000
$8.0000
01/19/00
2500
$8.0625
01/20/00
9100
$7.9375
01/20/00
6400
$7.9375
01/20/00
23600
$7.9375
01/20/00
16300
$7.9375
01/25/00
49700
$7.7500
01/25/00
300
$7.6875
01/26/00
4600
$7.7500
01/27/00
31500
$7.7500
01/28/00
50000
$7.7500
01/28/00
17500
$7.7500
01/28/00
20000
$7.7500
01/31/00
32500
$7.7500
01/31/00
32200
$7.7500
02/01/00
9300
$7.7500
02/02/00
20000
$7.8750
02/03/00
20000
$7.9375
02/03/00
10000
$8.0000
02/03/00
5200
$7.8125
Item 6. Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of the Issuer.
The Mildred Trust is party to a Cash Management Account
Agreement with Merrill Lynch, Pierce, Fenner & Smith
Incorporated. Margin borrowings under the agreement bears
interest at the federal funds rate plus one half of one percent
and are due upon demand. Margin borrowings from Merrill Lynch
are based on the collateral in the account maintained by the
Mildred Trust. As of February 2, 2000, approximately $6.2
million in borrowings were outstanding under such account. The
foregoing summary of the Mildred Trust's agreement with Merrill
Lynch is qualified in its entirety by reference to the attached
Exhibit 3, which is incorporated in this statement by reference.
Item 7. Material to be Filed as Exhibits
No change except for the addition of the following:
Exhibit 3 Cash Management Account Agreement between
Mildred B. Horejsi Trust and Merrill Lynch, Pierce, Fenner &
Smith Incorporated.
Signature
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
Date: February 4, 2000
/s/ Stewart R. Horejsi
Stewart R. Horejsi
/s/ Stephen C. Miller
Stephen C. Miller, as Vice
President of Badlands Trust
Company, trustee of the Ernest
Horejsi Trust No. 1B, the Lola
Brown Trust No. 1B and the Mildred
B. Horejsi Trust.
Exhibit 3
CASH MANAGEMENT ACCOUNTr AGREEMENT
INTRODUCTION
This Agreement contains the terms governing the Cash Management
Accountr financial service ("CMAr Service"). I will read this
Agreement and keep it for my records because I know that by
signing the CMA Application and Agreement form or the CMA
SubAccount_ Application and Agreement form (the "Application and
Agreement form(s)") I am agreeing to its terms.
DEFINITIONS
In this Agreement, "I," "me," "my" or "accountholder" means each
person who signs the CMA Application and Agreement form or the
CMA SubAccount Application and Agreement form. "You," "your" or
"MLPF&S" means Merrill Lynch, Pierce, Fenner & Smith
Incorporated. "MLB&T" means Merrill Lynch Bank & Trust Co.
"BANK ONE" means BANK ONE, COLUMBUS, N.A. "MLNF" means Merrill
Lynch National Financial. "CHASE" means the Chase Manhattan
Bank, N.A. MLB&T, MLNF, CHASE and BANK ONE are referred to
collectively as "Banks." The "Issuer" means MLB&T or MLNF,
whichever issues the Visa Cards from time to time.
"Card/Check Account" means the account(s) established for me by
the Banks. "Checks" means checks issued to me by BANK ONE for
use with my Card/Check Account. "Card" or "Cards" means one or
more Classic Visar cards issued to me for use with my Card/Check
Account. Unless the context requires otherwise, "Card" or
"Cards" also means one or more CMA Visa Gold Program cards issued
to me for use with my Card/Check Account if I subscribe to and am
approved for the CMA Visa Gold Program. The name of the issuer
will appear on the Card. The Card(s) issued to me if I subscribe
to the CMA Visa Gold Program will also be referred to as the
"Visa Gold Program Card(s)." "Money Funds" means the CMA money
market funds. "Money Accounts" means the Money Funds and any
FDIC-insured money market deposit accounts opened for me through
the Insured Savings_ Account program.
For purposes of this Agreement, "securities and other property"
means, but is not limited to, money, securities, financial
instruments and commodities 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 you or by any of your affiliates, in your possession and
control, or in the possession and control of any such affiliate,
for any purpose, in and for any of my accounts now or hereafter
opened, including any account in which I may have an interest.
DESCRIPTION OF THE CMAr SERVICE
1. The CMA Service consists of: (1) an MLPF&S securities account
(referred to as the "Securities Account"), which is either a cash
account, or with the Investor CreditLine_ service, a margin
account, (2) a choice of Money Accounts, (3) if applicable, a
Card/Check Account provided by the Banks and (4) in applicable,
optional CMA services as described in the Cash Management Account
Program Description.
DESCRIPTION OF THE CMA MASTER FINANCIAL_ SERVICE
2. The CMA Master Financial_ Service consists of: (1) a master
account ("Master CMA Account") established with the full CMA
Service as described above and (2) one or more related CMA
SubAccounts established by or with the consent of a Master CMA
Accountholder. Each CMA SubAccount is entitled to partial CMA
service consisting of: (1) a Securities Account, which is either
a cash account or, with the Investor CreditLine Service, a margin
account, (2) a choice of Money Accounts and (3) optional CMA
services to the extent eligible. A CMA SubAccount is not
eligible for a Card/Check Account.
CMA SUBACCOUNT_ AUTHORIZATIONS
3. By signing the CMA SubAccount Application and Agreement form,
each CMA SubAccountholder designates the Master CMA Accountholder
as his or her agent for the purpose of receiving monthly CMA
account statements and any notices or other communications and
authorizes MLPF&S to mail them to the address designated by the
Master CMA Accountholder from time to time. If applicable, each
CMA SubAccountholder also authorizes MLPF&S (subject to account
eligibility requirements) to accept telephonic instructions from
the Master CMA Accountholder for the transfer of funds through
the CMA Funds Transfer Service to such CMA SubAccount from the
Master CMA Account and/or from such CMA SubAccount to the Master
CMA Account, as selected in the CMA SubAccount Application and
Agreement form. In the event any erroneous transfers are made,
the Master CMA Accountholder and the SubAccountholder authorize
MLPF&S to initiate appropriate corrections. The foregoing
authorizations shall remain in full force and effect until
written notice of revocation is delivered to MLPF&S, after which
the CMA SubAccount shall remain subject to the terms of this
Agreement to the extent it receives the CMA Service in accordance
with the policies of MLPF&S.
AGREEMENT REGARDING CASH, MONEY ACCOUNT BALANCES AND OTHER ASSETS
AND FEES
4. Available free credit balances in my Securities Account will
automatically be invested or deposited at least once a week into
the Money Account that I have designated as my Primary Money
Account. I understand that you may reasonably withhold access to
my Money Account balances until you are satisfied that checks
credited to my Securities Account have been collected. You may
satisfy amounts that I owe in connection with my CMA Service
account (such as debit balances in the Securities Account,
amounts owing in my Card/Check Account, or investments or
deposits made for me that are later reversed), from the assets in
my Money Accounts (including funds obtained by redeeming Money
Funds shares) or from my Securities Account (including, if
applicable, by making loans to me). Certain fees, including an
annual fee, which are subject to change, will be charged to my
account for the financial services provided to me.
REPRESENTATIONS, ADDITIONAL TERMS AND AMENDMENTS
5. I have received a copy of the Money Funds' prospectuses, the
Insured Savings Account Fact Sheet and the Cash Management
Account Program Description. These documents shall be referred
to in this Agreement as the "Documents." The Documents contain
additional terms governing the CMA Service. I agree that these
Documents are incorporated into this Agreement as though they
were fully set out in the Agreement. Subject to applicable law,
you and the Banks also have the right to amend the Documents by
so notifying me in writing. Unless the context otherwise
requires, the term "Agreement" shall include the Documents, as
amended from time to time.
I agree that you and the Banks shall have the right to amend this
Agreement, by modifying or rescinding any of its existing
provisions or by adding any new provision, at any time by sending
notice of the amendment to me. Any such amendment shall be
effective as of a date to be established by you and the Banks,
subject to applicable law.
I understand there may be additional documentation required by
applicable law or the policies and procedures of MLPF&S or the
Banks. I agree to promptly comply with any such requests for
additional documents.
HEADINGS ARE DESCRIPTIVE
6. The heading of each provision of this Agreement is for
descriptive purposes only and shall not be deemed to modify or
qualify any of the rights or obligations set forth in each such
provision.
JOINT ACCOUNTS AND JOINT AND SEVERAL LIABILITY
7. If more than one person signs this Agreement, each person
shall be an accountholder and their obligations under this
Agreement shall be joint and several. The legal ownership of the
account shall be in such form as the accountholders shall
designate in the Application and Agreement form and as reflected
in the account title. In the event no designation is made,
MLPF&S is authorized to deal with the accountholders as tenants
in common (without rights of survivorship).
Notwithstanding the choice of law provisions of Paragraph 11,
which shall govern the contractual obligations of the parties
under this Agreement, the legal ownership of the account shall be
governed by and interpreted under the internal laws of the state
of permanent residence of accountholders who are U.S. citizens.
Non-resident aliens agree that the form of joint ownership
designated for the account shall be governed (notwithstanding the
laws of any other jurisdiction to the contrary) by the internal
laws of the State of New York and, for purposes of determining
all matters with regard to the account, agree to submit to the
jurisdiction of the courts of New York and the Federal Courts in
the Southern District of New York and consent to service of
process by certified mail to the account's address of record.
All accountholders agree that each accountholder has authority to
transact any business on behalf of the account as fully and
completely as if each accountholder were the sole owner of the
account. Subject to MLPF&S policies, MLPF&S may accept orders
and instructions, written or oral, with respect to the account
from each accountholder, without notice to any other
accountholder, for the receipt, transfer and withdrawal of funds
by check, wire transfer or otherwise and for the purchase, sale,
exchange, transfer or other disposition of securities and other
property (including margin transactions and short sales if the
accountholders have selected the Investor CreditLine service).
All accountholders further agree that all securities and other
property that MLPF&S may be holding for any of them, either in
this account or otherwise, shall be subject to a lien for the
discharge of the obligations of this account to MLPF&S, such lien
to be in addition to any rights and remedies MLPF&S may otherwise
have.
In the event of the death of an accountholder, divorce of married
accountholders, assignment of an accountholder's interest or
other event that causes a change in ownership of the account, all
accountholders or the surviving accountholder(s) as the case may
be shall immediately give MLPF&S written notice thereof, and
MLPF&S may, in such event, take such action, including requiring
such documents or imposing such restrictions on the account, as
MLPF&S may deem necessary in the circumstances. The estate of a
deceased accountholder and a departing accountholder by
assignment or divorce shall remain liable, jointly and severally,
with the remaining or surviving accountholder(s), for any
obligations of the account arising before MLPF&S receives such
notice, or incurred in liquidation of the account or the
adjustment of the interests of the accountholders.
In the event of any such change in ownership of the account,
MLPF&S is authorized to divide or retitle the account in
accordance with the form of legal ownership of the account as
reflected on the records of MLPF&S, or by written instructions of
the remaining or surviving accountholder(s), or by obtaining a
court order, as MLPF&S may reasonably determine is appropriate in
the circumstances. Unless agreed otherwise among the account
holders in a writing provided to MLPF&S, joint accounts designed
"with right of survivorship" (e.g., JTWROS) shall vest the
interest of a deceased accountholder in the surviving
accountholder(s) and accounts designated "without right of
survivorship" (e.g., TIC) shall entitle the estate of a deceased
accountholder and the surviving accountholder(s) to equal shares
of the account. All accountholders agree to indemnify MLPF&S
against any liability, loss or expense incurred from acting in
accordance with this Agreement in the event of a change in
ownership of the account.
All statements, notices or other communications sent or given to
one accountholder by MLPF&S shall be considered notice to all
accountholders. In the event MLPF&S receives inconsistent
instructions from two or more accountholders, reasonably believes
instructions received from one accountholder are not mutually
agreeable to all accountholders, or receives a court order with
respect to the account, MLPF&S may, but is not obligated to,
restrict activities in the account, require that all instructions
be in writing signed by all accountholders, suspend or terminate
the CMA Service and/or file an interpleader action in an
appropriate court at the expense of the accountholders.
TERMINATION OF THE CMA SERVICE
8. The Banks, you or I may terminate my subscription to the CMA
Service, including the use of my Checks or Cards, if applicable,
at any time. I shall remain responsible for authorized charges
which arise before or after termination.
If my subscription is terminated, you may redeem all my Money
Fund shares and, unless I advise you otherwise, withdraw all my
Money Account deposit balances. Also, I shall promptly return
all unused Checks and any Cards to you or the Banks. My failure
to do so may result in a delay in your complying with my
instructions regarding the disposition of my assets with you.
CREDIT INFORMATION
9. I authorize you, each of your affiliates, and the Banks, to
request a consumer report about me from one or more consumer
reporting agencies for the purposes of considering my
subscription to the CMA Service, reviewing or collecting any
account opened for me, or for any other legitimate business
purpose. Upon my request, you will inform me of the name and
address of each consumer reporting agency from which you obtained
a consumer report, if any, in connection with my subscription or
accounts. I also authorize you, each of your affiliates, and the
Banks to share any information you may have or obtain about me
for any legitimate business purpose.
AGREEMENT TO ARBITRATE CONTROVERSIES WITH MLPF&S
10. - 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.
I agree that all controversies which may arise between us,
including but not limited to those involving 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 before the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., or an arbitration facility
provided by any other exchange, the National Association of
Securities Dealers, Inc., or the Municipal Securities Rulemaking
Board, and in accordance with its arbitration rules then in
force. I may elect in the first instance whether arbitration
shall be conducted before the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., other exchanges, the National
Association of Securities Dealers, Inc., or the Municipal
Securities Rulemaking Board, but if I fail to make such election,
by registered letter or telegram addressed to you at the office
where I maintain my account, before the expiration of five days
after receipt of a written request from you to make such
election, then you may make such election. Judgment upon the
award of the arbitrators may be entered in any court, state or
federal, 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 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 to the
extent stated herein.
APPLICABLE LAWS
11. This Agreement, with respect to all portions of the CMA
Service, including interest charges on loans you may make to me,
will be governed by and interpreted under the laws of the State
of New York. The terms of my agreement with MLB&T are governed by
the federal and New Jersey law. The terms of my agreement with
MLNF are governed by federal and Utah law. The terms of my
agreement with CHASE, including those relating to finance charges
on overdrafts, are governed by federal and New York law. The
terms of my agreement with BANKONE are governed by Ohio law.
PRESUMPTION OF RECEIPT OF COMMUNICATIONS
12. Communications may be sent to me at my address or at such
other address as I give you in writing. All communications so
sent, whether by mail, telegraph, messenger or otherwise, will be
considered to have been given to me personally upon such sending,
whether or not I actually receive them.
EXTRAORDINARY EVENTS
13. I agree that you and the Banks shall not be liable for loss
caused directly or indirectly by government restrictions,
exchange or market rulings, suspension of trading, war, strikes
or other conditions beyond your and the Banks control.
SEPARABILITY
14. If any provision of this Agreement is held to be invalid,
illegal, void or unenforceable , by reason of any law, rule,
administrative order or judicial decision, such determination
will not affect the validity of the remaining provisions of this
Agreement.
LIABILITY FOR COSTS OF COLLECTION
15. To the extent permitted by the laws of the State of New York,
I agree to pay you the reasonable costs and expenses of
collection including attorney's fees, for any debit balance and
any unpaid deficiency, that I owe.
APPLICABLE RULES AND REGULATIONS
16. All transactions in my Securities Account shall be subject to
the constitution, rules, regulations, customs and usages of the
exchange or market and its clearing house, if any, on which such
transactions are executed by you or your agents, including your
subsidiaries and affiliates.
Paragraphs 17 though 25 below apply only if I request that my
Securities Account be established with the Investor Credit line
Service.
COLLATERAL REQUIREMENTS AND CREDIT CHARGES
17. I will maintain such securities and other property in my
accounts as you shall require from time to time. In accordance
with your usual custom, the monthly debit balance of such
accounts shall be charged interest at a rate permitted by the
laws of the State of New York. Unless I pay the interest
charged to my Securities Account at the close of a charge period,
it will be added to the opening balance for the next charge
period. Interest will the be charged upon the entire opening
balance of that next charge period which will, therefore include
any such unpaid interest from the previous charge period.
CALLS FOR ADDITIONAL COLLATERAL-LIQUIDATION RIGHTS
18. a. You should have the right require additional Collateral:
(1) in accordance with your general policies regarding your
maintenance requirements for the Investor CreditLine service, as
such may be modified amended or supplemented from time to time;
or
(2) if in your discretion you consider it necessary for your
protection at an earlier or later point in time than called for
by said general policies; or
(3) in the event that a petition in bankruptcy or for
appointment of a receiver is filed by or against me; or
(4) if an attachment is levied against my accounts; or
(5) in the event of my death.
b. If I do not provide you with additional collateral as you
may require in accordance with (a)(1) or (2), or should an event
described in (a) (3), (4) or (5) occur ( whether or not you elect
to require additional collateral), you shall have the right:
(1) to sell any or all securities and other property in my
accounts with you or with any of your affiliates, whether carried
individually or jointly with others;
(2) to buy any or all securities and other property which may
be short in such accounts; and
(3) to cancel any open orders and to close any or all
outstanding contracts.
You may exercise any or all of your rights under (b)(1), (2) and
(3) without further demand for additional collateral, or notice
of sale or purchase, or other notice or advertisement. Any such
sales or purchases may be made at your discretion on any exchange
or other market where such business is usually transacted, or at
public auction or private sale, and you may be the purchaser of
your own account. I understand that your giving of 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 any such demand, call or notice as provided
in this Agreement.
PURPOSE OF CREDIT
19. I understand and agree that any credit extended by you to me
in connection with my Securities Account is primarily for
investment or business purposes
REPRESENTATIONS AS TO BENEFICIAL OWNERSHIP AND CONTROL
20. I represent that, with respect to securities against which
credit is or may be extended by you: (a) I am not the beneficial
owner of more than three percent (3%) of the number of
outstanding shares of any class equity securities, and (b) I do
not control, am not controlled by and am not under common control
with the issuer of any such securities. In the event that any of
the foregoing representatives is inaccurate or becomes inaccurate
I will promptly so advise you in writing.
SECURITY INTEREST IN FAVOR OF MLPF&S
21. All securities and other property shall be subject to a lien
for the discharge of all my indebtedness and any other
obligations that I may owe to you, and are to be held by you as
security for the payment of any such obligations or indebtedness
to you in any account you maintain for me, including any accounts
in which I may have an interest. You shall have the right to
transfer securities and other property so held by you from or to
any other of such accounts whenever in your judgment you consider
such a transfer necessary for your protection. In enforcing your
lien, you shall have the discretion to determine which securities
and property are to be sold and which contracts are to be closed.
PAYMENT OF INDEBTEDNESS UPON DEMAND
22. I shall at all times be liable for the payment upon demand
of any debit balance or other obligations owing in any of my
accounts with you. I shall be liable to you for any deficiency
remaining in any such accounts in the event of the liquidation
thereof, in whole or in part, by you or by me. I will pay such
obligations and indebtedness upon demand.
PLEDGE OF SECURITIES AND OTHER PROPERTY
23. Within the limitations imposed by applicable laws, rules and
regulations, all securities and other property may be pledged and
repledged by you from time to time, without notice to me, either
separately or in common with other such securities and other
property, for any amount due in my accounts, of for any greater
amount. You may do so without retaining in your possession or
under your control for delivery a like amount of similar
securities or other property.
LENDING AGREEMENT
24. In return for your extension or maintenance of any credit in
my account, I acknowledge and agree that the securities in my
account together with all attended rights of ownership, may be
lent to you or lent out to others to the extent not prohibited by
applicable laws, rules and regulations. In connection with such
securities loans, you may receive and retain certain benefits to
which I will not be entitled. I understand that, in certain
circumstances such loans could limit my ability to exercise
voting rights, in whole or part, with respect to the securities
lent.
REPRESENTATION AS TO CAPACITY TO ENTER INTO AGREEMENT
25. I represent that no one except the person(s) signing this
Agreement has an interest in my account or accounts with you. If
a natural person, I represent that I am of full age, am not an
employee of any exchange, nor of any corporation of which any
exchange owns a majority of the capital stock, nor of a member of
any exchange, nor of a member firm or member corporation
registered on any exchange nor of a bank, trust company,
insurance company or any corporation, firm or individual engaged
in the business of dealing either as broker or as principal in
securities, bills of exchange, acceptances or other forms of
commercial paper. If any of the foregoing representations is
inaccurate or becomes inaccurate, I will promptly so advise you
in writing.
Paragraphs 26 through 34 below do not apply to CMA SubAccounts.
Paragraphs 26 through 31 below apply only when the Card/Check
Account is used, including when Checks and/or Cards are obtained.
CARD OWNERSHIP
26. I certify that all information I have provided in the CMA
Application and Agreement, including in the CMA Check and Visa
information form, is true and correct and that you and the Banks
may rely on and verify such information.
The card remains the property of the issuer and may be canceled
by the issuer at any time without prior notice.
LIABILITY
27. I will be liable for all authorized transactions arising
through the use of the Card(s) and checks in connection with my
Card/Check Account. I will be responsible, on a continuing
basis, for the safekeeping of my Card(s) and Checks and shall not
permit unauthorized persons to have access to my Card(s) or
Checks. I will also be responsible for reviewing my CMA Monthly
Statement in order to discover and report to MLPF&S the possible
unauthorized use of my Card(s) or Checks. I agree to notify
MLPF&S immediately if I believe or have reason to believe that my
Card(s) or Checks have been or may be used by an unauthorized
person. Unless limited by law, I will be responsible for any and
all losses and damages that arise from any breach of my
undertakings to safeguard my Card(s) and Checks, to review my CMA
Monthly statement for possible unauthorized activity and to
promptly report such to MLPF&S.
I also agree to pay the reasonable costs and expenses of
collection of any unpaid balance due, including any accrued
finance charges, as a result of any overdraft(s), including but
not limited to attorneys fees, to the extent allowed by law,
involved in such collection. I understand that the banks have
not taken a security interest in any of the assets in my
Securities Account or Money Accounts pursuant to this Agreement.
PURCHASING POWER
28. I agree that I will not incur charges to my Card/Check
account in excess of my Purchasing Power. The Purchasing Power
for my Card/Check Account will be the total of any available free
credit balance in my Securities Account, the available balances
in my Money Accounts, and, if applicable, the available loan
value of my securities in my Securities Account. I understand
that my Purchasing Power my fluctuate from day to day.
TRANSACTIONS EXCEEDING PURCHASING POWER
29. I understand that I will be in default if I incur charges in
my Card/Check Account that exceed my Purchasing Power. If I am
in default, you may, among other things terminate my subscription
to the CMA Service. If I exceed my Purchasing Power, Chase may
accept the transaction amount exceeding my Purchasing Power and
an overdraft, and advance funds to you or the Banks in the amount
exceeding my Purchasing Power. If CHASE does so, I will be
notified and agree that I will immediately pay CHASE the amount
of the overdraft and any applicable finance charge which is
computed as described in this section.
In each overdraft statement cycle, finance charges are figured by
applying a Daily Periodic Rate to the Average Daily Balance of
overdrafts and multiplying the resulting figure by the number of
days in that statement cycle. The Average Daily Balance of
overdrafts is calculated each day by starting with the beginning
balance of amounts I owe, adding any new overdrafts and
subtracting any payments or credits received that day and unpaid
finance charges. This gives CHASE the daily balance of
overdrafts. The Average Daily Balance is calculated by adding
all of the daily balances of overdrafts in that statement cycle
and dividing the total by the number of days in the overdraft
statement cycle. The Daily Periodic Rate that is applied is
disclosed in the Cash Management Account Program Description and
is Subject to change upon notice. Finance charges accrue from
the date CHASE accepts an overdraft until the day payment is
made.
Any payments that I make will be applied, as of the day of
receipt by CHASE, first to any accrued and unpaid finance charges
and then to the balance of overdrafts in the order in which the
were incurred.
OVERDRAFT NOTICES
30. If CHASE extends an overdraft to me, I will be notified in
writing. The initial overdraft notice will inform me of the
overdraft(s), which is due and payable by me immediately,
together with any accrued finance charges Subsequent overdraft
notices from CHASE will detail, among other disclosures, any
overdraft(s) plus finance charges imposed on such overdraft(s),
payments and credits and the balance due.
ACCOUNT INJURIES
31. I understand that inquires and error allegations concerning
my Card/Check Account, any overdraft notices and my monthly
statement should be directed through MLPF&S.
Paragraphs 32 through 34 below apply only if I subscribe to the
CMA Visa Gold Program
AGREEMENT TO THE CMA VISA GOLD PROGRAM
32. In addition to the following paragraphs, I understand that
paragraphs 1 through 16, 26 through 31 and, if my account is
established with the investor CreditLine service, 17 through 25
also apply to the CMA Visa Gold Program.
In the event I am applying for the CMA Visa Gold Program but I am
not approved for the participation in that program, I apply for
and authorize the issuance of one more Classic Visa cards and
checks for use with my CMA account. In addition, if upon
expiration of the Visa Gold Program Card(s) issued to me, I do
not qualify for reissue of such Card(s), I apply for and
authorize the issuance of Classic Visa Card(s) and checks. If a
Classic Visa Card(s) and Checks are issued to me, I understand
that this Agreement, with the exception of paragraphs 32 through
34 remain in full force and effect.
LIMITATIONS AND DIRECT DEBITING OF MY ACCOUNT
33. I agree to pay MLNF for the Card purchases posted to my
Card/Check Account. I authorize MLPF&S to pay MLNF from the
assets in my Money Accounts ( including by redeeming Money Fraud
shares or withdrawing ISA account balances, if any), and/or from
my Securities Account (including, if applicable, by making loans
to me). On my behalf, MLPF&S will pay MLNF, pursuant to the
terms of this Agreement and the Documents, on the fourth
Wednesday of each month for all Card purchases posted to my
Card/Check Account for that monthly period. However, if MLNF has
not received and accepted my signed Statement of Purpose form
(Federal Reserved Form FR U-1), I understand that the entire
amount of the charges posted to my Card/Check account will be
debited from my account once the sum of my Visa card purchases
exceeds $100,000 in any monthly cycle. In addition, any
subsequent charges not exceeding $100,000 posted to my Card/Check
account during the same monthly cycle will be paid by direct
debit to my account on the fourth Wednesday of the month. I
acknowledge that I have the right under applicable federal law to
receive advance notice to the varying amounts of the debit
described above but waive my right to do so, as long as the
amount does not exceed five hundred thousand dollars. If I
choose, I may elect to have this payment made by another means
which is not otherwise incompatible with MLPF&S' operations. If
I choose to have this payment made by such other means I will
notify MLPF&S in writing of my desire to do so.
AGREEMENT NOT TO DISPOSE OF ASSETS
34. By subscribing to the CMA Visa Gold Program I agree that I
will not dispose of my assets in my CMA Service account or any
other account I may have with wither MLPF&S or MLNF, if such
disposal will negatively affect my ability to pay MLNF for Card
transactions. However, I may continue to trade securities in my
Securities Account.
